The IBSA Podcasts

International Succession Planning

• Lucie • Season 2026 • Episode 1

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What happens when a globe-spanning family fortune meets the realities of modern tax, law, and succession planning?

In this episode, an international panel of experts unpacks a compelling case study centred on a fictional entrepreneurial patriarch facing the ultimate question: how to pass on a complex mix of business interests, property, and personal wealth to the next generation — smoothly, fairly, and tax-efficiently.

Drawing on perspectives from tax advisers, onshore and offshore legal counsel, and investment specialists, the panel takes listeners inside the family’s existing wills, trusts, and pension arrangements, spotlighting potential inheritance tax pitfalls and the challenges of cross-border planning, including continental forced-heirship rules.

The conversation ranges widely across key international issues, from wealth and estate taxes in several EU jurisdictions and the US, to the treatment of overseas property holdings. The panel also examines how measures announced in the latest Budget could reshape the family’s planning, and what structural changes may be needed to keep their investment strategy aligned with an evolving legal and tax landscape.

Beyond the numbers, the discussion delves into the human side of succession — exploring the tensions that can arise between family members and offering practical strategies for anticipating, managing, and mitigating conflict to ensure a lasting legacy.

Whether you advise international families or are part of one yourself, this episode offers valuable insights into the realities of long-term, cross-border succession planning in an increasingly complex world.

SPEAKER_05:

Good evening, ladies and gentlemen. Thank you. Oh, you suddenly got very quiet. Thank you for coming out on a horrible evening. But uh it's January, what do you expect? For those uh who are new to the IBSA Club who don't know anything about us, uh we are a multidisciplinary and multi-jurisdictional organization of entrepreneurs and their professional advisors. Um we have members in over 30 countries, uh, and they're drawn from a broad range of disciplines, uh, including banking, accountancy, law, IP specialists, investment specialists, bullshitters, corporate service providers. I'm sorry. Sorry, that wasn't in the notes. Corporate service providers and international family offices. I founded the association 12 years ago uh with friends and associates around the world, some of whom are here tonight, which is very nice. Uh, and now we're looking forward to the next stage of the IBSA Club's development, uh, which I have called the next gen phase. Uh I've asked Vincenzo Nello. Vincenzo, stand up just to say so that they can say hello to you. He's a family office lawyer with whom I've worked for the past eight years on a mutual client, uh, and he's going to be our part-time development director to help develop the next stage of the IBSA Club, focusing this year on appointing global ambassadors and introducing a WhatsApp community group, which we'll hear more of. And Lucy, of course, over there, will be continuing her brilliant work as our administrative director. So now we are looking to recruit a next gen annual captain and vice captain to help with these meetings, selecting topics and speakers, uh, which I hope enhances their international profiles, but also without too much time spent on this voluntary role. So if anybody's interested and you know anybody uh that might be suitable, please discuss this with me.

SPEAKER_04:

Let me uh move on to uh the next uh slide. Um we now come on to today's topic.

SPEAKER_05:

Uh uh International succession planning. Uh I hope you've all read the case study, uh, but briefly, Gennaro uh is a wealthy Italian entrepreneur living with Maria and his daughter Giulietta, with two sons from his first marriage to Sophia. He has various investments through a Liechtenstein Foundation and Swiss pension fund, as well as his vineyard business in Sicily. His real estate interests comprise his Italian home, a second home in Spain, where he plans to retire with Maria in years to come, and a participation in a New York office complex. In 2018, he moved to the UK with Maria and Julietta to develop his Sicilian vineyard business and created a jersey trust to acquire land in the UK for a vineyard, purchasing another family home nearby. On January the 15th, at these wonderful premises today, Gennaro invites a ton of specialists to advise him on his personal tax issues, his family and marital issues, and the benefits of retaining his offshore funds. He also wants these specialists to help him consider his next move if he leaves the UK for Spain over there, and uh or perhaps return to his beloved Italy. So, first of all, um, by way of introduction, um, our first speaker is Adam West. Uh Adam is our first panelist, and he's going to be discussing Gennaro's tax affairs. Adam is a chartered tax advisor with Gately lawyers uh who has a wealth of experience with private clients such as Gennaro. So over to you, Adam.

SPEAKER_00:

And what that means is you are subject to uh UK income tax um on worldwide income and gains. Um and when you become long-term resident, i.e. you're UK tax resident for 10 years, at that point UK inheritance tax starts to bite. Now there are there's a couple of get-outs. Uh so one is the foreign income and gain regime, which is the FIG regime, which is basically the your four first tax years of UK residents, um there would be no UK income tax on your offshore income and gains. Um and there would be um there's also a thing called a temporary repatriation facility, which would allow unremitted income and gains historically to be brought to the UK at a significantly reduced tax rate. So 12% for the current tax year, 12% from the next tax year, and then in the third and final tax year, it goes up to 15%. Um lastly, trusts. Um historically, you could protect uh assets in the UK by using protected settlement trusts. Um, again, that changed from April 25 last year, such that uh income gains within those trusts were taxable uh on UK resident individuals, and also um there would be within the scope of UK inheritance tax once you were long-term residents. That's a bit of history on the kind of historic tax piece and the more recent changes from last April, and that kind of drives the whole structure and what it means from a tax perspective, and perhaps why various structures were set up historically when he came to the UK in 2018, and it will structure any advice that we would give to him prior to that 10-year becoming long-term resident 2018, so 2028. That's why there's this line in the sound of 2028, because at that point he would become long-term resident and he would it would have implications for the whole the whole structure. So that's kind of the background, which is probably a reasonable place to perhaps pause right and then bring someone else in.

