As we continue to prioritise our clients’ financial well-being, we have been addressing the unique challenges faced by those who have relocated from South Africa to the UK or those who have family in the UK. Recognising the complexities of cross-border financial planning, we have taken significant steps to ensure that they receive the highest standard of advice tailored to their new jurisdiction. This article outlines our journey and the measures we have implemented to support their financial needs effectively.
We receive a significant number of queries from clients and their children about the process of moving to the UK, with many also being settlors or beneficiaries of South African and/or offshore trusts.
Since formal emigration through the Reserve Bank was phased out in 2021, global mobility has become more accessible for South Africans. However, advice around the new regulations and SA tax non-residency has become more relevant than ever. We have significantly increased our focus and skills in this area over the past few years and can actively assist clients navigate the complex process of pre-and post-arrival planning
Our goal is to ensure that in the UK, you will be advised by a Certified Financial Planner (CFP) who is registered in both jurisdictions and authorised to give UK advice. This approach allows you to retain relationships where there are assets remaining in South Africa (SA), while additionally providing the UK planning.
Most of our clients who have left SA settled in the UK, and although they wanted to retain the relationship with us, we knew that this would not have been in their best interests. In the past, we reluctantly referred them to another independent UK financial planning firm to ensure they received proper advice in the UK.
This got us thinking about the possibility of starting our own UK financial planning business. After doing the research, it was clear that the regulatory environment and related costs of setting up in the UK were prohibitive. Seeking an alternative, we have spent the last few years building a relationship with an established UK independent advice firm very similar to our own.
As our goal was to retain our existing client relationships, we started the long process of registering one of our advisers, Clare Cousins, to give advice in the UK. Clare will soon be working under the license of the UK firm. After completing the necessary qualification and UK CFP accreditation, undergoing the obligatory period of supervision, and meeting all the compliance and PI cover requirements in the UK, this process is now almost complete. We have started growing our UK client base, and while there are ongoing challenges, we are grateful to have this opportunity.
We have learnt many valuable lessons, but one of the most important of these has been our realisation that SA advisers who are advising UK tax residents, but without the knowledge or authorisation to do so, are potentially putting their clients at risk.
There are many cases of SA residents having moved to the UK without receiving the correct advice regarding their tax residency in either jurisdiction. Most have simply retained the investments they held while living in SA, with little or no understanding of the implications. The funds, investment vehicles, and structures which are appropriate for SA tax residents are not suitable for UK tax residents and can have punitive tax consequences in the UK. Where an SA or offshore trust is involved, this adds further complexity.
Clients in the UK, working with an authorised UK advisor do so with the protection offered by the UK Financial Conduct Authority, Ombud, and Financial Services Compensation Scheme. They will have no recourse to the SA regulatory authorities for bad advice given to them by an adviser in SA on their UK planning.
UK tax legislation is complex and constantly changing, and the rules around UK tax residency are stringent. We also work closely with a small UK tax firm that specialises in cross-border planning, while we do the necessary planning to mitigate the adverse tax and financial consequences of leaving SA. Where complex structures or entities are involved, this may involve bringing in specialists in SA.
UK residents need proper lifestyle financial planning advice in their new jurisdiction. Retirement and tax planning, risk cover, inheritance tax planning, tax-efficient savings, and investment vehicles all require extensive knowledge of the UK environment, as well as access to UK cashflow modelling software and paraplanner support.
A two-dimensional approach has resulted in peace of mind and better financial outcomes for our clients in the UK, from the pre-planning stage to the implementation of best advice. It has also proved invaluable for our SA clients with family in or ties to the UK.
For those of you who have family in the UK or are considering moving there, please contact us. We would love the opportunity to discuss the value we can add.
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