Transferring an extensive investment portfolio, tax efficiently
High net worth individual
A Moscow based matriarch with a substantial investment portfolio (owned by a non-Russian company) engaged us to advise on how the portfolio could be transferred in a tax efficient manner to her children, who were resident in the UK.
- Our planning took into account the relevant Russian anti-avoidance provisions and utilised the often overlooked, but extremely beneficial tax treatment of common-law trusts for Russian clients.
- We proposed that the matriarch dispose of her shares in the non-Russian investment company by way of gift to a common law trust established on the Isle of Man. The trustees of the trust would be the matriarch’s children and any future progeny.
- This restructuring step was achieved in a tax free manner and ensured that any future income and gains would only be liable to Russian tax to the extent the matriarch took a benefit from the trust.
- Due to the current scope and application of the UK non-domicile rules, the matriarch’s children could subsequently benefit from the assets (provided they have elected to be taxable under the remittance basis and the assets is not brought to the UK) without being subject to UK taxation.