Share transfers up 35% due to growing tax burden

Increasing tax burdens are driving demand for share transfers, reports one of the world’s largest independent financial advisory organisations.

deVere Group, which has more than $12 billion under advisement, has revealed a 35% year-on-year surge in client enquiries regarding the transfer of shares into investment vehicles such as personal portfolio bonds over the last 12 months.

Share transfers refer to the strategic movement or repositioning of shares in a portfolio. 

Of the jump of more than a third in enquiries, deVere Group CEO Nigel Green comments: “With governments worldwide grappling with economic challenges and seeking to shore up revenues, the tax burden for individuals is inevitably increasing.

“Against this backdrop, investors are increasingly recognising the importance of tax-efficient strategies, and share transfers have emerged as a key tool to navigate the growing tax liabilities.”

He continues: “We’re witnessing a growing awareness about the importance of tax efficiency to grow and protect wealth. 

“Share transfers typically represent a powerful strategy to navigate the tax landscape while optimising investment portfolios for long-term success.

“Unlike selling shares, which can result in immediate capital gains or losses, transferring shares to another person or entity may not incur taxes at the time of the transfer. Instead, tax consequences may be deferred until a subsequent sale by the transferee.

“By not triggering immediate taxation, investors may have the flexibility to manage their tax liabilities in a way that aligns with their overall financial and tax planning strategies.

In addition, gift and inheritance tax laws usually provide exemptions or reduced rates for such transfers, allowing individuals to pass on assets to family members or heirs with potentially lower tax implications than a sale.”

deVere says that transferring shares into an investment vehicle such as a personal portfolio bond (PPB), which is ideal for most nationalities, has significant tax advantages.

A portfolio bond is an international tax-efficient insurance vehicle designed for lump sum investment. Essentially, it is arranged to carry any asset, such as funds, bonds, equities, and cash, and it allows you to centralise your portfolio to avoid administrative headaches that come from a complex investment portfolio.

Nigel Green notes: “Personal portfolio bonds are proving extremely attractive not only due to the tax efficiency aspect. 

“With a PPB, less time is spent on tedious, time-consuming administration. There’s enhanced personal and asset privacy and security and flexibility, which allows access to income and capital at any time.”

He concludes: “As governments continue to find more ways to boost tax revenues, often through stealth measures, we expect the growing trend for share transfers to increase as more people will seek ways to mitigate the burden and preserve their capital.”

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