SPEAKER_05:

Yeah, that's very good. Um, just uh for those of you who haven't been before, the uh idea of these meetings is that each of the panelists introduces their topic just for about five minutes maximum. Um, and um and it goes round the table until uh we finish, and then I throw it open to the floor. I ask you for questions, comments, uh, your own ideas, some anecdotes, perhaps uh your own experiences. Uh, and we have a good discussion about how um this case study will develop and what we should be doing in relation to the case study. So that's a preliminary discussion that Adam has introduced. Um, next up uh is going to be uh our hostess with the most is um that's Liz Palmer. Um Liz is a private client partner at Howard Kennedy here. Uh more importantly, I know she's a very, very good lawyer because she's our private client lawyer as well. Uh so let me introduce you to Liz.

SPEAKER_06:

Thank you. Can you hear me all right? Yeah, marvellous. So welcome as the hostess with the most test. It's really lovely to see you all and have you all uh uh in our offices this evening. Um The question I ask myself is well, firstly, it's nice to have someone who isn't immediately trying to leave the UK. That makes a change. So, you know, Gennaro's at least deciding he's gonna stay here for a little while longer. Um and the question that I ask myself when we're helping people like Gennaro is do you start with tax or do you start with succession planning? So, you know, obviously Adam's just given you a quick rundown of some of the quite complicated tax stuff going on. Um, the succession piece, I'm gonna talk about that just for a couple of minutes. Uh, it's so intricately entwined with all the tax stuff, it's quite hard to divorce the two. But but if I were to suspend reality and divorce the two for a moment, and I were saying to Gennaro, okay, you haven't got any arrangements in place yet, you've set up some trusts, that's a that's a good step in the right direction. Your Liechtenstein Trust, your Jersey Trust, your Swiss pension, you know, that's actually, you usually have a succession arrangement going on in relation to those structures. So that's a good step in the right direction. But everything else that you own, so your investment fund that owns a US complex, your second home in Spain, the UK investments that you've made, your assets here, the home you bought in Oxford, your Sicilian vineyards. I mean, that's a nice long list, but there isn't a framework around any of that yet to deal with succession. And as I say, the tax piece is intricately uh tied into all of that. So I would probably be saying to Gennaro, um, you know, what are we trying to get out of this? What sort of level of arrangement do you want to make if you think you're actually only going to be in the UK for another three, four, five years, perhaps? And in my experience, you know, the fact that a client has complicated affairs doesn't mean that they actually want to spend a lot of time and money sorting out their succession arrangements. So the time frame relevant to this is important. But at the end of the day, Gennaro needs to end up with a will, oversimplifying it, but he needs a will or two that are going to direct his personal assets where he wants them to end up. Um and with Matteo's help, we would between us set out to work out where that will ought to be and any limitations that might apply to it. So when I'm when I'm approaching this, I'm I'm looking at identifying where the assets are and the existing structures. I've just talked about that. I'm then needing to work out the main connecting factors with the different countries. So we get into considering domicile. So domicile is now not relevant for tax, but it's still relevant for succession planning. So I would say Gennaro's not domiciled in in England. He's definitely intending to be somewhere else. He definitely comes from somewhere else. So he's probably not domiciled in the UK. He doesn't have British nationality, I don't think, unless I've read that wrong. He so he's not a British national, but at the moment he is habitually resident here. So I would then take those concepts and say, okay, bearing all of that in mind, um, how do we work out which jurisdiction is going to lead on this accession plan? And and you'd also then want to look at the long-term efficiency of the trust and the pension and the other arrangements that that he that he's got in place. So so that that's how I would approach it. Um I guess the other question that I would be asking Matthew, bearing in mind, Gennaro, bearing in mind he's got quite a complicated family life, is does he want the freedom to be able to give his assets away without any restriction? So I'm sure Matteo will tell you in a minute that they have forced airship in Italy. I think they do in Spain as well, you'll say. Then so what that means is that it could be that Gennaro finds himself in a regime where the Italian law or the French law dictates how much he's allowed to give to each of his relatives. And if he doesn't want that, then he would be saying to me, well, that's not what I want to do. How do I get around that? And and that's where um the concept of being able to apply English law to his succession um becomes quite advantageous because in England you don't have to leave your assets to particular family members. And if you ignore all of your family members, that sometimes doesn't create the right outcome. And I'm sure Jess will talk about that in a minute. But um the concept is still there in theory to enable you, in and enable you to do it. So it the only way that Gennaro is going to be able to put English law to apply to his estate is if he's habitually resident here when he dies. And we might get into it in a bit more detail, but there is some uncertainty around all of that. That's not cut and dried, that's not certain. The certain way of being able to do it would be for him to take British citizenship. So if you're a British national, you can elect for English law to apply to your assets within the EU. So I would be having that conversation with him about how important is it? Can you get another um nationality? How does how does Italy feel about that if you've got an Italian passport already? Do they do they let you have a second passport in Italy? So, and I have had clients who make that kind of strategic decision if they want the freedom to divide up their assets in a way that is not in line with the forced airship that that applies um otherwise. Um we get into a conversation about how many wills we should have and how they work together, and and maybe we'll we'll come back to that a bit later if it if it's relevant. Um, the final thing that I do with Matteo is try and work out where the areas of dispute might be. So, as I say, he's got quite a nice complicated family. He's got two sets of um children to look after, he's contemplating getting married again. So there will be balancing of different interests in all of that. Um, if he's not domiciled in England, then no one is gonna be able to bring a claim against his estate here. So, I mean that that's it, that's a that's in the tick box. That's a that's a benefit to him. I'm sure claims can be brought in other countries, but he he's not gonna, his his heirs, if they're disappointed, are not successfully gonna bring claims here. Um, he's gonna need input from Matteo on forced airship claims that might apply in Italy or in Spain if he if he ends up there. But it actually, what he really needs to do is to work out what is most important and then get his family together and help them understand why he's trying to achieve what he's trying to achieve. Because you can get loads of tax advice, you can get loads of structuring advice, but if you don't get the family on board, you're gonna spend a whole lot more money in litigation potentially. So that's me. Those are the sorts of concepts that I would be running through um with him in our very lengthy three-hour meeting.

