Private capital fund managers, particularly in VC, often operate within a lean model which affords them dynamism and agility in pursuit of exceptional investment return. However, this can present challenges as they scale-up and grow.
It demands a strategic operational approach which will generally require taking a partnership approach with a third-party fund administrator to streamline processes and maintain robust control and oversight. Effective collaboration with fund administrators supports fund managers to focus on value creation, ensuring seamless deal execution, reporting, and compliance while avoiding operational bottlenecks.
This article aims to provide actionable insights for fund managers to effectively navigate the scale-up pathway and achieve growth without proportional cost expansion.
Integrate, don’t replicate
A streamlined relationship with your fund administrator can be transformative. This partnership hinges on integrating processes and responsibilities rather than duplicating efforts, ensuring efficiency and clarity at every stage:
A clear deal process: Establish a robust process for your deal cycle—from due diligence, deal execution through to facility drawdown, capital call issuance and deal settlement. Ensure the full end to end deal process is clear, well-documented and accepted and well understood by both your internal deal team and your administrator.
Structured communication: Support a transparent and structured communication framework. This ensures clarity on deliverables, pipeline activities, and priorities between your team and proactively driven by your administrator.
Reliance on controls: Develop/request an in-depth understanding of the controls performed by your fund administrator. This allows you to rely on their processes rather than re-performing tasks, saving time and reducing redundancy.
Oversight and control
Scaling doesn’t mean relinquishing control. Effective oversight ensures that operational standards and strategic goals are met as your fund grows:
Key Performance Indicators (KPIs): Agree on KPIs that reflect both parties’ expectations. Fund administrators should provide proactive reporting against these metrics to ensure alignment and accountability.
Proactive Deadline Management: Administrators should proactively highlight upcoming deadlines and critical workstreams, enabling fund managers to plan, scrutinise and respond effectively.
Leverage technology
In today’s tech-driven market, fund administrators invest significantly in advanced systems and reporting platforms, aiming to deliver cutting-edge tools that enhance efficiency, accuracy, and scalability. Fund managers can unlock substantial value by maximising the potential of these investments rather than duplicating efforts or maintaining costly third-party systems.
Utilising existing tools: fund administrators have spent significant time developing and refining their technology solutions, incorporating automation, data visualization, and compliance tools designed specifically for fund management needs. By leveraging these platforms, fund managers can:
Enhance reporting: Access real-time, detailed financial and operational reports tailored to their requirements, providing transparency and insights.
Streamline operations: Automate routine tasks such as NAV calculations, investor reporting, and compliance monitoring, reducing manual effort and minimising errors.
Ensure compliance: Rely on integrated systems designed to keep pace with evolving regulatory requirements, ensuring seamless adherence to global standards.
Collaborating on custom solutions: While standard platforms address most fund manager needs, unique challenges often arise during scaling. Engaging in open dialogue with your fund administrator allows for tailored adaptations or co-developed solutions.
By leveraging the administrator’s existing infrastructure, fund managers can achieve cost-effective innovations that align with their objectives, avoiding the expense and complexity of developing systems in-house.
The Belasko advantage
At Belasko, we understand the unique challenges fund managers face when scaling up. Our partnership-driven approach offers end-to-end fund administration solutions tailored to support your optimal operating model. By integrating our services into your operations, we help fund managers achieve growth without compromising on oversight, control, or efficiency.
If you’re looking to scale up effectively, contact Nick McHardy, Head of Funds ([email protected]), to learn how Belasko can support your journey.
The UK funds industry is at a pivotal moment. Over recent years, it has faced a challenging environment shaped by economic headwinds, political shifts, and heightened regulatory scrutiny. The introduction of a new government and a president in the United States marks a time of change, where policy decisions on both sides of the Atlantic will inevitably influence the private markets landscape.
At the same time, private markets are contending with complex global challenges—from tax reforms and sustainability mandates to evolving valuation and reporting standards. These changes are poised to redefine how fund managers operate, interact with investors, and deliver returns.
As the UK seeks to maintain its position as a global hub for private capital, managers are navigating a delicate balance: responding to regulatory demands while preserving competitiveness in a rapidly evolving market. This article delves into the latest policy and regulatory developments, offering insights on their implications and how private market participants can prepare for the road ahead.
Carried interest: Changes in the UK tax landscape
The UK’s carried interest regime is set for significant change following the Autumn Budget. Rachel Reeves, under the new Labour government, outlined sweeping tax reforms aimed at addressing fiscal challenges and aligning the UK with global taxation norms. These measures mark a decisive shift in policy and are expected to have far-reaching implications for private markets.
Capital Gains Tax increase: Effective from April 6, 2025, the Capital Gains Tax (CGT) rate on carried interest will rise from 28% to 32%. This move places the UK among the highest-taxed jurisdictions for carried interest, on par with France and New York.
Shift to trading income: In a dramatic overhaul of the current framework, carried interest will be treated as trading income rather than capital gains, fundamentally changing its taxation basis.
Additional measures include the extension of Income-Based Carried Interest (IBCI) rules to employees alongside LLP members and the introduction of taxes on non-UK residents’ carry related to UK-based services, subject to double tax treaties.
