Liquidity Strategies for Asset-Rich Individuals

Why Asset-Rich People Face Liquidity Challenges

It is one of the most common paradoxes in personal finance: you can be worth millions on paper yet struggle to find cash when you need it. Property portfolios, business equity, farmland, fine art collections, pensions with restricted access — these are all forms of wealth, but they are not liquid.

The problem often surfaces at the worst possible moment. An inheritance tax bill arrives within six months of a bereavement. A self-assessment payment on account is due but your income this year has been lower than expected. A divorce settlement requires one party to buy out the other's share of the family home. In each of these situations, the underlying wealth exists — the difficulty is converting it into cash quickly, efficiently, and without triggering an unnecessary tax charge.

The instinct for many people is to sell something. But selling under pressure almost always means accepting a lower price, crystallising capital gains tax at an inconvenient time, or losing an asset that would have continued to grow in value. There is a better way.

Below we outline six core strategies that asset-rich individuals in the UK can use to solve liquidity problems. Each one has its own strengths, and the right approach depends on your circumstances. We have written detailed guides on each — follow the links to explore further.

Strategy 1: Asset-Backed Lending

Asset-backed lending allows you to borrow against the value of assets you already own — property, share portfolios, bonds, or other investments — without selling them. Lenders typically offer between 50% and 80% of the asset's value as a loan, with interest rates that reflect the quality and liquidity of the underlying security.

This is often the fastest route to cash for individuals with substantial investment portfolios or unencumbered property. Because you are borrowing rather than selling, there is no capital gains tax event. The asset remains yours and continues to generate income or appreciate in value. When the liquidity need passes, you simply repay the loan.

Asset-backed lending is particularly useful for meeting tax deadlines, bridging a gap between selling one property and purchasing another, or funding a business opportunity without liquidating long-term investments.

Read our full guide to asset-backed finance →

Strategy 2: Luxury Asset Finance

If your wealth is tied up in non-traditional assets — fine art, classic cars, jewellery, wine collections, or yachts — specialist lenders can provide loans secured against these items. The market for luxury asset finance has grown significantly in recent years, with lenders now comfortable assessing and lending against a wide range of high-value collectibles.

Loan-to-value ratios are typically more conservative than for property or shares (often 40% to 60%), but for individuals whose wealth is concentrated in these asset classes, this can be a valuable source of liquidity. The items usually remain in your possession, or are held in secure, insured storage during the term of the loan.

Read our full guide to luxury asset finance →

Strategy 3: Family Investment Companies

A family investment company (FIC) is a private limited company used to hold and manage family investments. While not a liquidity solution in the immediate sense, a well-structured FIC can transform how a family manages wealth across generations — providing tax-efficient income extraction, inheritance tax planning, and protection of assets.

By transferring assets into a FIC and structuring the share capital carefully (often using different classes of shares for different family members), you can retain control over investment decisions while gradually passing value to the next generation. Corporation tax rates on investment income within a FIC are often lower than higher-rate personal income tax, creating a cashflow advantage that can itself ease liquidity pressures.

Read our full guide to family investment companies →

Strategy 4: VCT Tax Relief

Venture Capital Trusts (VCTs) offer some of the most generous tax reliefs available to UK investors. You receive 30% income tax relief on investments up to £200,000 per tax year, dividends are tax-free, and gains on disposal are exempt from capital gains tax — provided you hold the shares for at least five years.

For individuals facing a large income tax bill, investing in a VCT can effectively reduce that bill by up to £60,000 in a single year. While this does not create immediate liquidity from existing assets, it can be a powerful part of a broader tax planning strategy that reduces the amount of cash you need to find in the first place.

Read our full guide to VCT tax relief →

Strategy 5: IHT Planning and Lifetime Gifting

Inheritance tax is often the trigger for the most urgent liquidity crises. A 40% charge on estates above the nil-rate band (currently £325,000, frozen until 2030) can produce bills of hundreds of thousands of pounds — payable within six months of death, and often before probate is granted. Use our free IHT calculator to estimate your exposure.

Proactive IHT planning — using annual gift exemptions, potentially exempt transfers, trusts, and business or agricultural property relief — can dramatically reduce the eventual bill. For those who have already inherited an IHT liability, understanding the options for paying in instalments or borrowing against estate assets is critical.

Read our full guide to inheritance tax planning →

Strategy 6: HMRC Payment Plans

If your liquidity challenge relates specifically to a tax bill you cannot pay on time, HMRC's Time to Pay arrangement may provide breathing room. This is a formal agreement to spread your tax payment over a period of months — typically up to 12 months, though longer plans are sometimes possible for larger debts.

Time to Pay does not eliminate your obligation — interest continues to accrue — but it does prevent penalties for late payment and gives you time to arrange more permanent financing. It is often best used as a short-term bridge while you put a longer-term liquidity strategy in place.

Read our full guide to HMRC Time to Pay →

Choosing the Right Strategy

No single strategy is right for every situation. The best approach depends on a combination of factors: the type and value of your assets, the urgency of your cash need, your current and future tax position, your appetite for risk, and your long-term financial goals.

The single most important step is to take advice before you are under pressure. If you know a liquidity event is approaching — a tax bill, a property transaction, a family event — start planning early. The earlier you engage, the more options you have, and the better the terms you are likely to secure.

Every strategy outlined above is explored in depth in our individual guides. We encourage you to read those that are most relevant to your situation, and then speak with one of our specialist advisors to build a plan tailored to your needs.