SPEAKER_05:

Um, it's very interesting concepts there, uh, and the division of Italian and uh UK law, how that works and whether you can um do what you want to in the UK, and perhaps that will dictate how long he stays in the UK, and maybe you will apply for citizenship. Um so we've talked a little bit about tax and we've talked uh a little bit about uh succession planning. Um the next speaker is Jessica, uh Jessica Macaulay. Uh she's the principal and the founder of uh Dallington. Um that's work and that's a company that works with family offices and focuses on the next generation, so ideally suited to this topic. Um at a previous meeting here, I listened to fascinating insight into the issues uh she experiences with succession planning, uh, which isn't too surprising as Jess is a psychologist, psychological consultant, and also a mediator. Uh so I'm really looking forward to listening again to what you have to say, Jess.

SPEAKER_07:

Thank you. So, well, I think Liz, what you just said at the end there really captures it, which is you can do all of this wonderful technical work, but if you're not equally balancing the human dimensions, then it will fall flat. So it's really important to balance those two things. But my gosh, there are some landmines here. So just to reiterate, on a personal level, he engages a family lawyer as Maria's pressing Gennaro to get married, once bitten, twice shy, so he is considering a prenup. He's also concerned that his two sons, adult sons, can benefit from his wealth after his death, and that harmony reigns between them, Maria and Julietta. I mean, there's quite a few potential uh bombs there. And the questions and the conversations I'd be having with him really are about his relationships and the quality of them and how he wants to support those relationships in in these discussions. The other half of this is about preparing the next generation, and that means both practically and personally, you really can't prepare the next gen. And and for that purpose, I think I mentioned this in the last um talk. That can be any age. We don't know exactly how how adult his two adult sons are, but he also has a uh has Julietta, his little daughter. And so the work that he does in understanding how to prepare his two adult sons will eventually also impact his daughter. So he is doing it for a wide range of ages, and I'm assuming Maria is also hopefully getting involved in that. So getting a really rigorous education system set up for them, financial beneficiary, the vast majority of beneficiaries have no idea what it means to be a beneficiary of a trust, what their roles and responsibilities are. They haven't had basic financial education, and just because they've been around wealth, there is this assumption that they are comfortable with it and with the language of it. And it's really about empowering them to be able to sit in those rooms because we can sit in this room together for this important three-hour meeting. But again, like Liz says, if we're not able to translate that language of succession and wealth and a trust, it won't actually land. So we have to empower them with all of that and with that language.

SPEAKER_05:

The meeting won't last three hours, by the way.

SPEAKER_07:

Oh, sorry. Um I I think another really important factor to mention here is that founders and businessmen like Gerano are exceptional human beings when it comes to business and to making money and seeing things other people don't see in terms of taking risk and making a business. Usually, in my experience, doesn't make them exceptional when it comes to family life and relationships. And it's not to shame them for it. We can't all be fabulous at everything. Some of equally some of the best um nonnas, let's think of it if we're using that Italian, the nonnas aren't going to be the CEOs of the boardrooms. We all have our strengths, but therefore, he does perhaps need some support on how to manage these more personal, delicate conversations because he's probably never had some of them before. So I would also be asking him, what are some of the tricky conversations you need to have? Um, I guarantee you everything that we have on here on this case study is probably more information than his sons have ever seen. That's often the case that I see is that the family members are really left in the dark until the last minute, and it's about you know giving them a lot more information. Um, so we're talking about prenups, letter of wishes, potential, charter, constitution. As I think I said last time I was here, those are all wonderful, but the process is so much more important than the outcome. Um, maybe you'll all disagree with me on that. Um but the process of writing a charter. Of him having his vision with has to be with his sons, with Maria, with whoever whoever is going to be involved in that process. Because if he writes it with his lawyers and then gives it to his sons, they have no incentive to hold to uphold it. So I think the process is what's really, really important. Um I I really could go on and on, but the the the core message here is my role here would be about relationship risk. So I we're all managing risk and looking about what are the potential landmines coming up in the future. There will be human risks within the family dynamic system that we need to really think about and see how we can support.

