UK Trends and Developments Contributed by: Roger Gherson, Thomas Cattee, Lisa Uttley and Amalia Gherson, Gherson Solicitors
Safety, Reputation, Mobility and Wealth: The New Risk Landscape for International Families This year, high-net-worth (“HNW”) and ultra-high- net-worth (“UHNW”) families and their advisors have had to contend with a number of new, diverse and increasingly difficult considerations. As a result, future commentators will likely regard this year as a pivotal moment in the evolution of international wealth plan - ning. The conflict in the Middle East and its ripple effects across the Gulf states, the continued conflict between Russia and Ukraine, along with increased global geopolitical instability, are forcing a rapid re- education. Safety, reputation and physical mobility – long treated as secondary considerations – now sit at the very centre of responsible wealth planning. The UK is still adjusting to last year’s reform of the “non-dom” rules and other tax rises, including the mansion tax and VAT on private school fees. These changes are not welcome news for internationally mobile HNW individuals looking to relocate to the UK. However, more than a year on from some of the biggest changes, a more nuanced picture is emerg - ing and client priorities have shifted visibly. Advice that considers a jurisdiction purely through the lens of making, saving, investing or spending wealth can no longer be given responsibly without also giving proper weight to the issue that has come to domi - nate client conversations: geopolitics. The two must be considered in tandem and can no longer sensibly be assessed in isolation. Changes in the UK tax regime Over a year on from the scrapping of the centuries-old “non-dom” regime, non-UK earnings for UK-based nationals are now taxable after four years in the UK. The Foreign Income and Gains Regime 2026 (“FIG”) does allow new arrivals to benefit from a four-year transitional period in which foreign income and gains remain outside the scope of UK taxation, but thereaf - ter or for those already established as UK residents, worldwide income and gains are generally brought within charge to UK tax. For existing residents, a time-limited facility (availa - ble until 2027) permits the repatriation of pre-existing overseas funds at a reduced tax rate and individuals
with assets held offshore would be well advised to review their position in light of this opportunity. Trust structures have likewise been materially dimin - ished in their efficacy as vehicles for tax mitigation. Offshore trusts that formerly afforded protection from UK tax on income and gains no longer do so to the same extent and whether a trust’s non-UK assets remain within or outside the scope of UK inheritance tax is now determined by the settlor’s period of UK residence, rather than by the settlor’s domicile of ori - gin. With regard to inheritance tax more generally, two reforms warrant particular attention. From April 2026, family businesses and agricultural estates will attract full inheritance tax relief only on the first GBP2.5 mil - lion of qualifying value, with any excess subject to tax at an effective rate of 20%. However, this allowance may now be shared between spouses and civil part - ners. Further, from April 2027, pension funds will, for the first time, be included in the value of an individual’s estate for inheritance tax purposes, thereby ending their longstanding utility as a tax-efficient vehicle for the transfer of wealth. In addition, the rates of income tax applicable to dividend, savings and rental income are increasing and residential properties valued in excess of GBP2 million will become subject to a new annual property surcharge from 2028. Collectively, these reforms bear upon nearly every dimension of a wealthy family’s financial affairs. Giv - en the scale of change already implemented and the further reforms yet to take effect, it is strongly recom - mended that individuals seek personalised profes - sional advice to ensure their existing arrangements remain appropriate and effective. Serious questions in a changing geopolitical environment HNWs and their advisors are facing a fast-changing landscape and finance professionals – in whatever role – would be well advised to assess their advice carefully and adjust it as necessary. The core con - siderations of lifestyle (including education), tax plan - ning and locating to a country that offers sanctity and respect for the rule of law, taken together with the features of predictability and consistency, do remain
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