WW Snippets test
“By the conclusion of 2022, a staggering 88,000 High Net Worth Individuals (HNWIs) – those possessing wealth exceeding one million dollars – had migrated to foreign lands. This number is poised to reach 125,000 within the current year, marking an unprecedented surge. The Global Citizens Report by Henley & Partners highlights the escalating trend of affluent individuals relocating abroad. According to Fabrizio Palumbo, Group Country Head Italy at Octium Group, “”The possession of greater financial resources doesn’t necessarily simplify the transfer process. It demands meticulous legal, tax, and wealth advisory consultations to comprehensively analyse the methods and repercussions of altering one’s residence.””
Embracing the New Norm
The evolving fabric of society has made the needs of HNW individuals and their families increasingly intricate. The motivations behind their relocation are often multifaceted. Some may opt for countries with more favourable tax regimes or a stable economic and financial climate than their home nation. Others might see it as part of a succession plan to leverage a more accommodating legal and tax framework for their heirs and wealth preservation. Some choose to relocate for retirement, seeking a more desirable climate and quality of life. Fabrizio Palumbo remarks, “”Irrespective of the rationale behind the move, the demand for qualified advisory services has significantly surged, given the disparities in legal and tax regulations across jurisdictions, which often pose formidable challenges to HNW individuals and their families.””
Diverse Rules in Different Countries
Wealth management deploys an array of tools to cater to the wealth protection requirements of clients looking to transfer assets between countries. These tools encompass trusts, foundations, and private insurance solutions. Nonetheless, even within similar legal systems, such as European Union member states, substantial differences can exist in both legal and tax aspects concerning these solutions. Fabrizio Palumbo adds, “”Failure to consider these disparities can adversely affect the wealth of HNW families relocating to another country. Hence, it is imperative to select instruments capable of avoiding expatriate taxes, which numerous states levy on HNW taxpayers altering their fiscal residency.””
Portability is the Key
“”Among the available tools,”” Fabrizio Palumbo continues, “”unit-linked life insurance policies emerge as a viable solution for individuals intending to move abroad while maintaining their wealth flexibility and avoiding unforeseen costs.”” Unit-linked life insurance policies and the financial assets held within them are portable, signifying that the product’s attributes can be upheld during relocation without terminating the policy. Consequently, the insured capital in the policy can seamlessly accompany its owner without incurring expatriate taxes, which are typically not imposed on capital invested in life insurance. “”Whether a change of residence is on the horizon or merely under consideration, a unit-linked life insurance policy can effortlessly adapt to the clients’ mobility needs. The policy will accompany clients during their relocations and readily make any necessary adjustments regarding contractual structure and underlying assets if required.”””
