United Kingdom

Inheritance Tax (IHT), also known as estate tax in the UK, is a tax on the estate of someone who has passed away. The standard IHT rate is 40% on the portion of an estate exceeding £325,000. Certain assets and gifts are exempt from IHT, and there are reliefs available to reduce the taxable value of qualifying assets.

Gifts made within seven years before death may still be subject to IHT, and some gifts made during a person’s lifetime may also be subject to IHT. IHT is paid by the estate before the assets are distributed to the beneficiaries, and there are various strategies to mitigate IHT. It’s important to stay updated with the latest IHT rules and seek professional advice to ensure compliance with tax laws.

Family offices are also subject to CGT on relevant transactions. The standard rate of CGT for individuals is 20% for most assets and 10% for gains that qualify for Entrepreneurs’ Relief. The Annual Exempt Amount (AEA) for the 2023/24 tax year is £12,300.

CGT is generally due in the tax year that the gain is made, and there are various reliefs and allowances available to reduce the amount of CGT payable. CGT is reported and paid as part of the self-assessment tax return process, and it’s important to keep accurate records of all transactions and gains to ensure compliance with tax laws.

Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) offer tax incentives for investing in qualifying early-stage and growth-focused businesses. Family offices can benefit from income tax relief, capital gains tax exemption, and other reliefs when investing in eligible companies.

Venture Capital Trusts (VCTs) are investment vehicles listed on the London Stock Exchange that invest in small and medium-sized enterprises (SMEs). Investing in VCTs can provide income tax relief of up to 30% on investments, as well as exemptions from tax on dividends and capital gains.

Infrastructure Investment: The UK offers various incentives and schemes to encourage investment in infrastructure projects, such as renewable energy, transportation, and housing. Family offices investing in these projects can benefit from stable returns and potential tax incentives.

An SFO is a private company established to manage the wealth and affairs of a single wealthy family. It provides tailored financial and investment services, including wealth management, tax planning, and philanthropic activities. SFOs offer complete control and customisation but can be costly to set up and maintain.

An MFO serves multiple wealthy families, pooling their resources to achieve economies of scale. MFOs offer a range of services similar to SFOs but are shared among several families. This structure can provide cost savings and access to specialised expertise.

A PTC is a private company established to act as a trustee for one or more family trusts. It allows families to retain control over their trust structures while benefiting from the flexibility and confidentiality of a corporate trustee. PTCs are often used by families with complex trust arrangements.

An FIC is a private limited company established to hold and manage family assets, such as investments, property, and businesses. It offers tax advantages, asset protection, and flexibility in wealth transfer. FICs are governed by company law and can be customized to meet the family’s needs.

An LLP is a partnership where the partners have limited liability, meaning they are not personally liable for the debts of the partnership. LLPs are often used for professional services and can be structured to accommodate multiple family members or external investors.

The UK has a diversified and resilient economy, with a strong financial services sector, advanced manufacturing industries, and a thriving technology sector. This stability provides a favourable environment for wealth creation and investment growth, which can benefit family offices seeking to preserve and grow their wealth over the long term.

The UK has a stable political system with a long history of respecting property rights and the rule of law. This stability provides a secure environment for family offices to conduct their business activities, make long-term investment decisions, and plan for the future with confidence.

As a leading financial centre, London provides family offices with access to global markets and investment opportunities. The UK’s membership in the Commonwealth and its strong ties to Europe and the rest of the world further enhance its position as a hub for international business and investment.

Overall, the UK’s stable economic and political climate, coupled with its business-friendly environment and access to global markets, make it an attractive location for family offices seeking to preserve and grow their wealth over the long term.

The UK is a global financial hub, offering a wide range of financial services tailored to family offices, including wealth management, investment banking, and fund administration. London’s financial district, known as the City, is home to many leading financial institutions and service providers.

The UK has a well-established legal and tax framework, with a wealth of expertise in areas such as trust law, estate planning, and tax optimisation. Family offices can access top-tier legal and tax advisors to help navigate complex regulatory and compliance requirements.

The UK has policies to attract wealthy people and their businesses to the country to help boost the economy. There are two types of visas available for high-net-worth individuals and entrepreneurs:

Tier 1 Investor Visa: The Tier 1 Investor Visa requires a minimum investment of £2 million in UK government bonds, share capital, or loan capital in active and trading UK-registered companies.

Tier 1 Entrepreneur Visa: The Tier 1 Entrepreneur Visa, which has been replaced by the Innovator Visa, requires a minimum investment of £200,000 in a UK business and creates jobs for settled workers.

Family members of visa holders may also be eligible to join them in the UK. After a certain period of residence in the UK, individuals may be able to apply for British citizenship, which grants full rights and privileges as British citizens. These policies aim to attract wealthy individuals and entrepreneurs to the UK, contributing to its growth and development.

The UK is known for its diverse culture, with a rich history of arts, music, literature, and cuisine. Family offices and their members can enjoy a wide range of cultural experiences, from visiting world-class museums and galleries to attending music festivals and theatrical performances.

The UK offers a high quality of life, with access to excellent healthcare, education, and public services. Family offices can benefit from a safe and stable environment, with well-maintained infrastructure and a clean and green living environment.

The UK is home to some of the world’s leading educational institutions, including prestigious universities such as Oxford, Cambridge, and Imperial College London. Families with children can access quality education, both at the school and university levels.

The UK has a comprehensive healthcare system, the National Health Service (NHS), which provides access to healthcare services that are free at the point of use. Private healthcare options are also available for those who prefer additional services.

The UK offers a variety of travel and leisure options, from exploring picturesque countryside and historic landmarks to enjoying vibrant city life and seaside resorts. The country’s well-connected transport network makes it easy to travel within the UK and to other European destinations.