Tax Planning
Effective tax planning can massively impact the amount of money left in your pocket at the end of the year, so, along with your other advisors, we work to be more tax efficient and ensure you don't pay more tax than you need to.
With clients living and working in many countries, each subject to different tax rules and regulations, the Somerset Asset Management approach supports personalized, comprehensive tax strategies specific to your circumstances.
Somerset Asset Management's role in tax planning focuses on four key areas that support your overall tax strategy, as determined by your tax specialist:
Evidence-Based Investment Strategies
Evidence shows that traditional, high-turnover investing is often tax-inefficient and can reduce after-tax returns. Somerset Asset Management's investment philosophy embraces evidence-based, low-turnover portfolio management to be as tax-efficient as possible, and by liaising with your tax advisor, we ensure our approach aligns with their strategy.
Tax-Efficient Investments
By incorporating investments that are characteristically tax-efficient, we help you keep hold of more of your earnings. When capital gains occur, we structure portfolios to favor long-term gains where possible, allowing clients to benefit from more advantageous tax treatment as determined by their local regulations and tax advisors.
Tax Loss Harvesting
During the year, we work to utilize tax-loss harvesting opportunities within the portfolio by coordinating with your tax advisor. Realized losses can be used to offset gains, minimizing your taxable income. Your advisor can integrate these portfolio insights with other aspects of your financial landscape, such as real estate transactions, to enhance overall tax efficiency.
Asset Location Strategy
We offer guidance on how to align investments across account types (after-tax, tax-deferred, and tax-free) for optimal tax treatment. We coordinate with your tax advisor to devise a customized asset location strategy that fits within your country's tax structure, ensuring that each portfolio component is as tax-advantaged as possible.
While Somerset Asset Management focuses on maximizing growth over tax efficiency, your tax advisor will offer specialized guidance on country-specific tax regulations and other tax-related strategies that may be incorporated into portfolio management where it is deemed beneficial.