Trends in Family Wealth Management: Trusts, Taxation, and Asset Protection

Key Developments Affecting Family Offices & Private Wealth

Mandatory Trust Registration (TRS Compliance)

• Under The Trust Registration Service (TRS), all UK-based express trusts and certain offshore trusts holding UK assets must be registered with HMRC.

• Non-compliance may result in significant financial penalties and legal exposure.

UK Inheritance Tax (IHT) Considerations

• 40% inheritance tax (IHT) applies to estates above £325,000 unless tax-efficient estate planning structures are in place.

• Lifetime gifts, Business Relief (BR), and Agricultural Relief (AR) can be leveraged to mitigate tax burdens.

Common Reporting Standard (CRS) and Wealth Transparency

• The UK participates in CRS, mandating automatic information exchange with 100+ countries, impacting tax compliance for high-net-worth individuals (HNWIs).

Strategic Asset Protection Solutions

• Using Discretionary Trusts & Foundations: Establishing UK or Jersey-based discretionary trusts can offer both tax advantages and wealth confidentiality.

• Restructuring Wealth Across Multiple Jurisdictions: Diversifying wealth between the UK, Singapore, Switzerland, and the UAE can enhance privacy and tax efficiency.

• Utilizing UK Family Investment Companies (FICs): FICs provide an alternative to trusts, allowing families to retain control while mitigating IHT exposure.

Conclusion

To ensure long-term wealth preservation, families must adapt their trust structures and implement robust legal frameworks to navigate the evolving UK tax landscape.