SPEAKER_05:

Thank you. I'm listening with wrapped attention. Um, it's very personal as well because you know we've all got children, and uh how much one engages with one's children is quite interesting. Um we'll come back to that, I'm sure, in some of the questions and uh and so on. So we now come to our international uh specialists um and friends, uh both very good friends and and um members of the IBSA Club since we started. Uh the first is uh Jose uh Aguilashea, who's a partner in the tax strategy and benefits practice in the Madrid office of Asquar Patan Boggs. Um he's going to advise Genara on various international aspects of his of this case study, uh which includes the US investment and New York uh office and the possibility of his future Spanish residence uh and what that may mean for his accession planning. We were saying that there are a lot of people leaving the UK. It's not altogether always the best place, you know, to go to uh where you think it's going to be uh nirvana for you. Uh there are pitfalls in other countries as well. So it's not just Rachel Reeves that we're escaping.

SPEAKER_02:

Of course, thanks for that. It's a pleasure to be here. So, I mean, one of the first things that I mean I have that feeling over the last year that like Catvisor with all these changes, right? And I I mean I just want to make sure they can get worse, right? I mean, one of the points that we're discussing is that I feel like Spain's one of the primary well, like wealth tax discussions that you have. Like everyone 10 years ago came in Spain in 2008 as a temporary tax. You count the years, we'll still have it in place. And the truth is, like it wasn't like a left wing coming in. Now I do see that this is a trend. Not sure if you heard California just approved or proposed a wealth tax at 5% over 100 billion. So, I mean, we got last week I had a meeting with someone who was moving to Spain, and it was like such a frustration on the cell phone because wealth tax, everyone is willing to pay income tax in a way, right? Make money you pay. But wealth tax, it's still hard to kind of analyze whether the fairness of however money you make, why am I paying wealth tax? Just having money, it's not a punishment, right? So there is, and and I know, I mean, and I'm raising this because this is gonna be a trend going forward. I mean, if you look it up, and again, I was sharing with Roy in September, there were some proposals within the OECD to establish a wealth tax globally. And I mean, right now, the few countries that have uh wealth taxes, Switzerland in a very limited way, Spain, Norway had it, they put it down. Now we see like a lot of Latin American countries putting it in or at least bringing it into discussions, especially in the fact that now the way the wealth tax could be generally introduced is by multilateralism. Now one wants to set that fear that authorities are gonna kick people out. That's not something that you're looking at. But in a way that that could happen, European Union gets together, OECD comes together and says, you know what, why don't we tax people that have more than 10 million or 100 million, right? And they start there. So that's something that it comes through. And my link to what discussions that we have is that sometimes even in Spanish, we have people say, Well, I have 20 million and multiply up because wealth tax goes from 0, 2% to 3.5. So people just do the generally thing like I have 100 million, I have to pay 3.5 million a year, and there is a lot of planning behind that in succession planning because it applies individually. You can set up businesses, businesses are mostly extended. So, I mean, I'm trying to use the fact that we've had it for some time and there's a lot of planning around it. Like, I mean, I don't know if it's not, you know, a month you'll say that's the richest person in Spain, right? And he he's a billionaire, he has like a more than 100 billion. And if you make the map, people ask me, like, okay, I see that Well Texas is 3.5, so 100 billion means he's paying three, I mean, 3,500 million a year because of his wealth. And that's not the case because there's many World Texas and there's many wealth planning around that. So, I mean, I always like to put it, this is an opportunity for advisors, it is, so we'll have work going forward because this is a trend that it's gonna hit. So, I'm saying this impact that the UK market, everyone saw it as okay, this is the beautiful place to come. I mean, not sunny wise, I think Spain would read it, but the way that tax is structured, where it was an attraction place, and I mean, probably this this year that you've had more people go out than come in, right? And you still want to have it attract. So we have that that fight over time that I like to compare, like you see, they're carried in the stick. I mean, I can tell you how bad Spain is now tax-wise. Then next time over, we'll discuss about special tax review. So the same government is kicking people out in a wealth tax, and then it's attracting people in in a special tax regime where you only pay tax on Spanish source income. So, how is this working out? Like I always say, people want to tax the people that are in, but then you want to bring tax revenue from others. So, countries are kind of getting consistent in a way that we want to fight people, we're gonna attract people that are paying taxes in UK, bring them here, then we're kicking people from staying to go to UK because they don't have wealth. So, this is something that is gonna come forward in a way that you're gonna need to set up not three hours, you're gonna need to see them in three hours a week with your lawyer. So, I mean, but anyway, I'll be because and I always laugh about this because when all the changes of of the BEFS came through the OECD, you know, there was some like international tax advisors at the end of it. I'm really up to I'm an optimistic person. Everything that when it comes complicated, you know what, it's gonna give us there's a lot of planning around that we can cover that family offices and so on, but there is there's planning ahead, and that's the tax like how it's going to be. So I think I'll stop right there because it's an idea of how worse can we get.

SPEAKER_05:

Thanks, Ose. Um, yeah, the grass is greener, that's what it always seems like. Um, so finally we have uh Matteo, uh Matteo Rapinesi, uh, who is an Italian lawyer with his own firm Oisea Family Office. Uh he works in Milan and Verona. Uh, and he's very involved, I know, in the past with MA transactions and international tax planning, uh, but now much more, I think, on the private client side. Um, and his focus today will be on Gennaro's exodus from Italy to start with, uh, and his potential return to Italy in 10 years' time. Matteo.

