Month: August 2019

Spanish: El Uso de Fundaciones Educacionales Nevis Para Proteger La Identidad de Los Miembros Jóvenes de Una Familia

Posted on | by Charlotte Clabon

Bienes valiosos

A menudo, nos preguntan cuáles son nuestros bienes más importantes. Esto suele conducir a un sinnúmero de respuestas, la más común es “nuestros jóvenes”.

Con frecuencia, muchas familias gastan fortunas en la protección, la educación y la crianza de sus hijos para que se abran su propio camino al mundo. Sin embargo, existen muchos países en los cuales la protección del nombre familiar y la identidad de sus miembros son de suma importancia.

Los jóvenes abren sus alas

En la vida de cada joven, llega un momento en el que deben abandonar la protección de su familia y deben salir al mundo exterior por motivos educacionales o profesionales. A menudo, esto significa que un hijo adulto se muda a una ciudad más grande o a otro país, lejos de la seguridad y protección de su familia.

Esta reubicación suele conducir a un aumento natural de exposición, tanto del nombre del joven como el de su familia, en esta nueva ciudad.

Muchas familias quieren ayudar a sus hijos económicamente en este nuevo paso, pero algunas veces esto puede causar muchas dificultades e inconvenientes. Por ejemplo, si la familia quiere abrir una cuenta bancaria en una jurisdicción extranjera, suele ser costoso y difícil y puede causar una mayor exposición del nombre familiar.

El uso de Fundaciones Educacionales Nevis

Por medio de una Fundación Educacional Nevis, Dixcart puede asistir a la familia al disminuir la exposición, tanto como sea posible, de la identidad del joven y del nombre familiar en la nueva ciudad/país.

Dixcart puede establecer una estructura que proporcionará confidencialidad y seguridad para el joven y su familia.  Esta estructura permitirá que se reduzca considerablemente la huella de la identidad del menor en la nueva ciudad. También permitirá que miembros jóvenes adicionales reciban asesoramiento en los años venideros, dentro de la misma estructura.

¿Cómo funciona la Fundación Educacional Nevis?

La fundación Educacional Nevis tendría la capacidad de firmar contratos de residencia u otros compromisos legales importantes, tales como el pago de tasas universitarias, la adquisición de un automóvil, etc. De esta forma, tanto los contratos como los pagos se realizarán confidencialmente y sin la exposición del nombre familiar.

Una tarjeta de crédito de pago previo confidencial

La Fundación Nevis puede mantener una cuenta bancaria y una cuenta de tarjeta de crédito confidencial en varias divisas. La fundación puede pagar directamente de su cuenta bancaria los gastos de estudios y alojamiento. Los gastos diarios pueden pagarse mediante la tarjeta de crédito confidencial.

Para mantener la confidencialidad, la tarjeta no muestra el nombre del titular, la fundación o el banco. De esta manera, la familia puede reducir considerablemente el perfil público al que estará expuesta la persona joven. 

Administración de la Cuenta de Crédito

Los administradores de la Fundación también tendrán acceso en tiempo real a la cuenta de crédito. Serán capaces de monitorizar los gastos, que incluirá los datos específicos con respecto al lugar y a la persona/organización que recibe el pago, y  de modificar los niveles de fondos destinados para cada cuenta.

Actualmente, las tarjetas de pago previo operan en cinco divisas y se podrá emitir tarjetas nuevas para miembros jóvenes adicionales en los subsiguientes.

Diligencia debida

El cumplimiento de requisitos es un factor muy importante y cada familia deberá proporcionar información exhaustiva de sus antecedentes y la diligencia debida. Esto incluirá la fuente de financiación e información del patrimonio en detalle. El agente registrado, como Dixcart, el banco y la empresa de la tarjeta de crédito cumplirán con las Normas comunes de Información (CRS) y la Ley de Cumplimiento Tributario de Cuentas Extranjeras (FATCA) en su totalidad.

Información adicional

Si necesita más información con respecto a las Fundaciones Educacionales Nevis, incluida las ventajas con respecto a la confidencialidad que ofrecen, póngase en contacto con John Mellor en: advice.nevis@dixcart.com.

