Self-Sponsorship route for HNWIs – An exciting opportunity to be a UK resident with personal and financial benefits. A major advantage of living in the UK is that you can devise robust legacy and estate planning to ensure family assets are secure for the generations to come. The UK has always been a favorite among the rich for the reason that the laws on succession planning there are robust. Here’s what you can do with the self-sponsorship immigration pathway to secure the future and your wallet in this article.
How the Self-Sponsorship Trail Saves Wealth for Generations to Come.
Self-Sponsorship: This route enables HNWIs and UHNWIs (ultra-high-worth individuals) to apply for UK residency without an expensive financial commitment or sponsorship from third parties. In the UK, once you are there, you can consult with advisors, tax specialists, and solicitors to establish long-term planning to keep your family’s wealth. The estate planning options you have are:
- Setting up an estate plan or succession plan.
- Entering into a prenuptial agreement.
- Planning to pay inheritance tax (eg, lifetime gifts, exempts, trusts, life insurance).
- Making tax-efficient investments.
- Setting up a Family Office.
- Establishing a limited liability company.
- Establishing a Qualifying Non-UK Pension Scheme (QNUPS).
- Creating trusts.
- Writing a Will.
Estate Planning For HNWIs: Trusts, Wills, and Family Offices Complete Estate Planning For HNWIs
Plan your estate in such a way that your money stays safe, gets passed on to future generations, and will flow out of your hands efficiently. These are some of the elements of HNWI estate planning:
Trusts
Trusts are one of the foundational estate planning assets. You can transfer assets into a trust and they will then be administered by a trustee to benefit your beneficiaries. Trusts can be extremely flexible and regulated in distributing wealth and can keep wealth safe from such things as creditors, divorce decrees, or family disputes. The establishment of a trust can also be tax-efficient in the UK. Things placed in a trust might not be subject to inheritance tax as when they are left directly to the heirs.
Wills
Another estate plan component is a thoughtfully drafted Will. A Will sets out what your property will be and, if any, how it is to be dealt with when you die, and a Will can avoid inheritance tax on your estate. For HNWIs with multi-national assets, make sure your Will is up to date and in line with UK and international tax rules. A family law lawyer can advise you on the updates to your Will and how you want it to reflect that.
Family Offices
Family Office: A Family Office is a private financial and legal service that can be hired to assist wealthy families. A family office usually offers advice to their clients about taxes, investments, estate planning, and giving. An office of the family can also make sure that wealth is appropriately protected and left to those with whom it’s inherited.
Giving Something to Live On Charitable Foundations.
Creating a charitable foundation in the UK is a great way for HNWIs to help the community at the same time as getting a discount on taxes. Fundraising foundations can be a wealth transfer mechanism too where you can hand off your money to others and feel fulfilled yourself. Donations to a foundation:
- Don’t leave an overly large estate for inheritance tax.
- Provide tax relief.
- Ensure you keep control of how money goes, so your legacy is as close to you as possible.
- Do well, if not only in the UK, where charity is revered.
- Between 2012 and 2022, HNW families amounted to around 170 charities – evidence that philanthropy is increasingly important in wealth planning.
Strategies for UK Wealth Management to Ensure Family Successes.
It’s part of wealth management, for HNWIs, to diversify across asset classes. You do so by taking away risk and making sure that you get long-term returns, even if certain markets dip.
Not only investments but also thinking about the next generation. This can be a family office to help mentor and train the next generation on how to handle the family fortune.
Asset protection should also be taken into account for HNWIs to protect assets against external risks such as economic recession, legal trouble or political turmoil. Assets can be protected with trusts and other legal arrangements and investing in secure places can be even more secure.
HNWI Tax Planning in the UK: Keeping Taxes Off Your Back Reducing Tax Obligations
Tax efficiency is another of the UK’s main concerns for HNWIs and it’s especially concerning for inheritance tax which is currently 40% of any estate over the tax-free threshold. Tax liability can be reduced with some planning. A few tactics that you can think about are:
- Giving during life: You can pass a portion of your wealth throughout your life tax-free. Gifts to your children who were over seven years old at the time of your death, for instance, are not subject to inheritance tax.
- Trusts: Trusts are a good way to keep money safe and avoid taxes.
- Tax-efficient investments: HNWIs can participate in Enterprise Investment Schemes (EIS) or Venture Capital Trusts (VCTs) that are tax-exempt.
The Self-Sponsorship route if you’re thinking of taking up residence in the UK is a great place to develop estate and legacy plans. Planning is best accomplished with people who know your specific scenario and can help create plans for you that work for you.
Our team at Law and Visas is dedicated to advising HNWIs and UHNWIs on UK immigration law so you can obtain UK residency and establish the financial and estate plans that will preserve your wealth for generations.