SPEAKER_01:

So um, good evening. So uh for uh Gennaro in terms of exiting the country or coming back, the situation is quite simple. So the point of leaving the country or coming back is quite easy for Gennaro because we don't have the concept of exit tax. And we do have four specific cases which do not apply for Gennaro. So the for him, the taking the decision of going out and coming back is really no uh is not raising any issue from a tax point of view. In terms of international uh succession planning, the situation, as you said before, is a little bit more complex again, and I suppose it could appear a little bit surprising from a tax perspective. In terms of taxation, I have to say the general that he has to be happy because in our country we are not a zero jurisdiction, but close to zero jurisdiction in the sense that we have a one million euro threshold for each family member above that is zero. So at this point in time, in terms of taxation, Italy is extremely uh convenient. I'm saying today because my feeling is that the pressure at the level of the European Union is becoming more and more strong. Uh Spain, France, Germany, the Netherlands, Belgium, they are not happy. They're not happy, especially because of the EU regulation, we will talk afterwards. And so there is a massive pressure over the government to change and improve uh the inheritance tax. I don't know if this will happen or not, but I'm pretty sure that one of the reasons why very recently the tax authority has basically confirmed the fact that any asset which is transferred into the domestic trust is free of tax and is a sort of protection for the future. So, in other words, if today an individual transfers his assets into a trust which is ready in Italy, there are no taxes at all. And until the point those assets are transferred to the beneficiaries, and as long as the beneficiaries do not have vested rights, it remains in suspension. So this is a form of protecting if in the future something will happen in the sense that the change the law could change. This is from a tax point of view. In terms of planning, uh the thing is, I think is much more complex. And I think that Gennaro has to consider a couple of things. The first one, of course, is the force airship. Uh is extremely tough, extremely strong in our country, and the room available to individuals to dispose his assets in a different way is very limited. In this specific case, the two sons from the previous uh marriage and the new baby, the daughter, they are considered one of those that fall within the false highship. And Maria, if you remember correctly, the name, she would like to get married. I'm happy for her, but he has to consider that once he became married, then she will be entitled to the false highship as well. And so this will make the things much more complicated in terms of uh planning. The rule is extremely strict. So any agreement that is made in life relating to the transfer of assets after the death are void and null from the origin. So even though today I wish to make a decision in order to split my assets in a way that I think appropriate, I can do it. But the point is that then will I pass away, these agreements will be void and null. There is only one single exception that I will tell you later that could be interesting for him because in terms of the quality composition of the assets, the general situation is a bit different because he has some cash and cash equivalents, he has some real estate, but he also has businesses. So he has to understand whether he wishes some of the family members to continue that activity or not. And if things that one or more are indicated to take over the business, then in that specific case, subject to a specific law, he is entitled to leave that specific activity to one single member, and the other family members will have to be compensated. We are not talking about taxes, we are just talking about how to plan the distribution of the assets after he is the fact that he will be moving to Italy to UK uh could be helpful depending on how he thinks appropriate to distribute the assets, not in terms of quality, but in terms of quantity. Because, like we, as you said before, in UK you don't have the force highership, like in the US, in many other countries. And again, there might be that in accordance with the European regulation, he might find some option to have a different distribution in terms of quantity to the family members. And this is completely allowed by the EU regulation, even though the country is not part of the European Union, because it says that any third country can fall within the scope. I mean, this is very technical, so I don't know when when you would like to discuss, but making a long story extremely short, what I can say that at this point in time, from a tax perspective, Gennaro is in a very good position in Italy. Nobody knows about the future. If we want to protect for the future, maybe the trust is something that he should consider. In terms of quality distribution of the assets, there are some opportunities if it is a priority. In terms of quantity distribution, as far as the Italian law will be applicable, he will be stuck in a situation with no basically choices, but he could benefit from some potential alternatives.

SPEAKER_05:

Thank you, um I think presumably a cleanup agreement that um talk about maybe now, um that wouldn't be that wouldn't avoid uh the succession. If we had a cleanup agreement during his stay in in the UK uh before he he uh marries Maria, once he goes back to Italy that's ignored. Um Liz or or just talk a little about uh a cleanup agreement and the relevance of this arrangement and and what would what would come within that sort of cleanup agreement?

SPEAKER_07:

I I'm going to defer to Liz because I generally I'm looking at the I end up looking at the aftermath of the cleanup. So it would be very helpful to hear Liz's take on this first.

SPEAKER_06:

I think the starting point, there's two starting points. The first one is unfortunately I'm not a family lawyer. So I'm gonna I'm gonna look into the audience and and and lean on colleagues and friends to to fill in some gaps. But uh, in my very limited experience, and someone who knows more than me, do stop me when this uh um having a prenup is absolutely the right thing to do from an English law perspective. Okay, so if you don't have one, you could be really quite screwed for want of a better expression. If you have one, and undering it's put into place with all parties making full disclosure about what they own, and the parties to the marriage being independently advised, and the prenup being fair and making adequate provision for everybody. I'm looking at Iona so she's nodding. So then if if all of those criteria are fulfilled, there is a reasonable chance that an English court would uphold a prenup. Um, I guess the question that we then have to ask ourselves is how far does an English prenup take you when you've got all these other jurisdictions in in the mix?

