Following the recent market downturn, investors are questioning when stability might return,
whether a recession is imminent, and if a shift towards pro-growth policies could occur. While
the future remains unpredictable, assessing both downside and upside market scenarios can
help frame investment decisions.

Broadly, there are four key market trajectories—equities moving higher or lower, combined
with rising or falling bond yields. Below are potential scenarios, that helping investors
evaluate how their portfolios may be impacted:

- [object Object]  An escalating trade war dampens
business and consumer sentiment, leading to weaker growth and shrinking profit
margins due to rising costs. Some of these costs are likely to be passed on to
consumers, fuelling inflation. Consequently, equities could decline, while bond yields
rise at the same time as inflation edges higher. Safe haven buying and higher rates
should push the US dollar higher.
- [object Object]  The US successfully negotiates trade
agreements with key partners, removing uncertainty. This boosts growth and
encourages stock buybacks, M&A activity, and capital investment. Stocks should rally
even as the US dollar weakens. The reduction in tariff-driven inflationary pressures
should allow the Federal Reserve to resume its cutting cycle. Bond yields will decline
in such a scenario.
- [object Object]  A large-scale tax cut is enacted, fuelling
consumer spending, economic growth, and corporate earnings. This benefits smallcap and domestically focused large-cap stocks. However, the increased fiscal deficit
pushes bond yields higher. Despite ongoing trade tensions, international stocks
remain relatively resilient but are constrained by a stronger dollar and slowing global
growth.
- [object Object]  The dominance of US technology firms in
AI faces challenges from emerging competitors and technological shifts. The risk is that
heavy capital expenditures fail to translate into expected returns, leading to profit
disappointments and a market correction. While tech stocks struggle, international
and value stocks prove more resilient. Investors seek safety, driving bond yields lower.

Since the start of the year, elements of each of these scenarios have surfaced, contributing to
market volatility and unexpected trends. Previously overlooked asset classes—such as longduration bonds, value stocks, and stocks outside of the US —have demonstrated resilience
and outperformance. 

# Policy uncertainty has reached its highest levels since the
pandemic

*US Economic Policy Uncertainty Index*

![image](/coverage/c71.webp)

Given the sell-off in stocks and the decline in US real rates, it seems that investors have
interpreted tariff news as growth-negative, which will keep equity market volatility high in the
near future. The effect on economic growth will mostly depend on the type of medium-term
tax cut plan that is approved and how long and high tariffs are maintained. 

Our major takeaway is still to continue investing in stocks, albeit sparingly. Trade policy
changes and tariff uncertainty underscore the significance of risk management and portfolio
diversification. Techniques for capital preservation can help reduce stock market volatility. We
continue to favour high-quality fixed income, such as investment-grade corporate bonds,
because they can serve as a buffer against trade concerns. A well-diversified multi-asset
portfolio should include alternative investments, such as gold if cash rates continue to decline
due to looser monetary policy.

# Disclaimer

This document has been produced solely for information purposes by Wealthfusion Limited with the greatest of
care and to the best of its knowledge and belief for use by its legal entities. The information contained herein
constitutes a marketing communication and should not be construed as financial research or analysis, an offer, a
public offer, investment advice, a recommendation or solicitation to buy, sell or subscribe to financial instruments
and/or to the provision of a financial service. Further, this document is not intended to provide any financial,
legal, accounting or tax advice and should not be relied upon in this regard. The information provided herein is
for the exclusive use of the recipient and may not be reproduced, disclosed or distributed, neither in part nor in
full. This document is not directed at, or intended for distribution to or use by, any person or entity domiciled or
resident in any jurisdiction where such distribution, publication, availability or use would be contrary to
applicable laws or regulations of such jurisdictions. Any investment decision must be based on a prior study of
the offering documentation and in particular the terms and conditions and key information documents. This
information can be obtained on request and will be free of charge from your relationship manager. The content
of this document is intended only for persons who understand and are capable of assuming all risks involved.
This document has been prepared without taking into account the investor classification, specific investment
objectives, financial situation, tax situation or the needs of the recipient. Products and services are not suitable
for all investors and may not be available to investors residing in certain jurisdictions or with certain nationalities.
Before entering into any transaction, the recipient should consider the suitability of the transaction to individual
circumstances and objectives. Wealthfusion Limited recommends that investors independently assess, with a
professional financial advisor, the specific financial risks as well as the legal, regulatory, credit, tax and accounting
consequences. Investment products may be subject to investment risks involving, but not limited to, possible
loss of all or part of the principal investment. This document is not intended to be exhaustive on all risks related
to financial instruments. Therefore, the recipient should consult the specific product documentation and discuss
any queries with their relationship manager prior to entering into an investment decision. The information and
views expressed at the time of writing are subject to change at any time without notice and there is no obligation
to update or remove outdated information. Historical data on the performance of the securities and financial
instruments or the underlying assets in this document is no indication for future performance and the value of
investments may fall as well as rise. This document is based on publicly available information and data. Although
information in this document has been obtained from sources believed to be reliable, Wealthfusion Limited
provides no guarantee with regard to the timeliness, accuracy or completeness of the information and does not
accept any liability for any loss and/or damage, either directly or indirectly, arising out of or in connection with
the use of all or part of this information or from the omission of certain information. Recipients should be aware
that the terms and conditions and key information documents constitute the sole binding basis for the purchase
of investment funds. Some investments may foresee restrictions to target group of investors.

