UK Trends and Developments Contributed by: Roger Gherson, Thomas Cattee, Lisa Uttley and Amalia Gherson, Gherson Solicitors
If the answers to questions 2 and 3 are “no”, the advice on the choice of jurisdiction is less complex and for this article we will classify you as a “regu - lar” HNW family. The issues you and your advisors are likely to be concerned with include overall safety, tax planning, lifestyle and education choices. Here, the changes to the UK non-dom scheme highlighted above make the UK less attractive, but its other ben - efits may outweigh the cost. Individuals in this category will also be considering relocating to a country that respects the rule of law, along with having political consistency and predict - ability. However, as we have noted, a rapidly acceler - ating consideration for such individuals is now actual physical and geopolitical safety. As regards national - ity, a second economic citizenship passport may be explored in light of visa and other restrictions. Where things get significantly more complicated, however, is where a given individual (and/or mem - bers of their family) find themselves answering “yes” to questions 2 or 3 above. If this is the case, then a far more nuanced and tailored approach will be nec - essary. Turning to this considerably more precarious situation, we now set out the much more detailed con - siderations that advisors need to be aware of. The rule of law and diversification Following the introduction and expansion of the vari - ous sanctions regimes (the Russia sanctions regime, Global Corruption regime, Iranian sanctions regime, the sanctioning of Israeli Settlers and the Venezuelan sanctions regime, amongst others), the UK should be approached with far greater caution by anyone who fears being subjected to UK sanctions. The same is true of the EU with respect to most of the aforemen - tioned regimes. The harsh consequences of sanctions and the under - mining of the freedoms and checks and balances created before the Second World War and enhanced after it – as well as the flouting of international human rights treaties – have all been side-stepped in various ways by European and British politicians dictating the sanctions mantra. This has led the judiciary in both the UK and the EU to substantially weaken legislative oversight and devalue the sanctity of individual rights.
The UK Supreme Court, for example, has all but given up defending the rights of those who the State has chosen to target with sanctions. In a much-publicised judgment, it effectively agreed that the courts could not intervene to question the testimony of a civil serv - ant who believed that sanctioning and impounding a yacht owned by an unsanctioned individual (note they were not under sanctions) could theoretically deprive Russia of the income which could be derived from renting that yacht out in the future. No evidence was put forward to prove that any such potential income would be repatriated to Russia, let alone explain - ing the mechanism by which it would be transferred there. And the civil servant’s rationale for their belief? That taking action against the yacht (and thereby its unsanctioned owner) in this manner would somehow increase the cumulative pressure on Russia to end the conflict with Ukraine. What this means is that if you are from a country with which the EU or the UK may take political issue at some undefined point in the future and that could result in the imposition of sanctions against wealthy families or some of their members, then your family office and advisors need to devote considerable time to planning for the wide diversification of your assets. The bottom line – as is fast becoming clear to those of us tracking and making sense of these developments – is that the justice systems in the UK and the EU no longer offer the same legal protections for individuals and their assets in the face of political action rooted in the pursuit of UK/EU foreign policy. Prior to the implementation of the Russian sanctions regime, it was very much the case that many felt assured they would not be amongst those targeted. What has in fact come to pass, however, should serve as a dire warning to Iranian, Chinese, Israeli and South American nationals, to name but a few. Argentinians, for example, should be aware that if their Govern - ment decides to flex its muscles over the Falklands, the consequences for those politically connected to the Government or even just for wealthy individuals, could be devastating. Timing is, as so often, critical. Making the necessary arrangements well in advance for something that may never happen should not be considered sanctions circumvention. Undertaking those same arrangements once you know or seri -
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