Nancy Chien, Partner at Bedell Cristin's International Private Client practice in Jersey recently took part in a webinar hosted by Ocorian; "Looking beyond lockdown: implications for the private client industry". For those who do not have time to watch the whole webinar, Nancy has helpfully provided the key discussion points below:
- To pay for the cost of Coronavirus, governments may increase borrowings and taxes. UK government may look to increase inheritance tax to remove Potentially Exempt Transfers, introduce up front taxes on legatees and abolish Business Property Relief. Across the globe, we may see the introduction of a wealth tax on capital assets. Saudi Arabia has already increased VAT to 15%.
- Increases in taxes in home jurisdictions might mean that more people look offshore. Offshore is still a good option for families with international assets or for those who wish to retain an element of control over their wealth.
- Different stages of lockdown has meant different client needs. Asia locked down early and activities have already started to pick up there. Clients in Europe and the Middle East, which were affected and locked down later, tend to still be reflecting on current structures and whether they achieve what they want.
- Coronavirus was a huge shock to the market but the recovery has been astonishing. Investment habits unlikely to change. We won't necessarily see a shift towards alternative markets but it is likely that ESG investing will continue.
- We are seeing more clients with structures in locations with less regulation looking to move those structures to jurisdictions such as the Channel Islands which have well regulated and robust systems in place. Looking ahead, offshore structures may face more scrutiny but the focus will be on those jurisdictions which don’t have the same level of regulation in place.
- Given the political situation in Hong Kong, more Hong Kong and Chinese clients will look offshore. So far, Singapore has been popular for Chinese private clients, although Channel Islands still has an important role to play, both for the establishment of offshore structures as well as to facilitate the establishment of Singapore law governed structures. Jersey law structures are becoming popular albeit often with trustees from Singapore or Hong Kong.
- Brexit is here to stay and a "No Deal Brexit" seems likely. But the world has changed because of Coronavirus. Globalisation has been very fragile over past 3 months and businesses have already had to adapt. The impact of "No Deal Brexit" might not be felt as much as initially thought.
- Unlikely that the markets fall as a result of a "No Deal Brexit".
- The global lockdown has changed people's habits and it is likely that we will travel less in the future. For the private client industry this means that we are likely to use a mix of online and face to face interactions in order to build relationship with clients.
To watch the whole webinar click here.
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