When Corporate Needs Meet Private Client
“International HNWIs must plan for additional events which do not concern a domestic client, such as pre-arrival planning, or where they plan to leave the UK”, says Joe Cobb an Associate in the Private Capital team at Addleshaw Goddard.
“Such clients often have an array of professional advisers and the ability to work with other professionals is key to delivering top quality service for international clients.”
He discusses more about his role and work with high net worth individuals (HNWI).
What different requirements do international HNWI clients have, in comparison to domestic clients?
Similarly to our domestic clients, international HNWIs have an array of business and investment interests that need to be balanced with their wider family circumstances. There are, however, added layers of complexity on which a skilled adviser must advise. Clearly, international HNWIs may require guidance as to domicile and the implications of that domicile on inheritance tax and estate planning. Additionally, the complexities of an international investment or asset base require an ability for advisers to be able to assist with succession and tax laws in multiple jurisdictions. Addleshaw Goddard is fortunate to have a network of international offices and “best-friend” firms which allow us to draw on this additional expertise.
How do you use your expertise to meet their demands?
Given that no HNWI is the same, we understand the need, and have the capability, to provide a bespoke and tailored service to suit the needs of each particular client. Our private client team forms part of a full service commercial law firm and our solicitors are immersed in a commercial environment from day one. This environment gives our team a unique but dynamic edge, one which we use to ensure we can provide HNWI clients with leading private client expertise, as well as the corporate services that they may require.
Could you explain why more clients are establishing Family Investment Companies and what the advantages are?
We have been seeing an increasing number of clients look towards corporate vehicles to structure wealth and mitigate against income and capital gains taxes. There are significant opportunities available to clients who wish to plan for family succession using vehicles which are flexible and allow for additional inheritance tax planning, whilst being familiar to those clients used to dealing with a corporate environment.
A company can be used to hold family wealth for the medium to long term, with investments generating income and gains which are taxable at corporation tax rates and then reinvested. The company can be funded by way of loan, meaning that clients can draw down on a regular “income” without paying higher rates of income tax, whilst the growth in value can be outside of their estates. Flexible share classes allow dividend payments to children and/or family trusts, allowing the clients (who are typically the directors and the controlling shareholders) to distribute cash amongst the family at their complete discretion.
When drafting various bespoke settlement deeds to hold group life assurance policies for corporate clients, what challenges arise for you? Moreover, what expectations do corporate clients have, which could be over-adventurous?
Drafting a bespoke settlement deed always presents its own challenges. Firstly, you have very little to start with, so have a large amount of provisions to consider. Secondly, the clauses needed are often substantially different from a classic trust which a HNWI would use to, say, mitigate against tax or protect assets for the next generation.
It is important to think carefully about tax legislation and the impact this will have on the settlement, and how the provisions of the various life assurance policies will interact with the drafting.
Crucially, it is important not to lose sight of the ultimate aim of the client, amongst the different layers of complexity. The settlement deed must be effective, but also must be simple enough to be understood and workable on a daily basis.
Can you share your experience when advising a charity with turnover in excess of £5m in relation to amendments to its constitution and governance issues? Why is this a case you are proud of?
I enjoy acting for charities as clients of the firm as the work is diverse and rewarding. This particular matter involved a full review and update of a charity’s constitutional documents, bringing them up to date and improving them in line with the charity’s evolving aims and work. It gave us the chance to really strengthen the client relationship and consider in detail our client’s work and internal structures. It is always satisfying to complete an instruction such as this one, assisting any client, but particularly those which do such important work in the community.
Joe Cobb
Associate
Addleshaw Goddard LLP
+44 (0)7540 558114
+44 (0)161 934 6060
http://www.addleshawgoddard.com
Joe Cobb is an Associate in the Private Capital team at Addleshaw Goddard, splitting his time predominantly across the Manchester and Leeds offices. He works with ultra and high-net-worth individuals advising on Wills, succession planning, tax mitigation and the taxation and administration of trusts and estates, together with charity law and probate issues, both contentious and non-contentious. Having trained with the firm, he qualified in 2011 and has extensive experience working with a variety of clients
Addleshaw Goddard has one of the UK’s most significant private client groups, with trusted advisers guiding ultra and high-net-worth individuals, trustees, corporate entities, family offices, trust companies and charities. The team provides bespoke services and solutions on both a national and international scale, with a client base including entrepreneurs, business executives, land owners and trustees. In the Chambers legal directory, a source describes the team as “extremely technical and able…to express complex advice with simplicity and clarity”.