These reforms, while aimed at addressing perceived inequities in the taxation of private capital, risk diminishing the UK’s competitive edge unless counterbalanced by broader incentives or strategic industry support. Private markets participants will need to act swiftly to navigate this evolving landscape and mitigate the potential disruption caused by these policy shifts.
Key tax risks in due diligence for private equity investments
Tax due diligence is a critical component of private equity transactions, ensuring compliance, mitigating risks, and preserving value throughout the investment lifecycle. Private equity managers must prioritise four key areas where tax risks often arise:
Restructuring: Many private equity investments require significant restructuring to streamline operations, improve efficiency, or position the business for growth.
Refinancing: Leveraging debt is a common strategy in private equity transactions, but refinancing activities can give rise to tax concerns. Thorough tax analysis helps structure debt efficiently while mitigating regulatory exposure.
Tax action plans: During due diligence, managers often uncover tax risks at purchase. Developing and executing a robust tax action plan ensures identified risks are addressed proactively. This safeguards the investment and builds confidence among stakeholders.
Management Incentive Plans (MIPs): MIPs are vital for aligning the interests of management teams with investors, but they also present complex tax challenges. MIPs and employee loans require extra scrutiny to ensure compliance and avoid adverse tax consequences.
Private equity owned businesses often face distinct tax challenges due to their ownership structure. Additionally, insurers may exclude certain risks from coverage, necessitating proactive strategies to address these gaps well in advance of a sale process.
By focusing on these areas and implementing robust tax governance frameworks, private equity managers can navigate risks effectively, better protecting their investments.
Unlocking UK defined contribution pension capital
Private capital structures often clash with the liquidity needs of UK defined contribution (DC) pension schemes. While government and industry are seeking solutions, hurdles remain in areas like liquidity, valuations, and the treatment of carried interest. For managers able to align with these needs, the opportunity to unlock significant capital flows is immense.
AIFMD II and UK-EU divergence
The EU’s AIFMD II introduces stricter rules, including higher regulatory capital requirements, tighter delegation standards, and limitations on non-core activities. These changes aim to enhance transparency and investor protection but may increase costs and operational burdens, particularly for smaller managers.
In contrast, the UK is charting a more flexible path, focusing on competitiveness. Proposed measures include raising the €500m small AIFM threshold and avoiding sharp increases in regulatory capital requirements. This divergence seeks to attract global fund managers by fostering innovation and reducing compliance barriers.
For fund managers operating across jurisdictions, dual compliance will add complexity, but the UK’s approach may position it as a more attractive destination for private capital, offering a competitive edge in the global market.
The FCA agenda
The FCA is intensifying its focus on how private capital managers approach asset valuations, with a live consultation concluding in Q1 2025. Independence is becoming a cornerstone of valuation practices, with portfolio monitoring teams playing a more prominent role in scrutiny alongside formal governance processes.
The FCA also emphasise speed, clarity, and certainty to build confidence in private markets. Key initiatives include expanding access to capital, fostering diversity, and enhancing data-driven regulation, particularly in ESG.
Regulatory reporting changes
ILPA’s updated quarterly reporting templates, effective January 1, 2026, aim to improve transparency, particularly around leverage and debt, providing investors with deeper insight into portfolio risks. However, feedback from the BVCA highlights that these templates may not be suitable for all investment strategies, especially those with complex structures or heavy debt exposure.
Fund managers will need to adapt their reporting processes to meet these new standards while maintaining flexibility for unique strategies. Collaborating with service providers will be key to ensuring efficient, compliant reporting that meets regulatory demands and supports investor confidence through enhanced transparency.
Retailisation of private markets
The push to retailise private markets, driven by ELTIF reforms, offers fund managers access to a vast new capital pool, particularly through defined contribution (DC) pension schemes. However, this shift comes with challenges including liquidity management and enhanced transparency in valuations.
While opening private markets to retail investors could drive significant growth, fund managers must adapt operationally to handle increased reporting, investor communication, and governance. Successfully navigating these challenges will position managers to benefit from a democratised private markets landscape for long-term growth.
Thriving amidst regulatory and market shifts
The UK’s private markets face a dual challenge: balancing regulatory demands with global competitiveness. The interplay between tax changes, evolving valuation standards, ESG mandates, and expanded reporting requirements demands a proactive approach. Managers that adapt swiftly will position themselves to thrive amidst this dynamic regulatory environment.
For tailored insights into navigating these changes, get in touch with Nick McHardy, Head of Funds ([email protected]) or Ross Youngs, CCO ([email protected]).
In today’s rapidly globalising world, entrepreneurs and wealthy families are seeking innovative solutions for scaling their businesses, optimising tax structures, and safeguarding wealth across generations. Offshore structures, when used strategically and in compliance with regulations, offer one such powerful approach. These structures, including offshore trusts, holding companies, and private foundations, can not only help entrepreneurs maximise their assets but also ensure that family wealth transcends generations.
Below, Andy Bailey, our head of private wealth, explores the benefits and considerations for using offshore structures to support entrepreneurial ambitions and protect dynastic wealth.
