32
Special report profeSSional ServiceS
In general we
will have a direct
relationship with the
client, often on the
basis that the IFA
might have a client
that requires some
specialist advice or
planning. We will
usually take it from
there at that point
but if the client wants
us to keep the IFA
in the loop we are
happy to do that
“
”
Karen Marks, partner and
private client tax adviser,
Boodle Hatfield
attracting high net worth clientS
BY HELEN BURGGRAF
As politicians in high-tax countries mull over ways of extracting more revenue from their wealthiest citizens,
firms such as PricewaterhouseCoopers in Jersey are fielding more enquiries from wealth managers whose
high net worth clients are considering emigrating. So says Garry Bell, tax director at PwC Channel Islands
(PwCCI), which has seen an increase in recent months in the number of such queries.
Although the company is generally best known for its work as a tax specialist, one of its sidelines
is helping people to navigate Jersey’s immigration channels, according to Bell. He says a number of
changes to the UK tax code have prompted wealthy Brits in particular to think about swapping their
Kensington houses for something comparable in the rolling hills outside of St Helier, or perhaps in
the picturesque northeastern Jersey parish of Trinity.
Not only are UK-resident expatriates who have lived in the UK for
seven years or longer now required to either pay taxes as though they
were resident – or a £30,000 annual charge per person in lieu – but
a new, 50% income tax rate is expected to take effect in 2011 that
will hit those with earnings of more than £150,000.
Still, even though only about 1% of UK taxpayers are likely to
fall into the new higher-tax bracket, the percentage of these whose
incomes would be sufficient for Jersey to allow them to emigrate is
tinier still, Bell notes. This is because Jersey grants residency – or
‘1(1)(k)’ status – only to those who meet a fairly eye-watering series of
requirements, chief among which is the applicant’s ability to contribute
to the island’s tax revenues by at least £100,000 annually.
Bell: ‘fast-track approval’
ence dealing with IFAs,
says Tallon, means it
has not only has the tax
expertise but also the
systems enabling advisers
to make use of it quickly
and easily.
“IFAs can get frustrated
when they phone
up someone up who is
not used to dealing with
financial advisers, meaning
getting help can be time
consuming.” she says. “But
that is our speciality. For
instance, someone might
say they cannot help an
IFA because there is no
‘engagement letter’.
“We allow advisers to
download an engagement
letter from our website and
fax it over, so they can
establish terms of business
very quickly.
“It is these features that
makes our service easy and
convenient for advisers.”
And Tallon adds that
Given Jersey’s tax schedule, under which the first £1m of an
individual’s taxable global income is taxed at 20%, the next £500,000
at 10% and everything above that at 1%, moving to Jersey would
only make sense for those with an annual income of £500,000 or more. In addition, the applicant “also
would need to be able to purchase a house over a certain value, about £1m,” Bell says, referring to a rule
designed to keep wealthy foreigners from pricing Jersey residents out of the market for affordable homes.
It may sound like a lot of red tape and paperwork, but Bell says PwC’s experience is that it can take
“as little as six weeks from starting the process to getting final approval”.
Further information can be found in a Mourant du Feau & Jeune paper at www.mourant.com/userfiles/
files/“K_category”_or_“High_Net_Worth_Individuals”_Residential_Housing_Qualifications.pdf
BDO is well positioned to
assist advisers with international
requirements.
“There is a global network
of BDO offices that
we can link into and advisers
using our service benefit
from that.
“For instance, an adviser
with a client based in
Monaco, Spain or anywhere
else, is unlikely to
be up to date on UK tax
developments but they will
be able to get that from us
through our international
network, through which
we cover most global tax
considerations.”
l Alternative source
Law firms too, offer similar
services, though typically
on a more bespoke, clientfacing
level.
Karen Marks, partner
and private client tax
adviser for London law
firm Boodle Hatfield, says:
“There are a whole range
of services we offer and
much will depend on the
type of client and their
profile and objectives.
“In general we will have
a direct relationship with
the client, often on the
basis that the IFA might
have a client that requires
some specialist advice or
planning. We will usually
take it from there at
that point but if the client
wants us to keep the IFA
in the loop we are happy
to do that.”
Marks says Boodle
Hatfield can advise on a
range of areas, with estate
planning and succession
being common. Others
include advising foreign
clients moving to or buying
property in the UK, as
well as in the structuring
of funds and tax efficient
investment vehicles.
inveStment outSourcin
Help at
By Daniel JuDge
The arguments for using
discretionary investment
managers, outsourced fund
selection or guided architecture
are well known.
They can perhaps be
boiled down to the idea
that professionals should
stick to what they have
been trained to do; in the
case of an IFA that is generally
financial planning, not
investment management.
The consequences of
failing to do this vary, but
at best an adviser may lose
clients if they fail to deliver
on their investment promises
and at worst could find
themselves being sued.
l Thinking strategically
David Gurr, managing
director, intermediary
relations at Deutsche
Bank Private Wealth
Management, describes
the benefits of outsourcing
thus: “We live in an age
of specialisation and the
financial services sector is
no different. Increasingly
advisers recognise the area
in which they add most
value is delivering strategic
financial planning advice
to clients and providing
top-class relationship
management.
“By outsourcing functions
such as compliance,
legal and trust work and
investment management,
which can be done costeffectively
and efficiently
elsewhere, advisers can
free up more time to do
what they do best – and
in the process increase
INTERNATIONAL ADVISER [www.international-adviser.com] MAy 2009
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