Family Office Management: Location, Organisation and Liaison

Posted on | by Charlotte Clabon

Recent Changes

Recent changes in terms of global tax regulations and increasing international tax transparency are vital to consider when implementing strategies to preserve family wealth and family business ownership structures.

New global regulations include: Common Reporting Standard (‘CRS’), the US Foreign Accounting Tax Compliance Act (‘FATCA’), and several jurisdictions now operate ultimate beneficial ownership registers.

Dixcart Expertise in Relation to Wealth Structures

Dixcart are very familiar with the issues facing families in an ever-changing international world and we have extensive experience in supplying trustee services in a number of jurisdictions.

We also provide advice in terms of the location of family offices, their members and businesses, as well as offering management and coordination for family offices, and liaison across the family members.

Location

It is very important to consider where each of the relevant family members are resident and also where they are tax resident.

Structuring options also need to be considered and/or reviewed. The use and location of holding companies and/or family wealth protection vehicles such as; family investment companies, foundations, trusts needs to be planned carefully.

International investment structures need to be evaluated, including the holding of real estate, from a tax and asset protection perspective, in particular in relation to ‘BEPS’ (Base Erosion and Profit Shifting).

Organisation

Key areas that need to be organised to ensure that a Family Office runs as efficiently as possible and achieves its objectives include:

Confidentiality Management

A procedure needs to be developed to deal with relevant confidential information requests from financial institutions and third parties.

Contingency Planning

Rules and procedures should be in place to protect the family business in the case of unexpected events:

  • Policies and procedures to underwrite business continuity.
  • Use of appropriate legal structures to provide as much asset and wealth protection as possible.
  • Consideration of ‘citizenship by investment’ programmes in reputable jurisdictions, to provide options for the tax residence of family members to be diversified.

Family Governance

  • Successors need to be identified and their role discussed with them.
  • The development of open communication amongst family members regarding decision making strategies and processes.
  • A ‘Family Constitution’ is a useful way to formalise family governance and to prevent potential future conflict.
  • Creation or identification of education and training programmes, to groom the next generation.

Family Office Advisory Services

  • The segregation of the family’s wealth from the family business(es), should be considered.
  • Development of a strategy regarding use of the profits arising from the family business and investments, that are not going to be re-invested.
  • Creation of a team to manage the wealth.

Succession and Inheritance Planning

  • Establishment and/or review of policies and procedures to ensure the adequate preservation and transfer of wealth to the next generation.
  • A review of the ownership structure of each family business and other relevant assets.
  • Understand how relevant local laws would apply, in relation to inheritance (for example; Civil Law, Sharia Rules etc.).
  • Putting in place the most appropriate legal structures such as wills or other legal vehicles to pass wealth to the next generation.

Liaison

Time must to be taken, by those managing the Family Office, to establish and develop close relationships with the relevant family and with other professionals advising them. Dixcart believe this relationship is critical.

As well as providing technical expertise in terms of structuring, professionals at Dixcart also understand family dynamics and frequently assist in offering advice as to how to improve communication and how to avoid potential conflict.

Additional Information

If you would like further information regarding a well-considered and comprehensive approach towards succession planning, please speak to your usual Dixcart contact or to a member of the professional team at the Dixcart office in the UK: advice.uk@dixcart.com.

Please also visit our Family Office page.

The Use of Nevis Educations Foundations to Protect Junior Members of a Family

Posted on | by Charlotte Clabon

Valuable Assets

We are often asked, what are our most important assets?  This can lead to a myriad of responses, with the most common being, “our children”.

Families often spend fortunes, protecting, educating and nurturing their children, to allow them to make their own way in the world.  Alarmingly, there are a number of countries, where the protection of a family’s name and the identity of its members is of utmost importance.

Children Spreading Their Wings

There comes a point in each child’s life when they must leave the protection of the family and enter the wider world for educational or career purposes.  This will often mean that a late teen or adult child will move to a larger city or different country, away from the security and protection of their family.

