In trusts we trust

The last time I was at Queen’s Club was for the tennis tournament which I thoroughly enjoyed with friends and family. But on Wednesday evening with the stands and tents gone, it looked eerily quiet in the pale moonlight. I had come – not to play tennis, but to hear a debate.

Normally, I am content to read what journalists and commentators have to say about current affairs or listen to them on the TV, or radio. However, on this occasion, I wanted to hear directly what Isabel Oakshott, presenter on the BBC, Daniel Johnson editor of Standpoint and Alan Lockey former adviser to Labour MP Tristram Hunt and former senior adviser to the Labour Party – had to say.

The topic was Brexit, but neither Isabel nor Daniel seemed particularly perturbed about Brexit – what was really of concern for their country was the threat of Corbyn getting in to No 10!

Isabel said ‘There is no ‘money tree’ - other than what you can borrow’.

But Daniel was more forthcoming,

‘If Jeremy is elected’ he said ‘there will be queues to leave the country - 90% wealth taxes’. It was clear that in his view with swingeing taxes everyone who could make money for the country would leave.

Alan meanwhile, confessed that he had never voted any party other than Labour all his life, but could not and would not, vote Corbyn.

Following the debate, deeply disturbed by what I heard, I telephoned a friend who is high up in the Tory establishment ‘Surely now is the time for the Tory party to speak up for Britain; a world class financial centre – the new Singapore or Switzerland – post Brexit’ – Her reply – ‘There is no political appetite for appeasing the rich!’

 Given that no political party seems to want to support our biggest tax payers, it is time to go back to the drawing board.

I have been serving UHNW clients for over three decades and this is no time to be defeatist.

Trusts have been used for centuries to protect wealth for future generations and if they can be used in Britain as recently as August of last year on the death of the 6th Duke of Westminster to save for his family the lion’s share of their £9.35billion they can continue to be used for our clients, whether Brit or not – with one massive word of warning.

Governments across the world are united in their enthusiasm to stamp out tax evasion – and quite right to. But within the ambit of tax evasion, they want to lump aggressive tax avoidance – and under this umbrella they wish to include trusts. But even Governments cannot step outside the law, although we must be mindful as to what laws they intend to use to get what they want!

From the manual written for tax inspectors across the world for the financial information they will automatically receive when CRS kicks in – any trust of any significance – with a Protector – is to be investigated – if the Settlor is still alive.

Why, is this combination so relevant - because if the trust has a Protector, the Government is justified to investigate as to whether the trust is genuine or a sham? If a sham, then the trust can be ignored and the settlor taxed as if the monies were still owned by him or her.  

Trusts are an invaluable tool which, when set up correctly, is superior to most other wealth ownership structures. What we do for our families is to use trusts as the core of their set up but include corporate elements which give the proper checks and balances, the Ring of Confidence and it is a scenario they feel more comfortable with.

To quote Lord Tomlinson in the case taken by a former Duke of Westminster concerning planning in 1936

‘Every man is entitled if he can to order his affairs so that the tax attaching under the appropriate Acts is less than it would otherwise be. If he succeeds in ordering them so as to secure this result, then however, unappreciative the Commissioners of Inland Revenue or his fellow tax payers may be of his ingenuity, he cannot be compelled to pay an increased tax’

In other words – the law is the law – and if in planning we, in the industry, can stay well within – not only the letter of the law, but also the spirit, and here I mean watching out for what HMRC and other tax authorities are up to, our clients ‘cannot be compelled to pay an increased tax’.

If you would like to meet Caroline and hear how the world has shifted in its approach to UHNW individuals over the years, join her to celebrate the launch of her two books at the Institute of Directors on Tuesday 7th November 2017 at 6.00pm. We will also be celebrating the launch of BConnect Club, the digital tool used by UHNWIs, their Family Offices and the industries which serve them.

To get an independent trust review or discuss all matters relating to privacy, control and protection of your assets please contact us direct.

Contact :

                        020 3740 7423

Press Release videos for our books below:

'When you are Super-Rich who can you trust'

'Uncovering Secrets: Winning business from Private Clients'