Helping a Successful Entrepreneur Transition His Wealth into a Diversified, Long-Term Portfolio

Our client is a UK resident, non-UK domiciled entrepreneur. We worked with him over a number of years to reduce his exposure to a listed company and build a long-term, diversified portfolio. We tailored our strategy to take into account his tax status.

Background

Our client, 46, is a technology entrepreneur. He and his wife have been resident in London for the past 7 years and have two young children who were born and attend school in the UK. They are Australian citizens, deemed “non-domiciled” UK residents for tax purposes.

Following the sale of a business several years ago, the client has a shareholding of over £5 million in a UK-listed company. He now invests in and advises early-stage technology companies. The couple own a house, mortgage-free, in London. Other assets, including pensions and taxable savings and investments, are worth circa £1 million.

Client Need

The client was increasingly concerned that so much of his family’s wealth was tied up in a business over which he had no control. He was looking to reduce his shareholding in order to fund new technology investments while also building a diversified, long-term investment portfolio to provide income in later life.

He intended to retain his UK residency status for the foreseeable future and wanted to ensure that his investments were held in the most tax-efficient manner.

Our Solution

We developed a strategy to reduce the client’s exposure to the listed business, taking into account available tax reliefs and likely capital gains tax liabilities. We arranged for the transfer of the client’s shareholding into our custody in order to execute the strategy in a market-sensitive fashion.

Approximately half of the disposal proceeds were invested in a long-term growth portfolio comprising direct equities and collective investment funds. We also transitioned existing savings and investments, including pensions, into the new investment strategy.

We worked closely with tax advisors in both Australia and the UK to ensure that the client’s assets were structured to:

• Ensure tax efficiency
• Keep costs down
• Respect investment restrictions

The portfolio was held in custody with our Channel Islands’ subsidiary, allowing the client to protect the tax and planning flexibility of his “non-dom” status.