Market At Crossroads Scenarios That Could Shape the Next Big Move

*A family’s bitter court battle over their £85 million estate raises complex
inheritance disputes and governance challenges*

![image](/coverage/c171.webp)

*The family's ancestral seat, Ragley Hall in Warwickshire / Image: Shutterstock*

# Trust Lessons from the Earl of Yarmouth’s Estate Dispute

A recent high-profile legal battle within the Seymour family has highlighted key lessons on trust
governance and inheritance planning. The dispute over an £85 million estate serves as a
cautionary tale for wealthy families managing intergenerational wealth.


**Background of the Dispute** William Seymour, the Earl of Yarmouth, has taken legal action
against his parents, the Marquess and Marchioness of Hertford, over the inheritance of the
family’s ancestral estate, Ragley Hall. This historic estate, spanning farmland, woodlands, and
multiple properties, has been passed down through generations. William expected to inherit
the estate at 30 but claims his parents have withheld it unfairly.

**Family Conflicts and Legal Claims** The dispute appears to stem from long-standing tensions,
particularly after William married Kelsey Wells, a former Goldman Sachs banker. His father
claims that their relationship deteriorated sharply before the marriage, and the court heard
that William sent inflammatory emails questioning his father’s mental capacity. These
communications have contributed to the legal complexities of the case.

Adding to the tensions, William and his wife allege that estate trustees refused to release funds
for their children's private school fees and that they were evicted from their property on the
6,000-acre estate with little notice. They are now challenging the structure of the family trusts
and seeking to replace the trustees, accusing them of aligning with their parents rather than
acting impartially.


**Role of Trustees and Governance Challenges ** The case underscores the critical role trustees
play in balancing the interests of beneficiaries while adhering to the original intentions of the
trust. Trustees must manage assets responsibly, ensure fair distribution, and navigate conflicts
without favouritism. However, disputes arise when beneficiaries feel excluded or believe
trustees are exercising excessive control.

Legal experts emphasise that trustees must uphold their fiduciary duties, invest assets
prudently, and act in the best interests of all beneficiaries. If beneficiaries believe trustees have
acted improperly, they may pursue legal claims, including seeking trustee removal.


**Lessons for Wealth Planning and Succession Management ** This case highlights key
considerations for wealthy families in trust and estate planning:

- [object Object]  – Establishing well-documented succession plans helps
minimise disputes and ensures expectations are aligned across generations.
- [object Object] – Open dialogue between family members and trustees can
prevent misunderstandings and resolve concerns before they escalate.
- [object Object]  – Appointing neutral, professional trustees or ensuring
fair governance structures can help maintain objectivity and reduce conflicts.
- [object Object] – Legal battles can be costly and damaging. Mediation
and private discussions should be the first course of action before resorting to litigation.

**Navigating Family Wealth Disputes ** While most family trust disputes are resolved privately to
preserve confidentiality and avoid prolonged legal costs, some cases escalate when
relationships break down irreparably. In such situations, courts may intervene to address
breaches of trust or appoint new trustees.

