Time to come home

We are pleased to announce the launch of High Trust International, a UK based trustee service. It brings together experts in the field of UK tax, trust, and administration to create a much needed service for today’s world.

Vikram has lived for the past five years in London with his wife. His son Sultan runs the family business in India. Like his friends, when he came to live in the UK, he set up a trust in the Channel Islands for his offshore investments, but decided, after much thought and advice, to buy his home in north London direct with a mortgage.

Over the last few years, he has become increasingly concerned as to the information requested of him by his trustees. The latest asked for his tax identity numbers. He booked a flight to the Channel Islands to meet his trustees face to face, to get to the bottom of this increased intrusion into his privacy as well as their fees.

He came away disappointed. His trustees picked him up at the airport and gave him a nice lunch, but when it came to the important questions to which he wanted answers, he felt that he was being sold the party line. ‘The world is now transparent as to financial information and that as trustees in an offshore financial jurisdiction we are obliged to report on your offshore financial assets to the tax authorities in which you are tax resident. Failure to do so will result in fines on us for criminal conspiracy.’ In short, his trustees were the unpaid whistle blowers of tax authorities across the globe.

Vikram like many of his friends, have had experience of a tax investigation. In his case the tax authorities were on a fishing expedition which was based on miss-information.  Like most investigations, Vikram was not told what information the tax authorities had and therefore it proved difficult and distressing to prove that he did not have profits on which the tax authorities were hoping to charge him tax.

It took three long, unpleasant and distressing years to prove that no tax was payable. However, despite being innocent, the tax authorities made him feel like a criminal. Even worse, at the end of this ghastly ordeal, he was then denied any form of compensation for his legal fees or for the distress the investigation had caused both him and his family.

Vikram also took the opportunity of the visit to discuss with his trustees the detail of their annual invoice. He was irritated by the time his trustees had recorded to read e mails which were sent to them with regard to the sale of an investment held in trust. Although, they had no meaningful comment to make, they were still charging him by the hour.

But worse, was that the trust had been charged for the due diligence it had undertaken on Vikram and his family personally.

Many years ago, Vikram had held a minor government official post and the trustees had decided that he should therefore be treated as a politically exposed person. They considered it necessary to undertake extra due diligence on him. They revisited the source of the trusts wealth and where he was tax resident. Much to his surprise and annoyance they had even sought an Indian legal opinion as to when a person is tax resident in India. They had racked up hours of work, of which he had been totally unaware.

I was introduced to Vikram by one of our joint venture partners. We met in London and we discussed his concerns. The first point we needed to clarify was what were his priorities. Did he want peace of mind knowing that his financial information was not flying around the world, or to pay as little tax as possible?

Vikram’s priority was undoubtedly, the protection of his financial information.

I suggested that he may like to consider bringing his trusts into the UK. In London, he could keep a much closer watch as to what his trustees were doing. If he wanted he could set up his own trust corporation and put on his close confidantes as directors. In this way he could be completely in control. They would not need be involved in the day to day administration, just be in control of the main decisions, such as distributions and investment.

All decisions could then be taken quickly, without having to go through approval and compliance. That is not to say that compliance is not alive and kicking in the UK, just that the process of consent is quicker.

The downside is that his trust, being in the UK would be subject to income tax and capital gains tax, but would remain protected from inheritance tax. Paying a small amount of tax, Vikram considered a small price to pay for protection of his financial assets and peace of mind for himself and his family.

Vikram was delighted; the perfect solution to his concerns. He even told his friends.

If you would like to contact High Trust International e mail svetlana@garnhamfos.com or phone 020 3740 7423.

Caroline’s books, ‘When you are Super Rich who can you Trust?’ can be purchased through Amazon, or through Svetlana direct, and her white paper ‘How to win business from Private Clients,’ can also be bought direct from Svetlana.