SPEAKER_07:

I just add, in terms of um thinking about prenups for the the boys and the eventually maybe his his daughter, his young daughter, introducing the concept of prenups at a much younger age in an age-appropriate way is really, really important if you landed on somebody in a week before their wedding and they haven't had the right time to process it and ask questions and why it's a real disservice, and you actually get them on side if you can really help them understand why it's there, especially if they are also the inheritor, because take this how you will, but it's not their money necessarily. And the the parents will feel quite differently about a prenup for themselves versus you know, it's really important for their children to have them because they want to protect this money not just for their children but for their grandchildren and so on and so forth. So I think really again, uh you know, communicating about these topics at a much younger age is is important. Rug with January with Maria about the prenup. Well, quite transparently, I wouldn't. I wouldn't be the person who's bringing that up. I'm not the that would always usually start with the lawyer um suggesting it, and then I would be there to facilitate the discussion around what that really means and helping everyone feel supported in a very sort of safe environment. Um, regarding the sons, it's what comes up for them. If you know one of the topics we're going to talk about is you can have these very technically perfect structures set up, um, but they haven't been translated into sort of the human language. And I've seen some beautiful charters and letters of wishes and prenups. I'm not a lawyer, but you know, from everything I can see, they're perfect. But no one has really been communicated with. No, there have been no, you know, ongoing meetings and discussions around again the language. I know I keep banging on about it, but it's so important. Very, you know, these are unique problems and opportunities, and therefore, unique education and support needs to be given to these people by the people in the room like us. And so um, apologies if I'm not really answering the question properly, it's just so important about clarity and communication. Um, you know, the reason that these structures, wonderful structures, break down are because of unresolved conflict, sibling rivalry, expectations that haven't been discussed, entitlement, the shadow of the founder who's overbearing and controlling perhaps, um, cousins who've never met each other and expected to make decisions together. Um, the list goes on and on. So those are the sorts of things that I try and bring to the surface in a gentle way.

SPEAKER_05:

And you know, what Jess just said is that it should be developed from below almost really, but it never is, I wouldn't have thought. I would have thought it's imposed upon from above.

SPEAKER_06:

Yeah, well, more often than not, um, because the person who usually has the desire for a charter is usually the wealth creator, and the the idea behind it is to create an environment where you try to bring your family on board with a particular set of aims and values. But if those aims and values are only yours and you're effectively imposing them on um everyone else, it can be very difficult. It doesn't become a living document. So so what is it? It is effectively um a legal document. Um, well, it purports to be a legal document, doesn't actually have any legal standing, truthfully. So it's not like you can say it's not a contract, it's not a deed. Um, people are not giving anything away and entering into it. I mean, they're they're making promises between them. They don't really get sued on in the traditional sense of the word. Uh a charter of that nature you could compare with uh they're not the same, but a shareholders' agreement, for example. Now, that obviously is contractual and it's binding. And if you have a family investment company that you own with your children and you enter into a shareholders' agreement about what happens to the shares in certain circumstances, that isn't a charter, but it is, and it is a legally binding agreement between you that dictates what happens in the future. So I only give you the shareholders' agreement so you can draw an analogy between the two. So a really well-done charter is one, it still, on the face of it, tries to bind everybody to it. You can't sue anyone for not complying with it unless they've done something really bad that you can sue them for for some other reason. And really, if you can get everybody on board with the concepts and the notions and you do it collectively, it there's much more chance that it's going to succeed. But they massively vary. Some of them can be, will go as far as saying we're going to have eight meetings a year, everyone's going to wear a shirt and tie, you're going to arrive at nine o'clock, you know, we're going to have lunch at one. You know, you do get that sort of thing going on. And in comparison, you can have it where it's you know a lot more about what the family wealth is setting out to achieve, the philanthropic aims of some of it, and it's a bit more relaxed. And then they come in all different shades between the two.

SPEAKER_05:

Does that answer the question? Yeah, yeah, I mean, yes, that's fine, but it it's it's uh it's something that I think uh is very difficult, I would have thought, for a family as a group of people to be involved in.

unknown:

Yeah.

SPEAKER_07:

Yes, when it needs to be revised and yeah, updated.

SPEAKER_05:

Yes, what would you recommend during that period of 10 years from 2018 up to that period uh with the various assets that he had? How do they um fall within the inheritance tax net or how can he create things which fall outside? I mean, for example, just giving money away and the seven-year petrol for what sort of advice would you want to digitalize?

SPEAKER_00:

Depending on how much money he needs in in UK to to bring relatively unremitted income and gains to the UK. Um so you know, it's a case of kind of quantifying how much you may or may not need in the next few years and taking off the net amount of tax, but there's the opportunity there to to bring significant sums of money to the UK. Uh but as Liz said at the start, if he's in he's only gonna be here for the next couple of years, you don't want to bring too much, uh because the temporary recreation facility uh TRF, uh if you bring more on than you need, you can get it back. So there is the opportunity given the um structure and the investments and assets that he owns to bring uh various things on shore. Um in terms of um other things, um he may, depending on I mean there's there's missing information on some of the things, but depending on how long he's held the assets uh offshore, he may want to get a cost uplift and dispose of some of those assets. Um but ultimately he needs to make a decision purely from a tax perspective if he's gonna leave before before 2028 based on these dates, uh, because after that he would be long-term resident, as you say, subject to UK inheritance tax on worldwide assets.

SPEAKER_05:

Mateo, the the the um exit tax that uh certain countries have, you don't have that in Italy, I don't think.

unknown:

No.

SPEAKER_05:

But you do, I think in Spain, do you not? There was a question there.

SPEAKER_02:

Yeah. No, we we do have an exit tax which was improved into the European Union, which was that only for you said we don't have that comes to a long-term resident, but if you're taxed more than 15 years out of the 20, then you become taxable on any underlying capital gain that is generated when you leave. So that is uh, but the good part is if you're under the special tax regime, so-called Beckham law regime, the years of residency under your special regime do not count as days of residency. So at the end of the day, you can extend it past 21 years until you actually treat it under any line.