The judgment in the Seymour family case remains pending, and it will serve as an important
precedent for similar estate disputes. This case reinforces the need for well-structured
governance, proactive planning, and open family discussions to avoid costly and public legal
battles. For families managing significant wealth, ensuring clear legal structures and fostering
strong relationships between trustees and beneficiaries is essential to preserving financial
legacies across generations.

The Trust Lessons from the Earl of Yarmouth's £85 Million Estate Row

# Businessman Steve Perez is paying a high price to ensure
his company survives once he’s no longer around.

The 68-year-old owner of a drinks and hotel chain in
northern England is readying to hand over the princely
sum of £100,000($130,000) a year for life insurance
that will cover the estimated £10 million inheritance
tax his heirs will need to pay on the business if he dies
within the next decade.

The payments, which he’ll finance by taking
dividends from his company, will cover a tax bill that
he says his firm would otherwise struggle to pay. And
he’s not alone.

“It’s about protecting the business going forward and
to some extent my own legacy of what I’ve built up,”
he said.

Across the UK, entrepreneurs and more affluent
Britons are grappling with changes to inheritance tax
that are upending traditional strategies for transferring
family wealth. The ability to pass on pensions and
businesses mostly tax free will soon be gone,leaving
the prospect of tax at as much as 40% and the
unappetizing possibility of forced asset sales or the
breakup of a business to cover the potential costs.


“Suddenly [people are] looking at a large inheritance
tax bill when they weren’t planning to look at an
inheritance tax bill at all,” said Clare Munro, a senior
tax adviser at Weatherbys Private Bank in London.

# “People are sort of thinking, ‘Well,
actually, I may not totally trust my
relatives but I dislike the government
rather more.”

Major changes by the Labour government include
new levies on businesses, pensions and farmlands
and the freezing of thresholds at which inheritance tax kicks in as part of plans to strengthen the
country’s finances. From April next year farms and
businesses will be taxed at 20% above £1 million. A
year later, pensions will also be included in a person’s
estate and taxed accordingly.

The government is also keeping the rate on which no
inheritance tax is due at £325,000 until 2030. After
that amount, the levy is 40%. That means that
inflation and rising property values are likely to bring
more estates into the tax net.


Right now, only about 4% of the UK population is
liable for inheritance tax, which in 2024 raised about
£7.5 billion. But there’s few more emotive topics in
personal finance — or more disliked taxes. Pension
changes especially have irked older Britons who say
they’ve saved for decades only to see their plans for
passing on their assets overturned. The government
and those in favor of the reforms say there’s no good
reason why pensions should even have been used as
a wealth-planning strategy in the first place.

Small business owners are confronted with a range of
challenges, ranging from the shareholder structures
when it comes to inheritance and, in some cases, how
to value the company to prepare for the day when the
tax becomes due.

The uncertainty is proving a boon for financial
advisers and wealth managers. They’re reporting a
surge in interest from those looking to understand the
changes and explore options. But even they say it’s
going to hurt.

“I’m sitting there, hoping that the government
doesn’t go through with it. It’s put me in a really
difficult position.”


# “Right now, only about 4% of the UK population is liable for
inheritance tax, which in 2024 raised about £7.5 billion.”

“We’ve been incredibly busy,” said Helen Clarke, a
partner at full-service law firm Irwin Mitchell. She
said she’s seen an unprecedented amount of clients
calling with assets over £2 million.

The policy changes are expected to raise £2.3 billion
per year by 2029, according to government estimates,
though it’s unclear by how much that amount could
be reduced as people examine strategies.

Those range from simply drawing more on pensions,
which allow 25% to be taken tax-free as a one-off , to
establishing a trust to pass on assets to children, to
gifting property and even, as with hotel owner Perez,
to take on outsized life insurance policies to help
cover the cost of the tax.

Pensions are at the heart of the changes. One popular
strategy advisors are already seeing is people taking
more from them since they will soon form part of a
person’s estate.

“The best inheritance tax planning in the world is
enjoying what you’ve accumulated,” said Munro,
“Spend it, gift it, have a ball.” People taking more
money out of their pension pots are either gifting it to
family members, or spending it all now, she said. In
the UK, a gift is exempt provided it occurs at least
seven years before the person dies.

