I have recently completed a plan for a very dear and long standing client Yuri and his wife Rosie.
Yuri has for many years owned an estate in a beautiful valley in the Cotswolds where he keeps his horses and herd of prize cattle. He also runs a shoot, but has over the last few years been thinking of winding it down since he does not get as much pleasure out of it as he used to.
He and Rosie have four children, one of whom is keen on dressage. Katie spends most weekends in the country and his son Mani likes shooting. I remember when Katie, who is the youngest was just a baby - she is now 22 - so I must have known them now for over 20 years.
Having spoken to Yuri last year I knew he was angry about paying the annual tax on enveloped dwellings, but nevertheless paid it since he saw it as protection against an inheritance tax charge which has now been removed by George Osborne in the summer statement. Both Yuri and Rosie are in good health and are in their early sixties, so they are not worried about the imminent payment of inheritance tax. However, having got used to the idea of their country home being tax free because it was owned in an offshore company, they intensely dislike the idea of now having to pay 40% tax on it, which they would prefer to go to their children.
The estate is currently worth about £10 million which means they would be looking to pay £4 million to HMRC rather than an extra £1 million to each of their children.
Yuri has recently been very busy working in his technology company which he formed in the late 1990s. It is owned by a trust which I set up for him before he became resident in the UK for seventeen years.
I had some solutions which we discussed when we met in late summer at his country home.
In the opinion of Yuri, which was shared by Rosie, although they travelled extensively they both loved their home in the country and would not want to become non-resident, and certainly not for tax reasons.
I first wanted to find out their priorities. Once established we then went through the options, costs and savings. Top of their list was not to have to worry about ever more hostile taxes such as ATED and they did not want anything which was in any way risky. Both Yuri and Rosie have a healthy respect for authorities such as HMRC and their potential for creating a very uncomfortable few years. I set out for them in some detail to make their decision simpler.
Once they had come to a decision, I then set out a schedule of work to implement the solution. They had formerly engaged me as a private client lawyer and knew my working standards and my reputation.
I said that to make the process as seamless and straightforward as possible, I would discuss the schedule with Yuri and Rosie’s lawyers and approve a timetable with them. Yuri and Rosie authorised their lawyer to disclose information and progress with me so that I could appraise them on progress and on any sticking points they came up with. Having dealt with them for many years, I knew their preferences on reporting so I put enough detail in the reporting.
The lawyers were delighted because they could get on with doing what they were good at, Yuri and Rosie were happy because they were used to dealing with me and were confident I was acting in their best interests. The transaction was completed ahead of schedule and I made sure the lawyers were paid in full and on time. Each party involved was happy with the outcome and the fact that we saved both on time and costs.
My relationship with Yuri and Rosie is far from unusual and there are many UHNW families which trust their adviser implicitly, because they have not let them down and provided a good service. However, there are other families which do not have such a strong relationship with their adviser or they have an adviser who is not skilled in this area, or worse they are not confident that their adviser is acting in their best interest.
For families who want an independent, neutral and strong team to support them in finding solutions and the right advisers to implement those, Garnham Family Office Services is ideal.
Yuri and Rosie said on the feedback form that our services provided them with a ‘stress free seamless service which ideally suits our circumstances’. Of course circumstances and laws change so any plan must always be kept under review, but for now it suits them very nicely.
If you or your contacts or clients have similar concerns to Yuri and Rosie, please contact firstname.lastname@example.org or phone on 020 3740 7423 to arrange a meeting.