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Alex Picot Trust’s 2016 year in review and a look ahead to a new year and new rules

Tuesday 20 December 2016
Alex Picot Trust’s 2016 year in review and a look ahead to a new year and new rules

Tax will always be a headline grabber and the UK Government’s 2017 tax reforms have certainly generated plenty of column inches over the last few weeks of this year. Tax issues have also dominated the Alex Picot Trust blogs, as has Jersey’s adherence to international standards on transparency and information exchange.

Our regular blogs are created to keep you up to date with all the hot topics affecting offshore structures, but if you missed any here’s a quick overview of those we have covered:

ATED  Importantly for Jersey residents, the tax – known as the Annual Tax on Enveloped Dwellings (ATED) – applies to all UK residential properties held within a company structure. Introduced by the UK's 2013 Finance Act, residential properties worth in excess of £2 million were initially subject to ATED. Now (since April 2016) ATED applies to any residential property valued in excess of £500,000, held in a Jersey or UK company.

Inheritance tax and CGT  Our message to individuals is to consider carefully what tax liabilities might arise and review their structures to ensure they are sheltered from the ever-changing UK property tax laws. To illustrate the impact of the tax reforms on UK residential property owners we created 4 scenarios to show the implications of holding assets in offshore trust and company structures.

UK non-dom status  The complex tax treatment of non-dom individuals and the proposed changes require further consideration. With the time it takes to become UK deemed domiciled for inheritance tax purposes reducing, now is the time to set-up an offshore structure. Those affected will be: anyone approaching 15 years UK tax residency; individuals with a UK domicile of origin considering a move back to the UK; and any individual who holds UK residential property through an offshore company or trust.

The Common Reporting Standard   Featuring high on the global finance news platforms, CRS is something we have touched upon during our commentary this year as it’s an important issue for us and our local and global clients to understand.

Beneficial owners (Register of Directors)  Following consultation and to comply with the MONEYVAL recommendations (the monitoring body of Europe) the JFSC is creating a central register of directors of Jersey companies, to be introduced by mid 2018. Ultimately the UK Government intends to make the UK’s property ownership fully transparent, Jersey will follow and the requirements. From 30 June 2017, all corporate and legal entities will be required to update the Jersey Companies Registry of any changes to ultimate beneficial ownership and control within 21 days of the change.

 

From an Alex Picot Trust perspective, 2016 has been another busy year for us.

While our focus remains on upholding our traditional values to provide a personal service to our clients, we’ve upped our marketing and business development activity to ensure our local and global profile continues to develop. That has included our Directors building global networks through our membership of Kreston International.

Kreston is a network of global accountancy firms which brings many advantages including opening up access to the expert knowledge of fellow members in over 110 counties to provide our clients with cross-border guidance. In return we are pleased to offer qualified insight to them concerning offshore trust and company matters.

In preparation for global tax changes we also this year appointed a Tax Consultant to bolster our capabilities in providing the most tax efficient management of private and corporate wealth for our clients.

As well as sharing our knowledge through our regular blogs and newsletters, the last few weeks of the year have seen us going out to meet with local investment managers to provide their teams with tax briefings ahead of the 2017 reforms.  These have been well received, and we’re happy to provide them to anyone seeking insights and guidance around the new rules.

The States of Jersey 2017 budget also proposes a number of tax changes and our team is ready to help clients navigate the new rules as and when they are introduced. We wait to see the outcome of the proposed changes, to read 2017 Budget speech click here.  As more HNW individuals consider their options in light of Brexit, and a move to Jersey offers a favourable alternative and we're ready to support those who wish to move to Jersey. 

As we near the end of 2016 the overriding message is 'be prepared' for the new rules.