Jim Everard, a 64-year old Somerset-based retiree, is
taking the advice on spending to heart. He recently
doubled the amount of money he takes from his
pension and is splashing out on holidays and a new
car.


The former IT manager, who retired six years ago,
has taken long-haul trips in the past year to ski in
Japan and visit family in Australia. He has three more
similar vacations booked and plans to spend 15-to-20
weeks of the year abroad. He’s also eyeing up a
Polestar Volvo electric car to replace his BMW.

“As there’s no tax benefit, I just spend it for a good
time, basically mainly foreign holidays,” he said.

Besides exotic travels, some well-heeled Britons are
contemplating giving more of their wealth — and
earlier — to family, compared to when they hoped to
transfer it when they passed, Munro said.

“People are sort of thinking, ‘Well, actually, I may
not totally trust my relatives but I dislike the
government rather more.”

Lak Sidhu, a 59-year old finance director in
Maidenhead, Berkshire,is well on that path already. 

# “Pensions are at the
heart of the changes.”

He plans to give more away to his three children, all
in their twenties, and has already paid off their
student debt. He’s started putting cash into their
tax-efficient stock accounts and is also planning to
help them onto the property ladder.

“This budget has made us think a lot harder about
what we plan to do with our pension,” he said. “I’ll
probably start handing down my wealth to my
children sooner, making sure there’s enough in the
kitty for the wife and I.”

In the case of business owners, there are particular
problems for those with younger heirs. Hotel owner
Perez is considering gifting some of his assets to his
25-year-old son, but believes he’s too young to take
over the firm. “Perhaps in ten years’ time or so, he
might hopefully be in a position where he could run
the business.”

Individuals are also shifting their assets from pension
pots and businesses to trusts and some mid-size UK
company stocks exempt from tax, said Liviu Ratoi, a
financial adviser with wealth firm Flying Colours.

Still, the changes and general uncertainty underscore
the already challenging strategy of inheritance
planning given the difficulties of predicting life
expectancy, end-of-life healthcare costs and changes
to family dynamics, he said.

Some are instead taking more of a wait-and-see
approach in the hope that a future government could
reverse some of the new policies, Ratoi said.

# “The best inheritance tax
planning in the world is
enjoying what you’ve
accumulated, Spend it,
gift it, have a ball.”

![image](/coverage/c181.webp)

*“Individuals are also shifting their assets from pension
pots and businesses to trusts and some mid-size UK
company stocks exempt from tax”*

That’s the case for Michael Brundle, a
Rainham-based owner of a £80 million delivery
service business that goes back five generations. The
51-year-old reckons he’s looking at a £16 million tax
bill from his business on his death, something that
would effectively bankrupt the company — or force a
breakup.

He’s considering selling his firm, leaving the country,
putting assets in a trust or gifting it to his kids. But his
children are still teenagers and he’s not wild about the
other options either. 

“The last thing I want to do is leave some enormous
liability for my wife to work out,” he said, “But I’m
sitting there, hoping that the government doesn’t go
through with it. It’s put me in a really difficult
position.”

Wealthy Britons Embrace Creative Tactics to Beat Inheritance Tax

# Why the Continent Could
Outshine US Equities

# Can European Stocks Stay in
the Lead?

For investors, the Trump 2.0 administration's
roadmap hasn't gone as planned, with US stocks
cooling due to a sluggish economy, changing
economic policies, and increased AI competition
from China. The S&P 500 and Nasdaq indexes have
dropped by -3.20% YTD and -7.80% YTD,
respectively, since Trump's inauguration on January
20 due to the continued high level of political and
economic uncertainty. Since the beginning of the
year, consumer sentiment has also declined, and
domestic manufacturing appears to be losing some
of its pace. The Fed's hand is somewhat tied to
lowering rates in the near future because tariffinduced inflationary risks are still high. 

Until recently, the US was the only option for
investors. However, given the continued policy
uncertainty, investors should be on the lookout for
significant developments overseas, particularly in
countries with significant room for fiscal and
monetary expansions. In light of this, we think
Europe is appealing for a number of reasons.

# Why Europe Looks Appealing

Despite its modest growth, Europe's economy is doing
well overall. After a 0.1% increase in 2023, real GDP in
the eurozone was up 0.9% year over year and remained
steady quarter over quarter in the fourth quarter of 2024.

