Skandia IHT warning for clients with overseas assets

The global head of banking distribution for Skandia said a major drive by HMRC to make hundreds of millions of pounds of overseas assets regularised for IHT purposes, and subsequently visible to UK authorities, would increase the need for specialist advice.

Once assets became regularised, clients will need to start reporting on the assets every year through their tax return.

Mr Lawless said advising clients on restructuring their overseas assets into vehicles, such as offshore bond wrappers, could help mitigate or reduce their tax and reporting burden, potentially saving thousands of pounds.

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The next consideration would be to mitigate any tax exposure for the client’s beneficiaries, as many people believe that money held offshore will not fall into the UK IHT net.

Mr Lawless added: “Clients with assets held offshore are typically wealthy clients with significant sums to invest. These clients are in greatest need of wealth planning, especially when they take the necessary steps to regularise their assets.”

Adviser View

Geraint Davies, managing director of Surrey-based financial planner Montfort International, said: “There are opportunities for advisers but there could be consequences from UK tax mitigation in the country that the client currently lives in.

“We always run a domiciliary check in the first instance and work from there. You can’t give competent advice until all the facts are on the table.”