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Tax and Jurisdictions

The Swiss government announced yesterday it would seize UBS banking records rather than allow the US government to access the identities of 52,000 American UBS account holders, who include wealthy families.

On 17 February, the American Recovery and Reinvestment Tax Act of 2009 was signed into law. The Act included $300 billion in tax relief so if you own a business in the US or invest in a business in the US, it’s important to understand these changes and capitalise on them now.

One of the best ways to reduce inheritance tax (IHT) on your death is to give away assets during your lifetime. The problem is, a gift can trigger a large capital gains tax (CGT) bill if the asset has gone up in value during your period of ownership. That has always been a big disincentive to lifetime giving.

Much talk in the past few months has been focused on which jurisdictions are the most family office friendly. Whilst Switzerland, Monaco and London seem obvious choices when establishing a family office within Europe, we found that the Isle of Man, a self governing British Crown dependency, suited our purposes and is now making concerted and successful efforts to compete in this market.

Last week’s UK budget has been widely seen as a political budget designed to set the parameters for the country’s general election, due next year. Chancellor Alistair Darling’s headline-grabbing increase in interest rates for the wealthy (the top rate is now 50%) was certainly a knee-jerk reaction to political rather than economic problems.