LAW FIRMS BRACE FOR ENQUIRIES
BY HELEN BURGGRAF
The global financial crisis is, by most accounts, far from over. But
when the dust settles, many investors who have lost significant sums
are certain to explore legal ways of recouping at least some of their
investments, experts say.
David Wilson, a partner at BakerPlatt, the Jersey-based law
firm that specialises in sorting out disputes and regulatory issues
typically involving financial services businesses, anticipates a rise in
enquiries about recent investment losses “when people start looking
at their investment portfolios, and wondering who to blame”.
Although it is too late for IFAs to do much about advice they may
have given before the credit
crunch began, Wilson says they
must remain “very alive to the
need to adhere to their own
policies and procedures, and
to ensure that those policies
and procedures match
regulatory best practice”.
This is because courts
view their clients as financial
innocents of sorts, who are
presumed to require much more
explanation than, say, clients
Wilson: need to adhere to policy who are investment management
professionals, he says.
Some firms have already begun to receive queries about losses
resulting from the collapse of early credit crunch casualties such
as Lehman Bros and Bear Stearns, and there is talk that some
depositors whose savings were trapped in offshore subsidiaries
of failed Icelandic banks are also considering legal action.
But Wilson says it is unlikely many if any Icelandic bank
depositors will come before the Jersey courts unless either they
or their IFAs are based on the island.
dealing with IFA tax queries,
whether UK or overseas
issues.
Paula Tallon, tax partner
at the firm, explains: “BDO
acquired this business from
Chiltern two years ago and
it had been operating for
more than 20 years before
that, so we have built up a
wealth of experience dealing
with IFAs’ tax queries.
“We have structured
the service so that they
can access advice in different
ways. There is a
pay-as-you-go option
where advisers can phone
up, which costs £60 for
every 12 minutes, or a
subscription service with
a monthly fee starting
at £60 pm.”
BDO’s length of experi-
SPECIAL REPORT PROFESSIONAL SERVICES
BENEFITS OF TRUST PROPOSITIONS
Nicholas Burton, head of
proposition, international,
Norwich Union International,
outlines the benefits of using life
offices’ trust propositions.
How does NUI help IFAs and
their clients with estate
planning needs?
� Discretionary and bare trusts;
these encompass discounted
gift trusts, loan trust, gift
trust, probate trust and
Burton: ‘IHT is a complex area’
excluded property trust.
� A customer guide to IHT to
help customers understand trusts and estate planning.
� An ‘adviser academy’ where advisers can receive tax and trust
education.
� You can hold multiple assets in the discretionary trusts and even
gift existing investments and non-NU investments.
Is there still a need for IHT planning if you have left the UK?
UK IHT is normally payable on worldwide assets by UK-domiciled
individuals, so if you are UK-domiciled you will pay it on all assets.
Being non-UK-resident does not mean you avoid UK IHT.
Are advisers worried about giving IHT advice because of the
perceived complexity of the system?
Yes, the chargeable lifetime transfer regime is more complex than
the potentially exempt transfer regime, so the advice process is now
more complex. There is more potential to make a mistake, either
at the time of the gift, or at the ten-year anniversaries, or on money
exiting the trusts.
What other sorts of costs may be run up if people set up trusts?
Can these be avoided?
There may be costs for financial advice, accountancy fees if you
need to complete tax returns. If you would like a professional trustee
service, this is normally quite expensive. But, the costs of setting up
and managing a trust can normally be done by a financial adviser
within the fees you have agreed.
What are the respective benefits of using on or offshore trusts?
The key fact is where are the trustees resident, who will pay any
tax that may be due in the future from the investments and the trust.
Do trusts have uses outside of IHT planning? What are they?
Yes, the common one is avoiding the delay for probate (i.e. assets
can be distributed quicker). Another is confidentiality – your assets
will not appear in the obituary column.
“
We have
structured the service
so that they can
access advice in
different ways. There
is a pay-as-you-go
option where advisers
can phone up, which
costs £60 for every
12 minutes, or a
subscription service
with a monthly fee
starting at £60 pm
”
Paula Tallon, tax partner,
BDO Stoy Hayward
For more information contact David Austin +44 (0)20 7155 5866 or david.austin@cazenovecapital.com
Need advice?
How does the latest Budget affect you?
Structuring of your wealth, pensions, management of your assets.
Cazenove Capital Management Limited is authorised and is regulated by the Financial Services Authority and provides independent advice.
MAY 2009 [www.international-adviser.com] INTERNATIONAL ADVISER
31
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