SPEAKER_05:

I mentioned that just as a warning thing. I thought that uh Rachel Reeves was going to bring in an exit tax this year, because uh most countries, I would say most countries in the EU, uh, and of course the US, uh, Canada, Australia, they have an exit tax uh for those leaving their country, uh, basically taxing them on the gains, if you like, on the as if they've made a disposal uh on their date of departure, uh, because they've made those gains during their period of residence in that country. It goes along with an entrance uplift in base value, so that uh when you come to the country, that you value all your assets then. When you leave the country, you revalue them, and the difference is what you've made in the country, and therefore it should be taxed. That's the concept of an exit tax. And I'm surprised that she didn't bring that in because so many people are now leaving the UK. Uh, but again, going to other countries that do have an exit tax, uh, if they have the entrance uplift, that's fine. If they don't have that, like for example, the United States, there's no uplift of base value when you enter the United States with your assets. So when you leave, you are subject, if you're over$2 million or whatever the figures are, uh, you leave the US, then you're taxed on the full amount, even that those gains that you made before entering the the US.

SPEAKER_03:

So uh that's just about giving up citizenship, not just about leaving.

SPEAKER_05:

Yeah.

SPEAKER_03:

So you're a US person you leave, we're not subject to an accident.

SPEAKER_02:

No.

SPEAKER_03:

If you give up your citizenship, yes, then you maybe. Yes. Or if you're a long-term green card holders, yes, then you maybe.

SPEAKER_02:

Exactly.

SPEAKER_03:

Okay, okay.

SPEAKER_02:

And just to add now, taking advantage that we're talking about the US, I mean, one of the points that we with with like private individuals, I mean, I always say US could be a tax haven, and sometimes it's a highly taxable country. And one of the points that even for non-residents is surprising is that inheritance tax for Direct assets held kicked in from six to over 60,000 euros, I mean, dollars. So I mean I've seen people just having a million dollars in shares in Apple, and they're like, I'm gonna be taxed at 40% inheritance tax yesterday leaving you. So I mean, and sometimes there's easy ways out just with a blocker company and how that works. The the only concerns that I've seen that we've done sometimes even come when Europeans move around is that when you set up these structures, it means that you have to put the financial assets in a blocker in a way that that's gonna generate a capital gain once you do that. So sometimes you not only have to achieve what are you looking to achieve, but also what's the cost of achieving what you want to achieve, right? So that's sometimes like a little challenging. And that's why now we've seen even people that are thinking, okay, I'm gonna move two years to this country so I could do this, then I move here. So now I could see like the succession planning already like cherry-picking what am I looking at going forward. So that it's an interesting approach that comes across.

SPEAKER_05:

The government hasn't yet cottoned on to the uh tax benefits that can be achieved with that treaty. Those who have been citizens of Italy and were not long-term residents of the UK or not domiciled in the UK at that time, um, they wouldn't be subject to UK inheritance tax. And I've got a feeling, I might be wrong, not even on their UK assets.

SPEAKER_02:

That's what I think is on.

SPEAKER_05:

Yeah, so that that's the that's very interesting.

SPEAKER_02:

A bit of a weird one.

SPEAKER_05:

Very weird.

SPEAKER_02:

Italy in UK.

SPEAKER_05:

Yeah, that might be something that uh might be relevant for for Gennaro when he uh thinks about that, because actually that is the situation here. Um what about the you mentioned this the succession uh EU succession rules? There is a regulation, 2012 or something, um, of the EU, which is uh relevant for Janau, I think. Um that's sort of, I mean, the the UK is not part of the I don't think you can think the UK is part of that regulation. So it's it's not.

SPEAKER_06:

No, the UK is a third state for the purposes of that regulation. Always has been, and the fact that we had Brexit made absolutely no difference to that whatsoever.

SPEAKER_05:

Okay, so how does that impact on this?

SPEAKER_06:

Well, it it the EU succession regulation, without going into more detail than you need, is all about achieving a unified succession arrangement within the EU. And it is it is designed to simplify succession arrangements. But the the UK, Denmark, I think it was, didn't sign up to that when it was brought in in 2015. So, therefore, like other countries like you know the US or Kenya or wherever else you want to choose, they they remain third states, but they're still impacted by it. So the way it works for the UK is that um you can the the regulations allow uh uh Woodanao Gennaro, if he was a British citizen, had a British passport, to elect to apply for English law to apply to his whole European estate. Okay, and Italy, Spain, in our examples, are required to recognise that election, okay, um, which means that we can Gennaro, if he wants to apply English law to his estate planning and avoid forced airship, can rely on English law to do that. And has to be a British citizen. So if he is not or habitual resident, so it it to make that election for English law to apply, he has to be a British citizen. If he's not, let's say he doesn't get a British passport, but he dies habitually resident in England. Um it can st English law can still apply to his estate, but I can promise you that his heirs, if they don't like that outcome, have a much, much greater chance of challenging that situation than they would if he took citizenship and then made the election. So that so relying on habitual residents if you want certainty is not the right thing to do. There are obviously other downsides of taking English citizens, British citizenship. So I'm not saying that's a you know a silver bullet solution, but it absolutely is something that Europeans um who live here and are in his type of scenario do take advantage of. I mean, there is a reaction within Europe, certainly France and Germany are particularly unhappy about that. And I think Italy feels very strongly about it.

