On Thursday 28 March 2019, Dixcart hosted its Annual Tax and Trust Seminar; this year titled: 'The Future of International Succession Planning'.
Sean Dowden, Managing Director of Dixcart Portugal, chaired the Seminar and began by introducing the Dixcart Group and covering some of the key reasons why succession planning is such a necessity.
The transfer of wealth to the next generation is a critical issue and extensive planning, during the lifetime of the creator or custodian of a family's wealth, needs to take place to ensure that the next generation successfully receives, manages and enjoys the family wealth. Trusts and Family Investment Companies play a valid role in assisting with succession planning for high-net worth individuals, including those who are globally mobile.
The Future of Trusts
The first presentation was from John Barnett on the future of trusts and the advantages that they offer. Despite anti-avoidance legislation, trusts still play a key role in estate planning.
John heads Burges Salmon's private client departments in Bristol and London and provides tax advice to a wide-range of high-net worth individuals and many leading banks and other financial institutions. He explained the structure of a trust and gave some key points on how trusts can be used (the Trust Umbrella).
Trusts are often used to help mitigate tax liabilities and to assist with the flow of family wealth across the generations. They owe a duty to both the settlor (the person who places assets in the legal custody of another) and the beneficiaries of the trust.
John ended his presentation with some planning ideas and future tips on establishing and managing a trust.
The Role of Family Investment Companies in Succession Planning
Deborah Clark was the second Seminar speaker. Deborah is a barrister and partner at the law firm, Mills & Reeve LLP.
Deborah's presentation was on the use of Family Investment Companies (FICs) and the potential advantages of using them for succession planning; namely protection of private wealth, protection against divorce and the potential tax benefits, specifically in the UK. She outlined the key benefits of an FIC, the funding, tax position, corporate structure and governance.
FICs are effective in being able to provide income for shareholders that can be controlled, and can protect capital for future generations.
The Relevance of the Jurisdictions of Guernsey and the Isle of Man
Guernsey and the Isle of Man are two well-regulated jurisdictions that are tax neutral, politically stable, and well placed for the establishment of either a trust or Family Investment Company.
Bruce Watterson, a director of the Dixcart office in Guernsey, closed the presentation by giving an overview of the changing needs that affect families and how they plan for succession.
It is now often the case that the next generation are living outside their 'home' jurisdiction and this can cause complex family arrangements and there is a need for straight-forward, tax efficient structures, which can assist, when the time comes, to move family wealth from the founding generation, to the next generation.
The Seminar was followed by networking and refreshments. We had beer from Switzerland, English white wine and Portuguese port – all of which was very well received. A number of people congratulated us on this unique and inspiring idea for representing some of our other offices.
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