The labour market remains strong, with the eurozone
unemployment rate at 6.3% in December 2024, close to
an all-time low. Wages growth remains robust, at 4.4%
year-over-year in the third quarter of 2024.

Europe's inflation situation appears to be benign as well,
with annual consumer prices increasing by 2.4% in the
year ending in December 2024—much less than the US's
3.0% increase. The European Central Bank can maintain
more accommodating monetary policies as a result. The
ECB lowered its deposit rate this month from a peak of
4.0% in early 2024 to 2.50%. By the end of 2025,
investors anticipate that ECB benchmark rates will be
between 1.75 and 2 percent lower than the current CPI
inflation rate. Since the European business sector
depends more on bank funding than the US does, these
lower rates should contribute to its growth. A low-cost
euro might also help the economies of the Eurozone.

The region as a whole has fiscal room to spend. The
eurozone's gross government debt-to-GDP ratio is
estimated by the IMF to be 73.9%, down from 76.4% ten
years ago. This stands in contrast to the US, the UK and
Japan all of whom have seen a sharp increase in this
ratio over the past decade compared to eurozone. This
allows governments across Europe to boost economic
growth through fiscal spending in certain areas.

European countries have pledged to make significant
investments in strengthening NATO defence expenditure
pledges, while the United States is considering
withdrawing its support for the alliance. This could take
total defence spending from roughly 2% of gross
domestic product to 3.5% over the next several years.
Defence spending in the region might reach EUR 1
trillion, which would help the defence and aerospace
sectors as well as the overall economy.

Furthermore, the area will need to contribute and invest
in Ukraine's reconstruction. It is estimated that over $400
billion in additional engineering and construction work
could result from the restoration initiatives over the
course of the next ten years, according to some
estimates. Lastly, European consumers remain in a
healthy shape with household saving rates that are
nearly 4x times that in the US (4.1%).

# European Valuations and Market
Positioning

Tech companies are underrepresented in European
indexes, as a result, it has missed out on the surge in US
mega-cap tech businesses over the past year or so but has also
not suffered as much as the US in the last three months.

The strongest case, however, for European equities is its
cheap valuations. The MSCI Europe ex-UK had a forward
P/E ratio of 14.7 times at the end of January, compared to
21.8 times for the S&P500. Naturally, compositional
effects account for a portion of the valuation discount, as
highly valued technology stocks are far more heavily
weighted in the S&P 500 than in the MSCI Europe. Even
after considering this, the P/E ratios of the ten MSCI
Europe sectors are all far lower than those of the S&P 500.
Additionally, the region offers a larger dividend yield—
3.3% as opposed to 1.3% for the S&P 500.

# Implications for Investors

Europe has outperformed the US in terms of positive
economic surprises. The purchasing managers' indices
(PMIs) for the region and the increase in manufacturing
activity over the last three months have shown
improvement in hard data. There have been a lot of
favourable profit revisions in the region this year.
Additionally, return on equity (ROE), a measure of bank
profitability in Europe, is reaching all-time highs. Over the
last six months, European banks have performed better
than most major asset classes.

The fiscal and monetary policy environment also seems to
be favourable. A more aggressive fiscal strategy that
promotes economic growth and corporate profitability
could result from the possibility of significant political
change in major nations like the UK, France, and
Germany. All things considered; Europe clearly possesses
the collective capacity to accelerate its growth; it simply
needs to set out on the path.

The prospect of peace in Ukraine after three years of
violence strengthens the argument for long-term prosperity
in Europe. There is a hope that a resumption of natural gas
deliveries from Russia, potentially relieve inflationary
pressures on energy prices in several key industries
lowering inflation expectations, and helping rates decline
in the event of a ceasefire, as Russian supply returns more
freely to global markets.

Despite this, the European landscape has improved
significantly since the beginning of the conflict in Ukraine.
Recent developments from the White House and the
Munich Security Conference about the US's stance on
peace negotiations with Russia may be seen as a
multigenerational change in global allegiances. Material
uncertainty still exists since there is still much to be
decided and because US policy views appear to be
defined in real time. The possible US tariffs on European
goods entering US present an extra risk to European
exporters.


