Navigating the fiscal shift: tax efficiency in an evolving Europe

In international wealth planning, taxation is rarely static — and 2026 is shaping up to be another year where small legislative shifts may have disproportionate financial consequences. Across Europe, adjustments to capital gains treatment, dividend taxation, and cross-border reporting requirements are gradually changing how investment structures perform after tax.

For internationally mobile clients and those with assets in more than one jurisdiction, the key risk is no longer headline tax rates, but misalignment: structures that remain legally compliant yet quietly lose efficiency as rules evolve.

One area that deserves particular attention in 2026 is investment income taxation, especially dividends and distributions. In several European jurisdictions, reliefs and exemptions that investors relied on in recent years are being narrowed, reclassified, or subject to additional reporting conditions. As a result, portfolios that were optimised only a short time ago may now generate a higher tax drag than expected — even without any change in underlying performance.

Another growing consideration is how and where investments are held, rather than what is held. The difference between holding the same assets directly, through an insurance-based structure, or within a pension wrapper can materially affect:

• the timing of taxation,

• the applicable tax base,

• and the interaction with double-taxation treaties.

For clients with cross-border exposure, this interaction is becoming increasingly important. Double-taxation treaties remain effective tools, but their practical application often depends on precise structuring and correct documentation. Without regular review, investors may find themselves paying tax twice simply because allowances are not being claimed correctly or reporting requirements are not met in the expected format.

It is also worth noting that regulatory transparency is increasing, not decreasing. Enhanced information exchange between tax authorities means that inconsistencies across jurisdictions are more likely to be identified. This makes forward planning essential — not to avoid tax, but to ensure that wealth is structured ethically, legally, and efficiently.

From an IFA perspective, 2026 is less about reacting to a single dramatic tax reform and more about ongoing optimisation:

• reviewing whether existing structures are still fit for purpose,

• stress-testing portfolios against different tax scenarios,

• and ensuring that personal circumstances, residency, and long-term objectives remain aligned with the way assets are held.

A proactive tax review today can prevent unnecessary leakage tomorrow. In an environment where returns are increasingly scrutinised net of tax, clarity and structure are no longer optional — they are integral to long-term wealth preservation.