[Insights Article] Pre-Immigration Tax planning is Crucial
According to a recent report published by Henley & Partner, cities in the United States and Asia continue to dominate the world’s top 10 wealthiest cities offering favourable environments for people to live, work, study and invest, all of which are important considerations to many high-net-worth (HNW) individuals when they plan to relocate their families.
With 340,000 millionaires, New York City is ranked as the wealthiest in the world with Singapore in fifth place, a sign from the recent increase in family office setups in the Lion city. China also has three cities in the top 10 list, including Hong Kong, Beijing and Shanghai.
Often, local tax considerations are not on the agenda for many relocating wealthy family members, making future planning more complicated. Inheritance tax is just one example of the many unaware tax burdens from these new jurisdictions and seeking proper tax advice and strategy ― which may involve setting up a family trusts and insurance solutions, donating and gifting ― should be considered at an early stage. Determining how to leverage various tax treatments in different countries to reduce tax burden is also crucial to the planning process.
There are pre-immigration planning strategies available for popular destinations which include US, Canada, UK and Australia. Hong Kong recently announced that it will revitalise its capital investment entrant scheme while Singapore raised investment requirements for foreign investors, reflecting an increasing demand from HNW families to migrate to these locations.
Without proper planning and advice on estate planning in these new environments, the issue of estate transfer in the future could be a contentious one in addition to the additional issues of local taxation.
As a total solution provider offering consultancy services on Insurance, Trust and Family Office, Lioner has operations in both Hong Kong and Singapore, two of the world’s wealthiest cities, and is ready to serve HNW families in both cities as well as the wider Asia region. Investment migration involves not only investing and acquiring citizenship, but also having proper and early tax and estate planning. For this reason, Lioner integrated Trust consultancy into its solutions upon the company’s founding.
HNW families should adopt a holistic approach in pre-immigration planning and estate planning. Consulting an advisor and planning can save expenses and, in some cases, ensure family harmony.