Why Liquidity Planning Matters More Than Tax Rates in Estate Strategy

Why Liquidity Planning Matters More Than Tax Rates in Estate Strategy

Tax rates attract attention. Liquidity determines outcomes.

For many business owners and property investors, estates are asset-rich but cash-poor. Value may sit in property portfolios, trading companies or long-term investments. Yet when Inheritance Tax becomes payable, it is due in cash.

This is where liquidity risk emerges.

The Hidden Pressure Point

Inheritance Tax is often calculated on total asset value, not on accessible funds. If sufficient liquidity has not been planned for, families may face difficult choices:

  • Forced property sales

  • Business share disposal

  • Borrowing under pressure

  • Strained family discussions

None of these outcomes are optimal.

Planning for Cash, Not Just Reliefs

Tax reliefs are important, but liquidity planning sits alongside them. Sensible strategies may include:

  • Structured life assurance

  • Gradual capital rebalancing

  • Business continuity planning

  • Clear review of estate composition

Planning for Cash, Not Just Reliefs

Tax reliefs are important, but liquidity planning sits alongside them. Sensible strategies may include:

  • Structured life assurance

  • Gradual capital rebalancing

  • Business continuity planning

  • Clear review of estate composition

The objective is not simply to reduce tax — it is to ensure obligations can be met without destabilising assets.

Stability Over Surprise

When liquidity is addressed early, families retain control. When it is ignored, urgency replaces strategy.

Estate planning works best when it protects both value and flexibility.

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“Having seen John of Legacy Wills present at a property event, it was clear he had both the breadth of knowledge and experience and also the ability to make a very dry subject both understandable and engaging. That’s a tough call when talking about Wills, Trusts and death. John produced Wills and POA’s for myself and my wife in a timely, effective and reasonable manner. I have subsequently recommended him to numerous colleagues and friends to cut out the jargon and challenges surrounding this critical protection, which is too often deferred or neglected.”

Dan Norman