IN469 - The Annual Dixcart Seminar - March 2017: Risk Mitigation for Family Offices and Corporates

As many of you know, each year Dixcart hosts a seminar. This year the topic was risk mitigation for family offices and corporates and was held at the Institute of Chartered Accountants in England and Wales (ICAEW) in London.

Risk is an increasingly important factor to mitigate for any business and for this particular seminar Dixcart chose to highlight the areas of geographic risk, family risk, cyber risk and insuring against risk through the use of captives.

Geographic Risk

Laurence Binge, director of Dixcart International Limited opened the presentation with the topic of Geographic Risk.

Much has changed since Dixcart held its first seminar eleven years ago. Social Media has boomed, tax is far more transparent, there is base erosion and profit shifting, plus we are now facing Brexit and Trump! More than enough reasons to consider geographic risk.

Laurence then went on to discuss Cyprus, Guernsey, the Isle of Man, Malta, Portugal, and the UK as safe harbours for residency.

A change of residence can offer a number of opportunities and individuals may be able to rearrange their affairs in a tax advantageous way. Laurence detailed the Portuguese Non-Habitual Residents Scheme, the Non-Dom Regimes in Cyprus, Malta and the UK, Lump Sum Taxation in Italy and Switzerland, and the capped taxation and low taxes available in the Isle of Man and Guernsey.

Family Risk: Spendthrifts, Divorce and the Use of Trusts and Agreements to Mitigate Risk

The second speaker was Lucy Greenwood, partner at the International Family Law Group LLP (IFLG); she specialises in the field of Family Law.

Lucy spoke about divorce in the jurisdiction of England and Wales and the legal aspects that individuals should consider before marriage. She also talked about the significant variations in outcome of divorces between countries. Lucy explained that even factors such as the legal status of a particular relationship in the particular country to which individuals might be planning to move can be highly relevant prior to moving.

If clients are considering cohabiting, marrying, separating, divorcing or moving their family abroad, steps should be considered beforehand to seek to reduce financial risks, including consideration of marital agreements – or even the review of an existing marital agreement, particularly if they were entered into abroad. They should seek advice from an International Family Law Specialist. Not every family lawyer has the relevant knowledge to provide advice on international family law matters. Lucy’s talk showed that an international dimension can provide helpful options, but also pitfalls about which families should be aware.

Cyber Resilience

Paul Weeden, founder of Foration Limited, entertained and frightened the audience with the issue of cyber risk and security.

Paul touched on the topics of cyber insecurity, the threat to businesses, cyber-attacks and, very importantly, understanding the risks involved regarding systems and data. Increasingly, businesses, family offices, corporates and individuals are targets of cyber threats and amongst the biggest risks are significant financial loss and information being held for ransom.

Individuals should also be wary of impersonation, phishing and whaling and Paul finished his presentation by outlining some simple steps for businesses to help protect themselves from these risks.

Insuring Against Risk Through the Use of Captives

Bruce Watterson, Director of Dixcart Trust Corporation Limited, covered the use of captives for insuring against risks.

This was a thought provoking way to end the seminar. Bruce explained in his presentation how conventional insurance markets can fail the needs of the buyer, with the price, cover and level of service being amongst the common criticisms. Instead he recommended that companies can have more control over these elements through the use of a captive.

An alternative to a company running a captive themselves is to have a protected cell company within a captive. This provides a single legal entity, with the assets and liabilities segregated within cells.

The main drive behind captive insurance is the ability to retain wealth, whilst insuring against risk exposure and providing a bespoke and complete insurance cover for a family office structure. All premiums are retained and invested within the structure and there are a number of opportunities for estate planning, wealth transfer and asset protection; not to mention the retention of profits on onward distribution and the costs that can be saved during the process.

Summary

The seminar attracted many professionals from top London firms, organisations elsewhere in the UK and from overseas, and there was plenty to discuss in the networking following the event.

If you have any specific questions regarding family risk or cyber risk, we can put you in contact with Lucy Greenwood or Paul Weeden.

Further Information

For more information on risk mitigation and insuring against risk, please contact us: advice@dixcart.com or your usual Dixcart contact. 

 

Categories: Guernsey, United Kingdom, 2017