Asset Protection and Risk Management
The fast pace of entrepreneurial ventures often entails substantial risks, from market fluctuations to lawsuits. Offshore structures, like an offshore trust, can shield assets by holding them in a jurisdiction separate from the entrepreneur’s primary location. This can make it more difficult for creditors to access personal assets in the event of legal action, providing an essential layer of protection, helping entrepreneurs safeguard their personal wealth.
Entrepreneurship remains a primary driver for wealth creation, particularly for those reaching ultra-high-net-worth (UHNW) status. A study revealed that 75% of individuals with assets over $30 million have backgrounds in entrepreneurship[1], underscoring the importance of asset protection strategies for those with substantial, self-made wealth.
Establishing offshore holding companies allows entrepreneurs to centralise their intellectual property (IP) rights, patents, or brand assets in jurisdictions with robust legal protections, further enhancing security against market volatility and operational risks.
Tax Efficiency and Global Diversification
For entrepreneurs and families with cross-border activities, tax efficiency is crucial to achieving sustained wealth growth. Offshore structures can be invaluable tools for managing tax obligations. Jurisdictions like the Channel Islands, Cayman Islands, the British Virgin Islands, and Singapore offer tax benefits, such as low or zero corporate taxes, to companies registered within their borders. By leveraging such offshore jurisdictions, businesses can lower tax liabilities legally and redirect those funds toward growth initiatives.
Given the anticipated $84 trillion wealth transfer over the next two decades[2], HNWIs and families are increasingly seeking ways to retain more wealth across generations through structured, tax-efficient offshore vehicles. In recent years, private equity has become a favoured investment vehicle for entrepreneurs, with a significant number of new HNWIs utilising it for wealth diversification. This is especially true in emerging markets, where wealth creation through entrepreneurship has accelerated, notably in regions such as Asia and the Middle East[3].
Offshore trusts and family foundations are popular for inheritance planning, helping families avoid estate and inheritance taxes, thereby preserving a larger share of wealth for heirs. Dynastic wealth preservation benefits similarly from these structures. Offshore trusts or private family foundations can provide tax-efficient solutions for wealth transfer and inheritance planning. Many jurisdictions allow families to avoid estate taxes or inheritance taxes, ensuring that a larger share of the family fortune is passed down to heirs without significant erosion from taxes. However, it’s essential to work with tax advisors to structure these vehicles in full compliance with international regulations and reporting standards, as tax authorities worldwide are increasingly scrutinising offshore holdings.
Privacy and Confidentiality
High-net-worth (HNW) entrepreneurs and families often prioritise privacy. Offshore structures, especially trusts, foundations, and private investment companies, offer a degree of confidentiality, as they’re governed by jurisdictions with strong privacy laws. While global reporting requirements are increasing, according to the Economist Intelligence Unit, over 60% of HNW families still view jurisdictional diversification as crucial, enabling them to protect sensitive family wealth information from external scrutiny, political instability, or public exposure[4].
While financial transparency initiatives have increased global reporting requirements, some jurisdictions continue to offer robust protections that minimise public exposure of ownership and investment activities.
Privacy becomes even more significant when protecting dynastic wealth. With multiple generations and often complex familial dynamics involved, safeguarding the family’s financial footprint can help prevent external interference and unwanted scrutiny. By carefully selecting the jurisdiction, a family can benefit from an additional layer of confidentiality that helps protect family members from undue attention and potential security threats.
Flexible Wealth Succession Planning
Offshore trusts or family foundations offer substantial flexibility for entrepreneurs planning wealth transfer across generations. Offshore trusts are particularly advantageous in enabling multigenerational planning, as assets can be managed according to the trust deed, protecting the family’s financial future even if the founder passes away. This ensures that wealth is managed professionally, without relying entirely on heirs, who may not yet possess the necessary experience. Foundations, meanwhile, are often structured with specific philanthropic goals, serving both the family’s financial needs and broader societal contributions. They can distribute wealth not only to direct heirs but also to charities, educational institutions, and community organisations. Through offshore foundations, families can integrate social responsibility into their legacy, offering heirs a model of value-driven wealth management.
Mitigating Political and Economic Instability
In regions experiencing political instability or economic volatility, entrepreneurs and families with considerable wealth have to consider jurisdictional risk. Offshore structures enable diversification across countries with stable legal and economic frameworks, reducing exposure to potential government actions, currency devaluation, or restrictive capital controls. By holding assets in countries with stable governance and a favourable investment climate, families can ensure continuity and preserve wealth through periods of upheaval.
For families living in high-risk areas or those concerned with geopolitical risks, offshore structures offer a form of “wealth insurance.” With the support of offshore companies or trusts, assets remain accessible and protected in a secure, internationally respected jurisdiction.
Considerations for Using Offshore Structures
While offshore structures offer numerous benefits, it’s essential to approach them with a clear understanding of compliance requirements, transparency initiatives, and potential risks. International bodies, including the OECD and the Financial Action Task Force (FATF), have introduced guidelines and reporting requirements, such as the Common Reporting Standard (CRS), to ensure that offshore structures are used responsibly. Entrepreneurs and families must consult with legal and tax professionals to design structures that align with these frameworks.
