CHANGES FOR TRUSTEES

TODAY’S BLOG

CHANGES FOR TRUSTEES

A series of government moves over the past few decades have reduced their tax advantages and made trusts much less attractive to wealthy families. They are likely to become less popular still from March, when a new requirement will force thousands more trustees to list on a government register that is partially open to the public, or risk penalties.

Since 2017, certain types of trusts have had to report information to a government online register called the Trusts Registration Service (TRS). This came into being as result of an EU-wide directive to tackle money laundering. Far be it from me to imply or suggest that motivation for Brexit had anything to do with circumventing new EU Anti-money laundering rules!

To comply with the rules, all UK trusts that have to pay a tax liability such as capital gains tax (CGT), income tax, inheritance tax or stamp duty must report information to the register.

Trusts that are outside the UK but trigger UK tax must also do so, as must all trusts that are required to fill out a self-assessment tax return anyway. Currently the register is not publicly available, with access limited to law enforcement authorities. But from March 2020, the next phase of the EU directive (the fifth Anti Money-Laundering Directive) is set to increase the number of trusts that must submit reports.

It will also partially open up the register to the public, including journalists, leading some to worry about an erosion of privacy. Despite the UK’s imminent departure from the EU, the government is committed to implementing the directive and passing it into domestic law. Tax experts warn that hundreds of thousands of trustees and beneficiaries could be affected and need to understand better the possible impact of the changes.

TRUSTS & MONEY LAUNDERING

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

=

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

=

CHANGES FOR TRUSTEES2020-01-28T14:32:38+00:00

Our Kind of Traitor

Our Kind of Traitor

The new film “Our Kind of Traitor” is based on the 22nd novel by John Le Carre of the same name. For those of you that enjoy some espionage, intrigue and have nagging suspicions about who is really protecting who, this is definitely one film for you.

The story is set within the context of a relationship that is undergoing some difficulties and attempting to find a way forward from a break in Morocco. Work interrupts leaving a brief vacuum into which Dima, a glittering, persuasive millionaire steps.

It transpires that Dima is of course somewhat of a figurehead in the Russian mafia, however he is under pressure to surrender his power to someone higher up the food chain. The drama is set with a potential trade of family lives for information.

Money, Sex and Power

As ever Le Carre points to the colour of money and the interchangeable values that it solicits. He questions the lack of questioning posed by the powerful when the sums are significantly enticing enough to look the other way, ask no questions, tell no lies. Le Carre has a regular discussion about the dynamic of money, sex and power. Indeed these are probably the basis for almost every thriller within the genre.

Whilst we may not find ourselves in the same position as Perry and Gail (Ewan McGregor and Naomie Harris) we do find ourselves regularly facing buying and investing decisions, from the apparently minor issues of everyday grocery shopping to how we vote. At a time when the City and those within the financial services are still largely untrusted, this film asks questions about provenance.

Of course, those within the financial services industry can point to a catalogue of incidents where “looking the other way” was detected by the regulator, resulting in considerable yet insufficient fines to truly deter such practice and culture (despite assurances that lessons have been learned). It would seem that the big fish generally do get away with it, whilst any financial adviser failing to do the required checks would face rather harsher punishment. There is little escaping the sense that the rules do not apply equally, something I imagine that Mr Le Carre would say.

Here’s the trailer.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Our Kind of Traitor2017-01-27T10:57:05+00:00

Panama Papers

Panama Papers

I imagine that you will have picked up on the current big story – the Panama Papers. I imagine that this will rumble on for some time. There are lots of issues to discuss, the ability for the very wealthy to hide their wealth, those that facilitate this to happen, laws about secrecy, laws about laws, political corruption, money laundering, what is ethical, the difference between tax avoidance and tax evasion… not to mention data security.

I don’t know if my thoughts will add much to the discussion, suffice to say that “the system” (by which I mean global tax system) is so complicated that it is little wonder that it is exploited, or some may say “used to advantage”.

It is a sad state of affairs when the wealthy believe that they require such secrecy and the better questions will ask why it is really required. As for the tax system – nobody really likes paying tax, but of course if we want any sort of welfare state or viable social system, we need to combine resources collectively. I don’t know if the debate can be reduced to a matter of “vast wasted taxes spent by bureaucrats” or perhaps “we pay too much tax”.

