Capital gain taxes are something that a person who has huge exposure to bonds and equity needs to look after and consider, as well as the tax savings options that can reduce the capital gain taxes.
Proper guidance and support are essential for those who can help the HNIs to save on those taxes. A personal tax lawyer can help to optimize those liabilities, and through that, they can easily manage the funds of high-net-worth individuals and keep that in the asset-making process, which will grow their wealth.
In this blog, we will deal with how HNIs deal with capital gain taxes and what you can learn from their playbook.
Who are the HNIs (High Net Worth Individuals)?
HNIs are individuals who are considered to have liquid assets of more than USD 1 million, and that is determined through the amount in the bank accounts, stocks, or bonds.
However, real estate assets such as residence properties and other collectibles are excluded. Thus, these individuals need tax savings options to protect their revenue from the equity and bonds.
The Tax Planning Considerations
Here are certain tax planning considerations an HNI can choose to go through when they want to protecttheir capital gain tax, and through that, they can invest that extra amount into further asset classes. Here are a few steps one can take to ensure that one can legally save capital gain taxes.
Step 1: Reducing the Liabilities
One of the main aspects of paying less in CGTs is to reduce tax liabilities. Here, a tax representative can consult with the family of the HNI and ask them to invest the dividend amount into something new asset class that will help to grow the assets further.
One can contribute to the 401(k)s and the IRAs, and through that, one can generate a savings fund, which is tax deductible. The main goal here is to keep the fund in some other savings or asset class so that it doesn’t turn into a realized gain.
Step 2: Engage in Estate Planning
The next process is estate planning, and one can do that to cut down on tax obligations. It’s a great tool that has been used by the HNIs, where they can plan to pass the residence or other estate to their heirs and also save tax on that by buying life insurance that will cover the taxes of that estate.
In this entire process, one can get help from the California sales tax attorney or from another tax lawyer at different places who can arrange all the legal documents and complete the process efficiently.
Step 3: Boosting Investment Returns
One of the most efficient and relevant wealth to grow wealth is through real estate. Here, a person is liable to get under the capital gain taxes, and through this asset, one can park their wealth for a long time, and through that, one can also have good properties which can be later transferred to the heirs in the form of an estate.
It is a great way for the HNIs to invest in this way, which is completely legal and helps a person to get away with paying less taxes.