This relocation, will often lead to a natural increase in the exposure of both the child’s name and the family name in the new city.

Many families want to financially assist their children in making the move, but sometimes it can be difficult and inconvenient to do so.  For example, if the family wants to open a bank account in the foreign jurisdiction, it can often be expensive and difficult to do so and can often lead to an increase in the exposure of their family name.

Use of a Nevis Educational Foundation

Through the use of a Nevis Educational Foundation, Dixcart can assist a family by reducing the exposure, as far as possible, of the identity of the child and the family’s name in the new city/country.

Dixcart can establish a structure that provides confidentially and security to the child and the family.  The structure means that the identity footprint of the child, in the new city, would be greatly reduced. It would also allow for additional children to be assisted in later years, within the same structure.

How Does a Nevis Educational Foundation Work?

A Nevis Educational Foundation may be able to enter into residential leases and/or other  significant legal commitments, such as the payment of university fees, the purchase of a car etc.  In this way, both the agreements and the payments would be confidential and would not feature the family name.

A Confidential Pre-paid Credit Card

The Nevis Foundation can maintain a bank account and a confidential credit card account in a selection of currencies.  Education and accommodation expenses can be paid by the Foundation, directly from its bank account.  Daily living expenses can be met using the confidential credit card.

In order to maintain confidentiality, the card does not feature the holder’s name, nor the name of the Foundation, nor the bank’s name. The family can therefore considerably reduce the public profile that the young person will be exposed to, outside of their purely academic environment.

Administration of the Credit Account

The managers of the Foundation would also have real time access to the credit facility account.  They would be able to monitor spending, including precisely where and to whom the spending has taken place and could amend the levels of funding to each allocated card.

These pre-paid cards currently operate in five currencies and new cards can be issued for additional children in subsequent years.

Due Diligence

Compliance is a very important factor and each family would need to provide comprehensive background information and due diligence. This would need to include full source of fund details and additional information relating to their wealth. The Registered Agent, such as Dixcart, the bank and the credit card company, will all be fully compliant with the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA).

Additional Information

If you require further information in relation to Nevis Educational Foundations, specifically the confidentiality advantages that they can offer, please contact John Mellor: advice.nevis@dixcart.com.

UK

UK Tax Considerations for Short Term Business Visitors to the UK and for Non-UK Resident Directors of UK Companies

Posted on | by Charlotte Clabon

Background

When individuals not resident in the UK are short term business visitors to the UK and/or are directors of UK companies, the individual’s UK tax position needs to be considered carefully. UK tax may be due, but there are a number of options that might reduce or negate the UK tax payable.

Short Term Business Visitors

Short-term business visitors are individuals who are not resident in the UK but undertake visits to the UK on business, to work for a UK company. The UK company is treated as the individual’s employer and must deduct tax under PAYE in the usual way. This applies even when the overseas company continues to pay the individual.

Individuals will usually be taxed on their worldwide income in their country of residence. This means that the same income might be taxed twice. In such circumstances, the individual would need to make a claim for double tax relief.

Short-Term Business Visitor Agreements

HMRC allows companies to enter into a Short Term Business Visitor Agreement (“STBVA”) which removes the requirement to operate PAYE. The individual will not, therefore, be taxed on UK income and will not need to make a claim for double tax relief. The criteria for eligibility for a STBVA are as follows:

  1. the individual must be resident in a country with which the UK has a relevant Double Taxation Agreement;
  2. the individual must be working for a UK company or a UK branch of an overseas company, but remain an employee of an overseas company;
  3. the individual is expected to stay in the UK 183 days or fewer in any 12 month period;
  4. The UK company must not ultimately bear the cost of the employment. Even if an individual is legally employed by a UK company, they must be economically employed by an overseas company.

Individuals visiting from overseas branches of a UK company will not be eligible for a STBVA as HMRC considers an overseas branch to be part of the UK company and therefore the final criteria 4, above, is not met.

Under some circumstances an individual can still be eligible for the agreement where their remuneration is recharged to the UK host company (see criteria 4 above), provided that the employee’s visits to the UK total fewer than 60 days in any single tax year. The employer would need a sufficiently accurate recording mechanism to validate that the 60 day rule has been met.