The other Black List

Fairness is very difficult to define. The vast majority of people in the UK pay very little in direct taxes. The reality is that we are all, quite obviously, interconnected. Billionaires paying less tax than their staff simply does not seem fair in any form. I’m reminded of a line from “The Black List” in which the main character, Raymond Reddington, says “if I paid any tax I’d be furious at how it is wasted” or words to that effect.

Tax is one of those deeply divisive issues and of course is enmeshed with political ideology. Part of my job is to help clients minimise tax payments and use tax allowances properly. So I’m acutely aware that I’m part of the problem… essentially taking tax receipts off the table, so that more needs to be found. Nobody likes to see public money wasted, which merely compounds feelings of frustration. The Panama papers imply that those in charge of deciding how public finances are spent, don’t like the way they do it for their own nations.

Daring to think simply?

Does life have to be so complicated? If there was one rate of tax, would there be any need to hide money? (currently taxed at very different rates). If the very rich could declare their wealth properly, would more tax be collected? Is anyone immune from financial corruption as the numbers get larger and larger? Does the reality that the Offshore market exists confirm the suggestion that the very rich would leave, if tax rates are increased? Or have they effectively already left? Is it possible to have fair taxes when certain countries exist purely to defy such reasoning (Monaco). Certainly rather more is to be revealed by the #PanamaPapers and one thing that is certain to me…. this is not new news.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Panama Papers2017-01-06T14:39:18+00:00

Money Talks

Money Talks

You’ve heard the expression “money talks” I’m sure. Well, if you have tried to open a savings account or current account with a main UK bank in the last 10 years or so you will have observed and experienced a high degree of red tape and hoops that you have to jump through to prove you are who you say you are (even if you’ve been with the bank for your entire adult life).

If you are a client, you will have gathered that we have to verify your identity, residency and source of your funds. We try to make this as painless as possible and apply common sense. This is important (sadly) because there are people out there that are involved in criminal activity, taking money made from drugs and laundering back through legitimate financial arrangements so that it becomes “clean”. Just so that you are clear, if we (or anyone in financial services) suspect this is the case, we have to report it, else risk imprisonment ourselves.

So it was with some degree of surprise that I read that Barclays received yet another eye-watering fine. This time for poor handling of financial crime risks. The fine imposed is £72million. This relates to the lack of checking done on some of their clients…. ultra high net worth clients, who were “politically exposed people” (a term used not just for politicians, but those also in positions of significant public service etc)

Suits you sir…

Barclays were caught arranging £1.9billion (pause, that’s billion)… for a few such ultra high net worth individuals, without the proper checks in place. Perhaps it had something to do with the commission that they earned in the process – some £52.3million (all in a day’s pay). This occurred in 2011 and 2012 when Bob Diamond was at the helm (until July 2012). He resigned as a result of the Libor scandal. Anyway Barclays went to “unacceptable lengths to accomodate these ultra high net worth individuals”.

The FCA have fined Barclays in the hope that it will make them think twice about similar actions in the future. The real motivation is of course the sums involved, and as the FCA’s final notice said the clients involved were ‘politically exposed persons’ which are individuals with a ‘high political profile’ or have or had held public office, and pose a higher money laundering risk as their positions may make them vulnerable to corruption.

So now you know that the regulator thinks such people are at greater risk of corruption. Yet the irony is that had this incident happend at a financial planning firm, like this one, should it have been found wanting in such a manner, a custodial sentence and lifetime ban would have probably been handed down…. so there’s more than a slight degree of “power play” at hand here. Hence a few advisers are more than a little peeved that yet again, despite the big fine, the punishment never lands anywhere other than the shareholders in the Bank… after all aren’t these senior executives remunerated for the risk that they take? isn’t that why the big bank, pays big salaries, to big names to work with other big names and get away with a big golden handshake?

What still perplexes me, is why anyone would ever use a Bank for anything other than a bank account…. yet they do, in their millions.

You can see the FCA fine notice here… for the breach of principle 2.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Money Talks2017-01-06T14:39:21+00:00
Go to Top