The economy of Europe continues to load slowly but
steadily. Gains in Europe could be a supplementary
source of returns for the portfolio, since the continent
continues to house prominent companies in the global
market with strong brands and solid balance sheets in
sectors including defence, engineering and consumers.

# Disclaimer

This document has been produced solely for information purposes by Wealthfusion Limited with the greatest of care and to the
best of its knowledge and belief for use by its legal entities. The information contained herein constitutes a marketing
communication and should not be construed as financial research or analysis, an offer, a public offer, investment advice, a
recommendation or solicitation to buy, sell or subscribe to financial instruments and/or to the provision of a financial service.
Further, this document is not intended to provide any financial, legal, accounting or tax advice and should not be relied upon in
this regard. The information provided herein is for the exclusive use of the recipient and may not be reproduced, disclosed or
distributed, neither in part nor in full. This document is not directed at, or intended for distribution to or use by, any person or
entity domiciled or resident in any jurisdiction where such distribution, publication, availability or use would be contrary to
applicable laws or regulations of such jurisdictions. Any investment decision must be based on a prior study of the offering
documentation and in particular the terms and conditions and key information documents. This information can be obtained on
request and will be free of charge from your relationship manager. The content of this document is intended only for persons who
understand and are capable of assuming all risks involved. This document has been prepared without taking into account the
investor classification, specific investment objectives, financial situation, tax situation or the needs of the recipient. Products and
services are not suitable for all investors and may not be available to investors residing in certain jurisdictions or with certain
nationalities. Before entering into any transaction, the recipient should consider the suitability of the transaction to individual
circumstances and objectives. Wealthfusion Limited recommends that investors independently assess, with a professional financial
advisor, the specific financial risks as well as the legal, regulatory, credit, tax and accounting consequences. Investment products
may be subject to investment risks involving, but not limited to, possible loss of all or part of the principal investment. This
document is not intended to be exhaustive on all risks related to financial instruments. Therefore, the recipient should consult the
specific product documentation and discuss any queries with their relationship manager prior to entering into an investment
decision. The information and views expressed at the time of writing are subject to change at any time without notice and there is
no obligation to update or remove outdated information. Historical data on the performance of the securities and financial
instruments or the underlying assets in this document is no indication for future performance and the value of investments may
fall as well as rise. This document is based on publicly available information and data. Although information in this document has
been obtained from sources believed to be reliable, Wealthfusion Limited provides no guarantee with regard to the timeliness,
accuracy or completeness of the information and does not accept any liability for any loss and/or damage, either directly or
indirectly, arising out of or in connection with the use of all or part of this information or from the omission of certain information.
Recipients should be aware that the terms and conditions and key information documents constitute the sole binding basis for the
purchase of investment funds. Some investments may foresee restrictions to target group of investors.

Europe's Quiet Comeback

# What was Announced?

President Trump has declared that import duties will be raised significantly. Beginning on April
5, all imports will be subject to a "baseline" tariff of at least 10%; starting on April 9, there will
be higher "reciprocal" rates for specific trade partners thought to have excessive tariff or nontariff barriers.

*Chart 1: Trump's Reciprocal Tariffs*

![image](/coverage/c91.webp)

*Source: Scotia, Bloomberg*

Chinese imports will be subject to 34% of the proposed tariffs (54% including already
announced tariffs), followed by Japan at 24%, and the European Union at 20%. The President
extended an invitation to engage in negotiations with trading partners.

China responded this morning by imposing a 34% tariff on all US imports. They also declared
additional restrictions on the export of rare earth materials. These tariffs will go into effect on
April 10. The European Union is also expected to retaliate with their own duties on US imports
and potentially on services as well.

# Market Reaction

The announcement has caused risk assets to respond negatively; since the tariff
announcement, global shares have dropped by more than 8%. Investors are more concerned
about growth threats than the inflationary effects of tariffs, bond yields moved lower. The US
10-yr Treasury yields were down below 4% for the first time in 6-months, while the two-year
yield stood at 3.58%. It's interesting that while the euro and sterling have strengthened, the
US dollar has weakened. Commodities have also taken a big hit with oil down as much as 13%.
Interestingly, gold has also corrected 1.8% since the announcement. 