Reporting requirements vary substantially, depending on the number of days spent in the UK. Where reports must be made, these are due by 31 May following the tax year end of 5 April. Directors are not eligible for STBVAs.

PAYE Special Arrangements

PAYE ‘special arrangements’ deal with situations where a STBVA is not available because an individual is visiting from an overseas branch, or from a country with which the UK does not have a double tax treaty, such as Brazil.

  • In the situation where a host employer has adopted ‘special arrangements’, PAYE can be calculated annually, as long as the individual has not worked more than 30 work days in any one tax year.
  • This eases the administrative burden and means that, where personal allowances are due, there may be no tax to pay. Certain incidental duties can be excluded from the calculation of work days.

The employer has responsibility to assess when a day counts as a work day, when travel to or from the UK has taken place on that day.

The filing deadline is 19 April following the end of the tax year, and any tax due must be paid by 22 April following the end of the tax year.

Directors are not eligible for PAYE ‘special arrangements’.

National Insurance Contributions

UK National Insurance contributions need to be considered separately from tax arrangements.

  • There is, however, a 52 week exemption from UK National Insurance contributions.

This means that National Insurance does not usually need to be considered until after 52 weeks of continuous residency. There are separate EU rules which apply in some circumstances. Please contact Dixcart for further information on this.

Non-UK Resident Directors of UK Companies

A non-UK resident director of a UK company is an office holder and therefore his or her earnings, in respect of their UK role, are subject to UK tax.

If the individual is not remunerated for the UK directorship there should be no tax to pay, although HMRC may argue that a proportion of the director’s total remuneration should be allocated to the UK director role. It is therefore helpful if the director’s employment contract sets out whether any remuneration is attributable to the UK directorship, to reduce the risk of HMRC seeking to allocate a portion of the overall remuneration to the UK role.

Self-Assessment Tax Returns

Non-UK resident directors fall within the UK self-assessment scheme for income tax. If HMRC issues a tax return, it must be completed and filed by 31 January, following the relevant tax year end of 5 April.

If HMRC does not issue a tax return, but UK tax is due, the individual must notify HMRC that they are within the criteria for filing a return. If they do not, penalties and interest will apply.

If a return is filed, but no tax is due, HMRC will not subsequently require a return every year, but will periodically check whether one is due.

Accommodation and Travel Expenses

As the individual is the director of a UK company, the UK will be treated as the regular place of work, and accommodation and travel expenses paid by the company are therefore taxable. There are some exceptions to this rule, in tightly defined circumstances.

Reporting

If an employer books and pays for the travel or accommodation, the costs are reported on the employee’s P11D form. If the individual incurs the cost and is then reimbursed, the costs are treated as earnings, and PAYE must be applied.  It may be possible to include these costs in a PAYE Settlement Agreement, to remove the reporting requirement and to allow the employer to directly pay the tax liability.

National Insurance Contributions (“NICs”) for Directors

The NICs position will vary, depending on factors such as the home country of the director, whether that country is in the EEA and whether the country has a social security agreement with the UK.

Where appropriate criteria are met, the director may be exempt from NICs in the UK.

How Can Dixcart Help?

Dixcart can review the status and particular circumstances of short term business visitors to the UK, and non-UK resident directors of UK companies. Dixcart can then assist in determining if individuals are required to pay income tax and, if they are, the most cost efficient manner in which to do so, whilst ensuring that all obligations are met.

Dixcart can assist in determining tax and NIC obligations in respect of both employees and directors working internationally. We can assist with making a STBVA application to HMRC and advise on monitoring systems to ensure that employees’ travel is properly recorded.  We can also assist in approaching HMRC in respect of earlier years where compliance requirements may not have been met.

Dixcart can advise on the tax and NIC obligations of non-UK resident directors of UK companies and can prepare and file self-assessment tax returns and P11D forms where required.

Please speak to your usual Dixcart contact or to professionals in the Dixcart office in the UK: advice.uk@dixcart.com.