Cross-border wealth planning considerations

When you live an international lifestyle with assets held in multiple countries, managing and planning wealth can be more complicated due to the different rules across jurisdictions. Factors such as residency status and which country is regarded as your main place of residence affect tax efficiency and rules around legal structures.

Understanding tax residency and domicile rules

Tax residency refers to which country you are considered a resident for tax purposes, and this will be decided based on information such as:

• The number of days spent in the country during that tax year.
• The location of your business interests/employment.
• Whether you have a permanent home in the country.

Although the rules vary across different countries, many countries classify people as tax residents if they spend at least 183 days in that country.

Which country you are classified as a tax resident for will impact how you are taxed. For example, many jurisdictions tax on worldwide income, while non-tax residents pay tax on the income generated only in that country. Residency status will impact income tax, capital gains tax and inheritance tax.

Managing assets held across multiple jurisdictions

When you hold assets in multiple countries, you can benefit from asset diversification to manage risks, but you have more compliance responsibilities to adhere to. Different countries apply their own set of tax rules, with varying approaches and deadlines for tax reporting.

Choosing to work with a wealth planning provider who is experienced in wealth preservation with assets held across multiple jurisdictions can help support compliance and efficiency, and reduce the risk of gaps in reporting. These services will often involve the coordination of ownership structures for overseas property and investments.

Currency exposure and international cash management

Another consideration for cross-border wealth planning is currency exposure, where your assets often fluctuate in value when exchange rates are adjusted. These fluctuations can have a significant impact on portfolio performance, so effective international cash management is essential for efficiency and stability. One risk management solution for currency exposure is to hold cash in multiple currencies, where this is appropriate.

Cross-border estate and succession planning

Planning for the future in terms of transferring your estate and succession planning also requires careful planning around inheritance laws, tax rules and probate processes. Preparing for the asset transfer in advance can help ensure that the most efficient structures are used to avoid unexpected tax liabilities or administrative delays.

Regulatory and reporting obligations in different countries

Reporting processes and systems differ across countries and failure to comply with the relevant tax rules can result in financial penalties and in some cases, legal consequences. As the regulatory frameworks have different rules, professional services specialising in international wealth management are highly beneficial to individuals with cross-border assets. This helps ensure that tax reporting is accurate and timely.

Coordinating advisers across jurisdictions

Effective cross-border wealth planning involves streamlined coordination between advisers in different countries so that tax, legal and financial advice is aligned. At Nedbank Private Wealth, we have strong relationships with advisers across key jurisdictions who specialise in the rules that apply in each relevant country.

If you would like to find out more about our cross-border wealth planning services, please get in touch with our team by calling +44 (0)1624 645000, or contact us by email or chat function