ESTATE PLANNING & INTERNATIONAL INVESTMENT STRUCTURES
For South African Citizens
There are currently roughly 70,000 amnestied trusts belonging to South African citizens, collectively amounting to R80-billion in offshore wealth. The majority of these trusts were established before amnesty. While a number of these structures still exist, they are outdated, overpriced and convoluted, some written under out-of-date discretionary trust deeds where full estimating provisions apply.
ESTATE PLANNING & INTERNATIONAL INVESTMENT STRUCTURES
When you immigrate, different legislation applies to your new country of residence. We help you understand these laws and how they may affect you. We maximise current legislation to ensure you receive the most beneficial tax position.
MANAGEMENT OF YOUR INTERNATIONAL STRUCTURE
At Charles Winshaw, our mission is to save you money. We alleviate the costs of trustee duties by collaborating with an international network of financial professionals, while assisting in all aspects of financial administration and management.
OFFSHORE RETIREMENT STRUCTURES
Thanks to renewed investment structures, implemented to create alternative wealth management solutions for local residents, South Africans now have the opportunity to invest their capital in consistent international markets, by taking advantage of their R10-million annual allowance. Residents can also use these structures as a way to combine existing international assets with greater benefits. These include:
- No tax on capital gains within the structure.
- No tax on income accumulated within the structure.
- No estate duty or prolonged probate.
- As stipulated by a ‘Letter of Wishes’, assets can be transferred to beneficiaries.
- Gift or Donations tax on sums deposited into the trust is mitigated.
Since 2001, South African residents have been liable for tax on their international income.
For example, if an international discretionary trust receives income or capital gains from anywhere other than South Africa, and the funds are entrusted to a South African beneficiary, that beneficiary is liable to pay tax. Gift and donations tax are also payable when donated to a discretionary trust.
A retirement trust, however, is different – by investing in a retirement plan, clients receive tax reprieves on international contributions, a significant benefit for South Africans investing offshore.
QROPS (Qualifying Recognised Overseas Pension Scheme)
On April 6 2006, new regulations for UK pensions were implemented; essentially creating an attractive investment alternative for UK expats transferring their capital into offshore plans.
Recognised schemes such as a QROPS subsequently became available to non-UK residents. A QROPS is an international pension scheme which has met the stringent criteria and is officially recognised by the HMRC.
Benefits of a QROPS:
100% Death Benefit
In the UK, pensions can be completely lost – or severely reduced – upon the passing of the member. Money Purchase schemes, however, are typically only taxed at a marginal rate.
Defined Benefit Schemes, depending on the scheme rules, can also be lost completely in the event of your death. Under a QROPS, however, your pension will be passed on in full to your beneficiaries, according to your wishes.
When it comes to a QROPS, you are under no obligation to purchase an annuity at any time, giving you heightened financial flexibility. When drawing down your pension from a QROPS, a larger income will generally be made available to you, compared to UK-regulated schemes.
No liability for UK Tax on Pension Income
Income derived from a UK-based pension could be subject to taxation. Transferring your pension into an appropriate QROPS, could ensure that all benefits are paid without tax deductions to your beneficiaries.
You have freedom to place your funds into any QROPS-recognised offshore jurisdiction, ensuring maximum tax savings.
Depending on the size of your pension, ‘open architecture’ is applicable to your underlying investment portfolio.
The professionals at Charles Winshaw (Pty) Ltd can construct a bespoke portfolio, allowing you greater investment freedoms. Such a portfolio may include information on capital preservation, growth strategies as well as individual investment particulars like age, time horizon, tax position and risk profile. Our access to a range of global financial institutions makes it easier for us to protect your retirement income and ensure that you, your family, and your legacy, are taken care of.
Under UK pension schemes hidden charges often apply, masking the overall costs of the investment. When your pension is held within a QROPS, however, you can be sure of complete cost transparency, giving you piece of mind and confidence in your financial infrastructure.
QNUPS (Qualifying Non-UK Pension Scheme)
In 2010, the British Government announced that specific overseas pension schemes would be exempt from UK inheritance tax. This revised legislation consequently allows beneficiaries to build inheritance tax savings into their retirement planning.
QNUPS are available to individuals who are either residents of the United Kingdom, or residents elsewhere, but remain ‘UK Domiciled’.
The primary benefit of a QNUPS is that members can pass on their assets in full to their beneficiaries.
Other Benefits include:
- Exemption from UK inheritance tax.
- Absence of lifetime limits.
- No maximum age at which contributions can be made.
- Access to benefits from a younger age.
- QNUP contributions can be made from earnings outside of employment.
- Almost all asset contributions to a pension are accepted, including unique assets like boats, aircraft, antiques and valuable collectibles.
Typically, one can’t access their investment before the age of 55; a QNUPS, however, allows the possibility of loaning against the scheme before the set age. Depending on the rules of your QNUPS, you may also be allowed earlier lump-sum withdrawals.
**Both QROPS and QNUPS are international pension schemes which have met the stringent criteria set by the HMRC. In order to qualify, the schemes must be established overseas but needn’t be in jurisdictions who have signed Double Taxation agreements with the United Kingdom**
Bespoke Succession Planning
Why leave your hard earned wealth to governments by way of death tax or estate duty?
We cater to clients the world over, from all walks of life. Often, whilst being resident in Africa, assets are still held in foreign countries and in your personal capacity. This may result in a costly and convoluted probate, often a lengthy process, ultimately delaying your beneficiary’s entitlements.
For UK expatriates, meanwhile, assets or pensions held outside their country of residence could be taxed by as much as 40% upon death, with an additional probate fee of up to 5% in each separate jurisdiction the assets reside. Charles Winshaw limits the impact of taxation legislation by mitigating probate and death tax, whilst additionally ensuring that the entirety of the estate is bequeathed to your beneficiaries.
EVENTS / COMMUNITY
Charles Winshaw (Pty) Ltd proudly supports the Chase Winshaw Trust, an organisation dedicated to raising awareness of Cerebral Palsy, and raising funds in favour of research and treatment for children living with the disability.
Charles Winshaw (Pty) Ltd proudly supports local Cape charity, Izubusiso (House of Many Blessings) – Izibusiso.