Transparency is also critical. In an era where public opinion about offshore wealth structures is sensitive, it’s essential for families and entrepreneurs to employ these tools with integrity. Responsible and compliant use of offshore structures, paired with transparent reporting and an emphasis on ethical wealth management, helps protect not only the family’s wealth but also its reputation.
Creating long-term dynastic wealth and legacy
Offshore structures, when used responsibly and in compliance with global regulations, are potent tools for supporting entrepreneurial ventures and preserving dynastic wealth. By offering asset protection, tax efficiency, privacy, and strategic flexibility, these structures enable families and entrepreneurs to navigate complex financial landscapes while securing their legacies for generations.
For entrepreneurs seeking scalable solutions to expand their businesses globally, and for families committed to a long-term approach to wealth, offshore structures can provide unmatched benefits. As with any powerful tool, the key lies in informed, ethical use—working with trusted advisors to build a structure that is both robust and resilient in today’s evolving financial world. With the right foundation, entrepreneurs and families can ensure that their wealth not only endures but also continues to grow and make a positive impact for generations to come.
Entrepreneurship offers HNWIs a path to long-term dynastic wealth and legacy creation, but it isn’t without its challenges. By leveraging expert private wealth services, entrepreneurs can navigate the complexities of financial management, allowing them to focus on innovating and building successful businesses.
At Belasko, we’re dedicated to supporting the next generation of entrepreneurs in their journey toward sustainable success, ensuring their hard work and vision translates into enduring wealth for future generations.
Get in touch with Andy Bailey ([email protected]) if you would like to discover more.
Belasko is proud to sponsor the BVCA Tax Policy Conference on Tuesday 19 November in London. This is a key event in the funds diary, attracting senior tax, legal, and regulatory experts from the private equity and venture capital sectors. The conference will delve into the latest developments and policies shaping the private markets industry, providing essential updates on UK and international tax law, legal frameworks, and regulations that impact fund structuring, transactions, and compliance.
Topics covered will include:
– The latest UK tax policies affecting private markets
– Cross-border tax and regulatory challenges
– Evolving legal frameworks for fund management and investment structures
– Compliance updates and best practices
As the world prepares for the largest transfer of wealth in history, we are entering the era of the ‘Great Wealth Transfer’, with an estimated $84 trillion expected to pass from baby boomers to the next generation over the coming decades. This shift signals a profound opportunity, but also unprecedented challenges for heirs, many of whom may feel unprepared to manage the complexities of inherited wealth. The scale of this transfer has been accelerated by recent crises, including the pandemic and rising global inequalities[1], further underscoring the need for strategic succession planning.
For heirs receiving significant assets, the responsibility of managing and growing their wealth presents both opportunities and obstacles. According to a report by Cerulli Associates, nearly 45% of high-net-worth individuals (HNWIs) are concerned about their heirs’ ability to manage their inherited wealth effectively. The complexities of wealth management are evolving, and the next generation must be equipped not just with financial literacy but also with the tools and support to navigate a rapidly changing landscape.
The growing need for succession planning
Succession planning is crucial for ensuring the continuity and preservation of family wealth. But this shift in wealth also risks creating a “wealth divide,”[2] as only families with proper planning and access to sophisticated advisors will likely navigate the challenges successfully. Effective succession planning goes beyond just transferring assets—it’s about preparing heirs for the responsibilities they will inherit. The UBS Global Wealth Management study found that 54% of wealthy families lack a comprehensive succession plan, exposing them to potential disputes, tax inefficiencies, and the risk of mismanagement.
The ‘Great Wealth Transfer’ brings a new focus on preparing future generations for the stewardship of family wealth. Private wealth providers play a pivotal role in this process, offering expertise and guidance to help families create robust plans that encompass more than just financial assets. At Belasko, we understand that a successful transition requires both strategic planning and a deep understanding of family dynamics.
Challenges facing the next generation
The next generation of wealth holders faces unique challenges that differ significantly from those encountered by their predecessors:
Complexity of financial markets: Today’s globalised and volatile financial markets require a sophisticated understanding of various asset classes, including equities, bonds, real estate, and alternative investments. Heirs need to navigate not just traditional markets but also emerging asset classes like cryptocurrencies, all while managing broader macroeconomic risks such as inflation and interest rate volatility.
Maintaining family unity: Family dynamics can complicate financial decisions, especially when multiple stakeholders are involved. A lack of clear communication or differing visions for the future can lead to conflicts that jeopardise the preservation of inherited wealth. The FT article pointed out that such tensions can be exacerbated by generational differences in priorities and expectations regarding the use of family wealth.
Navigating tax and regulatory environments: As regulations evolve and become more complex, heirs must be aware of tax implications and compliance requirements. A study by Wealth-X found that nearly 30% of global wealth could be eroded by taxes if not properly managed, underscoring the importance of informed financial planning.
Preparing for the future
As the next generation takes on the mantle of managing inherited wealth, it is essential that they are well-prepared to handle both the opportunities and challenges that come with this responsibility. The ‘Great Wealth Transfer’ is not just a financial event; it represents an opportunity for families to redefine their legacies and strengthen their long-term impact. By prioritising education, strategic planning, and strong governance, families can ensure that their wealth is preserved and grows for generations to come.
