Frank was a successful South African client with our sister company, Nedbank Private Wealth South Africa, and owned a franchise of popular restaurants, in South Africa and internationally, that he had established. Having built up significant wealth over the years, while a lot of the client’s wealth was international, it was all in his personal name and consequently still part of his estate.
The wealth structuring process
We sat down with Frank to establish his main financial goals and objectives, which were:
The results
Following the discussions with Nedgroup Trust, Frank decided to establish a discretionary offshore Jersey trust and an investment company, which would initially benefit his three children, as well as any future generations to be born.
Frank loaned the the majority of the funds and various assets ‘in specie’ to the trust at a commercial rate of interest. From the Latin phrase meaning ‘in its actual form’, this method allows assets to be moved without selling any underlying investments, avoiding the associated costs and risks of selling and rebuying the assets, as well as remaining invested in the market throughout the transfer.
This transfer to the discretionary trust meant he was subject to tax in South Africa on the actual interest received or accrued from the trust. However, this then allowed an underlying company to be established to hold the assets of the trust and enable investments into UK situs assets.
Further to this, given the assets are held within the trust and do not form part of the client’s estate, it would not be subject to probate, although this is limited to value of assets that the client has loaned to the trust.
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Should you require any further information, please do not hesitate to contact your usual Nedgroup Trust relationship manager who will be happy to discuss the topic with you.
Or if you wanted to find out more about how Nedgroup Trust, or Nedbank Private Wealth, can help you plan and structure your wealth for your family and for future generations, please get in touch using the links to the forms towards the end of this page.
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