Near term market direction will depend on how the US trading partners respond to these
tariffs. We anticipate more market volatility in the near future. 

The announced and already-implemented tariffs will jeopardise global growth. The probability
of a US recession has jumped to around 60% over the next 12-months. Economists’ estimate
the tariffs could hit global output by up to 1-1.5% over the next year.

# Opportunities in a Choppy Market

We observe the following opportunities in a difficult financial market situation, especially with
regard to risk assets:

As highlighted in the note we circulated last month,** European equities **are better placed
compared to their US counterparts. With several European countries announcing a bazooka
fiscal package, the backdrop for European earnings looks bright. Even before the most recent
10% fall, valuations were still reasonably low, and investor positioning was still light. An added
boost comes from a central bank that stands ready to cut interest rates. Of course, the impact
of tariffs could start to chip away at the region’s competitiveness, but above noted factors will
limit the drag.

Investors in the US should concentrate on quality companies with consistent & stable dividend
profiles, as these are typically found in lower beta sectors including** consumer staples and
telecom services.**

The US dollar has been the envy of the world over the last ten years and has historically
benefited from political unpredictability and foreign investor flows into US assets; currencies
like the Swiss franc and Japanese yen typically perform even better and are better prepared
for negative momentum. Curiously, after the tariff announcements, higher beta currencies like
the euro and pound both saw gains of up to 3%.

Other safe-haven assets that investors might think about holding are** US Treasuries and gold.**Gold is a good diversifier for multi-asset portfolios and has demonstrated that it can continue
to serve as a hedge against geopolitical risks. The demand from central banks and retail
investors should keep the price of yellow metal high in the near future, even though gold
prices have arguably reached new highs recently. We also favour US Treasuries as a good
diversifier to ongoing policy uncertainties and global slowdown. 

# Final Thoughts

Before everything calms down, there may be more twists and turns ahead, and visibility for
investors will be limited in the near term. We expect more investment opportunities to
emerge in the coming weeks and months. For the time being, investors should continue to
exercise discretion and refrain from bottom fishing. In rapidly shifting market conditions,
investors may benefit from constructing a portfolio that isn't overly dependent on any one
asset class or region.

# Disclaimer

This document has been produced solely for information purposes by Wealthfusion Limited with the greatest of
care and to the best of its knowledge and belief for use by its legal entities. The information contained herein
constitutes a marketing communication and should not be construed as financial research or analysis, an offer, a
public offer, investment advice, a recommendation or solicitation to buy, sell or subscribe to financial instruments
and/or to the provision of a financial service. Further, this document is not intended to provide any financial,
legal, accounting or tax advice and should not be relied upon in this regard. The information provided herein is
for the exclusive use of the recipient and may not be reproduced, disclosed or distributed, neither in part nor in
full. This document is not directed at, or intended for distribution to or use by, any person or entity domiciled or
resident in any jurisdiction where such distribution, publication, availability or use would be contrary to
applicable laws or regulations of such jurisdictions. Any investment decision must be based on a prior study of
the offering documentation and in particular the terms and conditions and key information documents. This
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Global Markets & Economy Adjust to US Tariff Shock

Estates in the UK have already paid a
record. £7bn in inheritance tax this
financial year, up £700m on the same
period last year

If a married couple died together with £2m of assets including a home, it would first pass from the elder to the
younger without any inheritance tax.

We encourage all parents to plan
ahead to put things inplace that
would make things more comforting
and comfortable for their children if
one or both were to die before the
children grow up.

# “Couples who die at the same time can pass on all of the
older person’s assets free of inheritance tax.”


The little-known rule can save relatives hundreds of
thousands of pounds if their loved ones’ deaths were
simultaneous or when it is unknown who died first.

But the law only works this way in England and
Wales, and not in Scotland and Northern Ireland.

It comes as estates in the UK have already paid a
record. £7bn in inheritance tax this financial year, up
£700m on the same period last year, and it’s expected
to rocket after Labour makes pensions liable for the
charge in 2027.

*Inheritance tax haul hits record levels*

![image](/coverage/c31.webp)

Known informally as the death duty, inheritance tax is
charged at 40pc. Individual estates come with a
“nil-rate band” of £325,000, which escapes the
charge, and another £175,000 – the residence nil-rate
band – can be claimed on a main property left to
direct descendants.