With the right support, the next generation can build on the foundations laid by their predecessors and it’s evident that there is a need for families to have trusted advisors who can provide comprehensive guidance on wealth management, taxation, and family governance. This level of planning can safeguard a family’s wealth for generations to come.
And, working with experienced private wealth providers, like Belasko, can help ensure that heirs receive the guidance and support they need to succeed.
Belasko offer a range of services tailored to the unique needs of wealthy families, helping the next generation navigate the complexities of managing inherited wealth. Our approach can support families with anything from education and empowerment, to strategic planning, to trust and company administration.
By partnering with us, families can confidently face the future, knowing they have the expertise and support needed to navigate the complexities of succession planning with ease. Get in touch with our expert team to discover more.
The scale of the ‘Great Wealth Transfer’ means that thoughtful planning is no longer an option—it’s a necessity. If you’d like to understand how we can help ensure your family’s wealth endures for generations to come, get in touch with Andy Bailey ([email protected]) to discover more.
In today’s complex financial landscape, philanthropy is becoming an essential component of wealth management for high-net-worth individuals (HNWIs). By integrating philanthropic goals with financial planning, individuals can make a significant social impact while strategically managing their wealth. However, navigating the intricacies of charitable giving requires expertise and guidance, making the role of a private wealth provider increasingly vital.
The growing importance of philanthropy in wealth management
Philanthropy is not just about donating money; it’s about creating a sustainable impact that aligns with personal values and long-term financial goals. According to a 2023 report by the Charitable Giving Foundation, charitable contributions from HNWIs have increased by 12% over the past five years, indicating a growing trend towards philanthropic engagement among the wealthy. A 2022 study by UBS found that 72% of HNWIs consider philanthropy an integral part of their wealth management strategy, reflecting a shift in mindset toward more purposeful giving. As the desire to give back grows, so does the need for professional support in navigating the complexities of charitable activities.
Additionally, the Global Wealth Report highlights that the number of family foundations has increased by 60% over the past decade, underscoring a trend towards structured philanthropic giving. These statistics show that more individuals are not only looking to donate but are also interested in creating long-lasting, impactful legacies through their wealth. This growing importance of philanthropy in private wealth management necessitates the expertise of a third-party private wealth provider to ensure that charitable goals are achieved effectively and strategically.
Integrating charitable goals into wealth management
While the benefits of philanthropy are clear, HNWIs often face several challenges in integrating charitable giving into their wealth management plans:
Complexity in aligning philanthropic goals with financial strategies
Crafting a philanthropic strategy that aligns with personal values and financial goals requires careful planning and expertise. Many high net worths struggle to balance their desire to give back with the need to maintain financial stability and growth. Partnering with an expert provider can provide expertise in crafting bespoke giving plans that maximise impact while optimising tax benefits.
Regulatory and compliance challenges
Different jurisdictions have varying rules on charitable giving, making it difficult to ensure compliance across borders. This complexity can deter HNWIs from engaging in philanthropic activities or lead to unintentional non-compliance. A private wealth provider ensures that all philanthropic activities comply with relevant laws and regulations, minimising risks and enhancing the efficiency of charitable contributions.
Effective impact measurement
Determining the effectiveness of charitable contributions is often challenging. HNWIs need to ensure that their donations are making a meaningful difference and align with their philanthropic goals. Expert providers like Belasko can offer robust tools for impact measurement and reporting, allowing clients to assess the effectiveness of their philanthropy and adjust strategies as needed.
Family involvement and governance
Engaging multiple family members in philanthropic activities can be both rewarding and challenging. Clear communication and governance structures are needed to ensure alignment and avoid conflicts.
The role of a private wealth provider in philanthropy
A structured approach to philanthropy is crucial when integrating charitable goals into your wealth management. This can be effectively managed with the support of an expert, reputable private wealth provider. From establishing charitable foundations to ensuring compliance with tax regulations, they can offer tailored solutions that address the unique challenges faced by ultra and high net worth individuals in their philanthropic endeavours.
Working with a partner like Belasko
At Belasko, we offer a comprehensive suite of private wealth services tailored to the unique needs of HNWIs, from strategic planning to compliance support and impact measurement.
We help ensure that your philanthropic efforts are impactful, sustainable, and aligned with your broader wealth management strategy.
For more insights on how to incorporate philanthropy into your wealth management plan, get in touch with Andy Bailey ([email protected]) and find out how we can help you maximise the impact of your charitable giving and achieve your philanthropic goals with confidence.
An essential wealth transfer tool for any high net worth family is ensuring the effective management of a family trust, preserving your legacy, and ensuring that future generations benefit from your foresight. However, there may come a time when the trustee originally appointed is no longer the best fit for your evolving wealth management needs. Transferring a trust to a new trustee can be an efficient and strategic move to ensure that your assets are managed in line with your objectives.
In this article, Andy Bailey, Head of Private Wealth, explores why and how to transfer a trust to a new trustee, the benefits it offers, and what high net worth individuals (HNWIs) should consider throughout the process.
Why transfer a trust to a new trustee?
Trusteeship is an integral part of managing complex wealth, and while trustees are bound by a fiduciary duty to act in the best interests of the beneficiaries, circumstances often change. Whether due to shifting financial goals, personal relationships, or the evolving complexity of wealth management, HNWIs may find it beneficial to appoint a new trustee. Here are some common reasons:
Sophistication and expertise in asset management
HNWIs often have diverse portfolios that include not only liquid assets like stocks and bonds but also real estate, private equity, art collections, or even family businesses. The expertise required to manage these assets effectively can be highly specialised. If the current trustee lacks the necessary skills or experience, especially in global investments or niche assets, it may be time to seek out a trustee with more appropriate expertise.
Better personal service and engagement
Trustees are not just financial managers; they play a significant role in stewarding wealth for future generations. For HNWIs, having a trustee who understands their unique financial goals and family dynamics is critical. If the current trustee lacks responsiveness moving to a trustee who provides a more personalised, high-touch service can lead to greater satisfaction and trust in the management of the assets.
Jurisdictional and regulatory advantages
With the global mobility of HNWIs, you or your beneficiaries may have moved to a new country with different tax laws and regulatory frameworks. Transferring your trust to a trustee who understands jurisdictional obligations when it comes to tax and regulation and can help simplify compliance with local laws can be hugely advantageous.
Changing family or business circumstances
As families grow and their financial needs evolve, trustees must adapt to new circumstances. If your family has expanded or there are new business ventures to consider, the existing trustee may no longer be the best fit. A trustee with experience in intergenerational wealth transfer or managing family-owned businesses might offer better solutions for your family’s evolving financial landscape.
Market consolidation and continuity concerns
The trust market is seeing significant consolidation, with many trustees being acquired by larger firms, leading to disruptions in service quality and a loss of personal relationships. For HNWIs seeking stability and consistent service, moving to a trustee that is independently/family-owned can provide long-term continuity and a more personalised relationship management approach. These trustees often have a vested interest in maintaining strong, lasting client relationships.
The process of transferring a trust is easier than expected
For HNWIs, the prospect of transferring a trust may seem like a complex endeavour, but the process can be straightforward, especially with the right advisors. Here’s how it generally works:
Review the trust deed and legal requirements: Consult the trust deed to understand the terms governing trustee replacement. Most trust deeds include provisions that outline the process for appointing a new trustee. Some may require the consent of beneficiaries or a protector, while others may provide broad discretion to the settlor.
Consult advisors and stakeholders: Before making any decisions, it is essential to consult with your legal, tax, and financial advisors. They will help assess any potential legal or tax implications of moving the trust to a new trustee, particularly if the transfer involves cross-border assets or multi-jurisdictional considerations.
Appointing the new trustee: Choosing a new trustee is arguably the most important step. For HNWIs, the decision should be based on a trustee’s ability to manage complex asset structures, their understanding of global markets, and their approach to family governance and succession planning. Boutique trust companies are often preferred by wealthy individuals because they offer a higher level of service and a bespoke approach.
Prepare the legal documentation: Once the new trustee has been selected, a Deed of Retirement and Appointment will need to be drafted to formalise the transition. This document specifies the outgoing trustee’s resignation and the appointment of the new trustee. Your legal advisors will ensure that all documentation is in order and compliant with the trust deed and local laws.
Transferring assets: Transferring the trust’s assets to the new trustee may require coordination with financial institutions, asset managers, or other parties to ensure a seamless transfer. Additional steps may be required if assets are in different jurisdictions to comply with local laws or regulations.
Key considerations for High Net Worth Individuals
As with any significant financial decision, there are several important factors to keep in mind when considering a transfer of trusteeship:
Legal and tax implications: A transfer can trigger tax liabilities, especially in cross-border cases, so consult tax professionals to plan accordingly.
Trustee reputation: Ensure the new trustee has the expertise and reliability to manage large estates as well as a consistent and responsive approach to relationship management.
Long-term flexibility and stability: You want a trustee who can evolve with your financial and family circumstances over time. Choose a trustee who can adapt to changing circumstances and family dynamics and have a solid ownership structure behind them.
Costs of the transfer: Weigh legal fees and transfer costs against the long-term benefits of appointing a more capable trustee. At Belasko, we can make the transition seamless, fill any gaps you’re experiencing with your existing trustee, at a competitive cost.
A strategic move for wealth preservation
For high-net-worth individuals, transferring a trust to a new trustee can be a strategic decision that enhances the management and protection of wealth. Whether you are seeking better expertise, more personalised service, or a trustee with jurisdictional reach, the process of transferring trusteeship is easier than many might think.
As an independently owned business, our private wealth team are reliable, experienced and provide continuity and longevity in building relationships. Our bespoke private wealth solutions draw on the many years’ experience of managing the needs of HNWIs. We collaborate with your advisors, act as professional trustees, and ensure effective management and administration of the trust. We can ensure a seamless and smooth transition of your trust, at a minimal cost, which will also be a valuable step toward safeguarding your legacy for generations to come.
If you’d like to discuss transferring your trust, get in touch with Andy Bailey ([email protected]).