Married couples or civil partners can combine
allowances to £1m, even if one has already died, and
there’s no inheritance tax on anything they leave to
each other.


However, if a married or civil partnered couple both
die, they have wills and it’s unknown who passed
away first – such as if they are involved in an accident
where they live plays a huge role in the inheritance tax
due.

In England and Wales, when the order of death is
unknown, it’s legally presumed that the eldest passed
away first. Where inheritance tax is a consideration,
they are judged to have died simultaneously.

This means if a married couple died together with
£2m of assets including a home, it would first pass
from the elder to the younger without any inheritance
tax. 

When it was then passed on again, as the deaths are
considered simultaneous, the elder person’s share is
excluded and only the younger person’s half would be
considered for inheritance tax. If it was left to the
couple’s children, the available allowances mean the
charge would be £0 in this case.

The same would apply to any assets the older person
held solely, such as Isas, shares or property – which
can be substantial. They pass to their deceased spouse
and then instantly to their children, but are not
considered for inheritance tax.

This is even more beneficial than if they had died a
day apart, because in that situation the first person’s
assets would also have been assessed and taxed.

> Estates in the UK have already paid a
record. £7bn in inheritance tax this
financial year, up £700m on the same
period last year

> If a married couple died together with £2m of assets including a home, it would first pass from the elder to the
younger without any inheritance tax.

*Rate of inheritance tax paid on gifts, in the event of the
donor’s death*

![image](/coverage/c32.webp)

In Scotland and Northern Ireland, however, both
people are presumed to have died simultaneously,
so their assets don’t pass to the other. Inheritance
tax would be charged for each person, leaving their
beneficiaries with a total bill of £400,000 in this
scenario. The same applies to any individual assets.


If the couples were not married or civil partners, there
could be more inheritance tax to pay in each country as
there would be no £175,000 residence nil rate bands.

Clare Moffat, of Royal London, said: “If something
like this happens, it’s so hard on families having to deal
with not only one but two deaths. The fact that you’re
going to have a bigger inheritance tax bill depending
on where you live can make an already difficult time
even harder.

“For a couple whose wealth is passed on to their
children, more tax would be paid in Scotland
andNorthern Ireland. I don’t think there’s anything
youcan do that’s going to change the situation, but it
just shows how important planning is.


“It’s vital to think about and talk through the things you
actually can control.”

Simultaneous deaths are rare, as is research on the
topic. In 1994, the US-based Committee on Individual
Life Insurance Experience Studies examined policies
from 29 providers and found that in every 1,000
deaths, 40 occurred from a common cause or within 30
days of each other. The sample included four aviation
accidents and three car crashes.

Studies have also shown that people have a
significantly higher risk of dying within the first 90
days of losing their spouse, known as the “widowhood
effect”.

However, where the order of death is clear and there is
a gap, or the eldest has a survivorship clause dictating
that the beneficiary must outlive them by a certain
number of days, the exemption for England and Wales
would not apply.

*Deaths triggerings inheritance tax to double*

![image](/coverage/c33.webp)

James Ward, of law firm Kingsley Napley, said: “This
provision exists so that if, for example, a father and son
die together and the father left his estate to his son, they
are not subject to inheritance tax on the estate twice.

“However, this is not applicable if the elder person dies
without a will or there is a survivorship clause in their
will, which would state that the beneficiary must live
for a set amount of days to inherit the estate.


“All the survivorship clauses we write have an
exception for simultaneous deaths to provide for this
scenario.”

Alison Penny, of the Childhood Bereavement
Network, said around 27,000 parents with children
under 18 die each year.


She added: “Sadly, in some rare cases, both parents
die at the same time, leaving the children facing huge
upheaval alongside their grief and devastation.

“We encourage all parents to plan ahead to put things
in place that would make things more comforting and
comfortable for their children if one or both were to die
before the children grow up. That could be appointing
guardians, writing letters to their child’s future self, and
planning their finances for all eventualities.”

> We encourage all parents to plan
ahead to put things inplace that
would make things more comforting
and comfortable for their children if
one or both were to die before the
children grow up.

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The tragic inheritance tax quirk that could save you £400k