Last week, Belasko were proud sponsors of the BVCA Annual Summit, the flagship event for the private capital industry, attracting over 1,000 attendees from across the ecosystem.
This year’s theme, “Partners for Growth,” emphasised the evolving role of private capital in driving innovation, partnerships, and investment in people as the industry moves into its next phase. Ross Youngs, our Chief Commercial Officer, shares the key highlights from this year’s summit.
Recovery expectations and market outlook: There is an important yet subtle shift recognising the worst is behind us. Panellists cited that the market may not fully recover until 2026 or 2027 however we expect the IPO market to reopen in 2025 and interest rates to continue to decline supporting growth. They also highlighted that whilst the M&A market is subdued, there are deal flow opportunities coming from the mid-market (£50-500million) as well as from family-owned businesses.
Optimism in venture capital: With asset prices low and competition reduced, Managers view this as a prime opportunity to act. As highlighted by Isomer Capital, now is the time to strike, capitalising on lower valuations to fuel growth.
Artificial intelligence (AI) and technology – long-term investment and integration: AI continues to dominate discussions, with the consensus that AI’s investment cycle will span the next 20 years. Investors are increasingly focused on software that connects industries, utilising AI to drive efficiency across verticals and horizontals. However, as AI advances, so does the need for stronger cybersecurity management to protect against sophisticated threats.
Government support and the UK’s venture capital position: Government support for the private capital sector was a key theme, with Tulip Siddiq, Treasury Minister, pledging a stable, low-tax environment to foster investment. Reducing the funding gap for Series B and C is an important priority to enable British business to flourish. Initiatives include encouraging pension funds to invest in the space and reforming planning to support these industries.
Private credit and stable investment options: Demand for private credit remains strong, offering stability for fundraising and yielding steady returns. Investors continue to seek more evergreen solutions that provide cash yield stability, while the rise of software as a service (SaaS) also presents attractive opportunities.
Liquidity tools on the rise: Liquidity options have expanded significantly in recent years, with access to over 25 different platforms now available, compared to just one a short time ago. This rise in liquidity solutions is helping businesses navigate the challenging market conditions, particularly as more opportunities emerge in the secondaries market.
The 2024 BVCA Summit offered a comprehensive look at the evolving landscape of private capital, providing delegates with valuable insights into the future of the industry. From AI integration to government backing and the continued rise of the secondary market, the next decade promises significant transformation, and the private capital market is well-positioned to drive this growth forward.
If you’d like to discuss how Belasko can support your business with achieving your growth goals and capitalising on new opportunities, get in touch with Ross Youngs ([email protected]) to arrange a meeting.
As the UK navigates changes in the non-dom tax regime, the new Labour government under the Treasury’s leadership is set to introduce several strategic updates. These updates are part of a broader effort to align the UK’s tax system more closely with international standards and maintaining stability.
The government will finalise policies in the upcoming Budget (30th Oct) but here we highlight some of the key proposed updates to the UK taxation for non-dom individuals that should be considered carefully[1].
Foreign Income and Gains (FIG)
Current system: Non-domiciled individuals in the UK are currently taxed on a remittance basis, meaning you are only UK taxed on income and gains remitted to the UK.
Proposed new system (from 6 April 2025): A shift to an internationally competitive residence-based system will be introduced meaning all worldwide income and gains will be subject to UK tax. However, a four-year relief period will be granted to new arrivals to ease the transition.
This change provides non-doms with a limited-time opportunity to remit foreign income and gains to the UK at a more favourable rate (12%), encouraging the reinvestment of global wealth into the domestic economy.
Inheritance Tax (IHT) rules based on residence
Current system: IHT is determined by domicile status, with UK-domiciled individuals liable for IHT on worldwide assets and non-dom individuals liable for IHT on UK assets only.
Proposed new system (from 6 April 2025): IHT liability will be based on residence rather than domicile. A new provision extends the scope of IHT to non-doms who have moved abroad, applying a 10-year window of liability. This measure ensures continued fiscal responsibility for those with substantial ties to the UK, even after they have relocated.
Trusts and Non-UK Assets
Current system: Under current rules, UK non-doms can establish excluded property trusts to shelter non-UK situs assets from UK IHT. These trusts have provided a means of protecting assets from IHT, thus serving as an essential tool for estate planning and asset protection.
Proposed new system: The Treasury has indicated potential grandfathering provisions for existing excluded property trusts. This potenitially means that trusts established before a specific date could retain their excluded property status, thereby exempting non-UK situs assets from IHT[2].
Settlor-Interested Trusts
Current system: These trusts often offer tax advantages to non-domiciled individuals.
Proposed new system: The preferential tax treatment for settlor-interested trusts will be gradually phased out, potentially leading to further tax obligations for settlors.
Strategic considerations for HNWIs and UHNWIs
With these updates, it’s crucial for non-domiciled HNWIs and UHNWIs to engage proactively with their advisors to navigate the evolving tax landscape and future proof wealth planning.
While the new government maintains continuity in many aspects of the non-dom tax regime, the introduction of specific measures marks a decisive shift towards a more inclusive and accountable tax system. Non-doms, particularly HNWIs and UHNWIs, must remain vigilant and informed to effectively manage their tax obligations and financial planning strategies.
Belasko’s proactive scenario-based analysis
At Belasko, we’re already proactively supporting our clients with scenario-based analysis to ensure they’re prepared and ready for any potential taxation impacts that will be put in place after the 30th October.
The scenario planning includes the mapping and analysis of a client’s investment universe, stress testing them against the potential changes that could be implemented by the UK government. This provides our clients with intuitive, cost-benefit analytics upon which families and their advisers can make informed decisions.
We’re experienced when it comes to optimising wealth across jurisdictions and generations and are ahead of the curve when it comes to navigating potential new tax and regulatory barriers.
Our private client directors all have 20+ years of extensive experience, leading a frontline administration and accounting service delivery team. We hold strong relationships with leading legal and tax advisors and deliver tailored solutions, while being truly dedicated to delivering client service excellence.
If you’d like to discuss how we can help you navigate new waters as a result of the new UK government, get in touch with Andy Bailey ([email protected]).
ESG has fast become one of the better-known acronyms in financial services, continuing to dominate news headlines. As a result of this, buyers of goods and services are now differentiating where they allocate capital and prioritising businesses pushing to make a difference. This has shifted ESG and sustainable finance from just buzzwords to critical components of the financial landscape.
Despite a cooling in ESG fundraising to $91 billion globally in 2023, there has been a notable resurgence in 2024, with $55 billion raised by April alone[1]. This rebound highlights the sustained interest and commitment to ESG principles among investors and fund managers. And, according to PwC, analysts expect ESG AUM to reach c20% of Global AUM or $33.9trn by 2026 ($18.4trn 2021).
Interestingly, while the performance difference between ESG funds (13.5% IRR) and non-ESG funds (15% IRR) is not significant, ESG funds tend to exhibit lower variance. This lower risk profile can be appealing to investors seeking stability. Moreover, six out of ten investors have either rejected an attractive investment opportunity or would do so based on ESG concerns, underscoring the growing importance of these factors in investment decisions[2].
Ross Youngs, Chief Commercial Officer at Belasko, identifies how ESG is shaping the future of investment, the impact on our clients and the business’ proactive approach to lead the way.
How are our clients impacted?
Our fund clients experience varying degrees of impact from ESG, largely influenced by their size and marketing strategies. Many clients share our proactive stance and have generally adopted two distinct approaches based on the level of regulation required:
The Sustainable Finance Disclosure Regulation (SFDR): A key regulatory framework in the EU that governs the transparency and reporting of sustainability-related information by financial market participants.
The Principles for Responsible Investing (PRI): Where SFDR has not been relevant, our clients have chosen voluntary compliance with the PRI which provides a set of ESG principles designed to foster a positive, sustainable impact within the global financial system.
Unpacking the SFDR
There are three levels of regulation applicable to funds marketed in Europe under the SFDR:
Article 9: These funds are dedicated to achieving specific sustainable objectives. They have strict requirements on how they achieve their goals. There has been a great deal of focus on this category of fund with rigorous evidential reporting. Due to these high standards, about 40% of Article 9 funds, representing $175 billion, have reclassified to Article 8.
Article 8: These funds promote positive environmental, social, and governance characteristics without necessarily having them as their primary objectives.
Article 6: This category includes funds that do not integrate sustainability considerations into their investment strategies.
These three levels of regulation serve as stepping stones depending on where the business or fund is on its ESG journey.
How has ESG impacted Belasko?
At Belasko, we recognise the significant benefits of incorporating ESG into our business strategy. Although we’re not legally required to report on sustainability, we’ve taken a proactive approach in doing so by partnering with Terra Instinct to develop a Responsible Business Policy. This initiative includes forming a group-wide committee, defining relevant sustainable metrics relevant to our business, setting targets, and publishing an annual report on our ESG journey for clients and investors.
We anticipate that mandatory ESG reporting will become a reality for businesses like ours in the coming years. To stay ahead, we’re committed to being leaders in this space, continuously taking proactive steps to lead the way.
How can we help you?
No matter the complexity of compliance with the PRI or SFDR, there are common challenges that we can support you with.
Defining a policy of responsible investment: The policy must consider the fund’s impact on ESG factors and establishing data points to measure and track positive impact according to the goals set.
Data collection: While it may seem straightforward, data collection is not standardised across markets and countries so the sophistication and resource availability of portfolio companies to stream up the data sets can vary considerably.
Regulation and investor demand: With both evolving rapidly, our clients often lack the internal ESG resources to stay compliant therefore relying on Belasko to keep them informed.
We have developed an end-to-end solution in partnership with Terra Instinct to power auditable data collection. Terra Instinct are specialists when it comes to defining policy and collecting and validating data, as well as providing reasonable industry estimates where data is not available. The expertise of advisory specialists is crucial in ensuring data quality, which, in turn, ensures accurate and reliable reporting for investors.
Moving forward
It’s evident that ESG is here to stay, with a growing market expectation for sustainability considerations in both our personal and business lives. Adopting positive-impact principles is essential for future success.
If you’re looking to prepare for the future of ESG, get in touch with Ross Youngs at [email protected].
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