SPEAKER_01:

Completely I have seen several cases of French people making use of the Euro regulation, and France, of course, is completely upset about this.

SPEAKER_05:

Yeah.

SPEAKER_01:

Because we all know how the situation is about inheritance tax. I can add you one thing that, of course, Gennaro is a provocation, what I'm saying, but it's grounded. Uh, British passport is, of course, complex to get. But the dual nationality, so the second passport in terms of investment nationality is much easier. And provided that the assumption of the EU regulation is to simplify on an universal basis the accession planning, there is a strong debate on whether or not Gennaro could, in principle, entitled to get an investment nationality, let's say one of the Caribbean, choose whatever you want, and is a dual national, and then by choice, so as a called Professor Yuri, in the will, he can simply say, I want my succession to be regulated by the law of my second nationality. And the European EU regulation provides a principle according to which it has to be respected, has nothing to do with taxes. We are not talking about taxes. So the succession, so Gennaro, let's assume he is fiscally resident in Italy, so he will remain subject to the to the Italian tax legislation, but as a whole, the succession will be governed by the law of the second passport. And this is in compliance with the European regulation. The point here is that the regulation provides that this can be challenged if there is a fraud, but of course, this is not a fraud because it's a genuine nationality, or if the choice is against the public um measure of the country. So the question goes both on a very high level, whether or not, for example, for Italy, false hairship is considered part of our constitution. I don't have the answer, of course. Uh, but the question is there. If the force hairship is to be considered as part of the constitution, so something as a public force, then somebody could argue that general decision to have a second nationality by investment cannot be respected, can be overrided. If it is not considered as part of the public order, not part of the constitution, then it can be not overrided. Those who are sustaining that is not part of the public order are relying their thesis about the law that I said to you before. There are already in our country some legislation that comes to override the false shareship, and is the specific agreement that I told you before, we call it Family Act. It's basically an agreement made among the family members where the narrow will say, okay, I'm going to leave the Sicilian why not SPA to one of my daughters, and the other one will be compensated because they will be receiving the family home or I don't know, the the other cash investments. If this agreement takes place and all the family members are in agreement, then this agreement can override the force hairship. So in favor of the thesis that anyone is free to choose the second nationality, even if the purpose is in fact to override the force hairship, is based mainly on this kind of assumption.

SPEAKER_05:

So one of the things that I was thinking of when I was preparing the idea of this topic is if a UK person um leaves the UK, as many have done, and they go and live in Italy or they go and live in Spain, are they going to be governed by forced airship and when are they going to be governed? Presumably a temporary resident is not going to be governed by forced airship, but if they stay there for a certain length of time, they could find themselves within that regime.

SPEAKER_01:

This is a question also for you. I don't know if a British citizen is subject to the EU regulation.

SPEAKER_06:

So in that scenario, because it's only national or Britain, no? Yeah, yeah, correct.

SPEAKER_01:

So it doesn't fall within that scope, no, no, it doesn't.

SPEAKER_06:

And your British citizen can always elect for English law to apply to their estate. So they've always got the ability to so uh but asking that question slightly differently, um, what is it that causes, forget the British nationality, what is it? What's the connecting factor to Italy that causes forced airship to arise? Is it is it citizenship or is it habitual residence? Citizenship. Citizenship. So having your Italian passport, yeah, it opens you up to forced airship. But if you've then got another citizenship, you you you might have choices.

SPEAKER_01:

Yeah, it depends on where you are resident. I mean if you are Italian with single citizenship and you are resident there, yes, for sure.

SPEAKER_05:

Yeah, yeah. Okay. But those who want an EU passport for ease of getting through border control and things like that, uh, and they uh and they get an Italian passport, for example, then they go and live in Italy, that could be a problem for them.

SPEAKER_06:

Yeah, well, that sounds like it.

SPEAKER_05:

I'm just the idea of this is that you know the grass isn't always greener, as I said before. Um Jessie, one of the things that came out in our previous meeting here was some of the problems that you've experienced um between families. What's the most common problem? Is it is it just is it money? Is it um somebody being thought of um preferentially by one's parents you know compared to uh uh how they would like to be considered as equal with their family? You know, that sort of idea. So what sort of is the most common problem you come across?

SPEAKER_07:

There are lots, um, and it actually really can depend also on the generation of wealth, so they differ. I like to think of money, and you might think of all me as being just the woo person who says something a bit emotional, but I like to think of money as a magnifier and it really magnifies what's already there, good or bad. And therefore, if you have somebody who is naturally already maybe, you know, quite uh grounded in family values, um, their money often only you know magnifies that. But if you have somebody who's come from quite a challenging or dare I say traumatic childhood and are escaping that by by their work and by creating more and more wealth, that will come out in other ways in the future. Now, I think the the big one is raise your hand here. Is anybody in here never had um conflict? Raise your hand if you have never had uh a conflict with a family member. That's very funny. So we must expect conflict. We we must expect conflict. Conflict is normal, we have conflict with ourselves, with others, but we we we are not really taught how to deal with conflict and how to understand that someone's version of conflict may be complete avoidance. That is still their way of dealing with conflict, which is to hide and suppress someone else's maybe very reactive and explosive. And it's really important to understand how different individuals, and this isn't just in families, it's in our businesses, in our life, how we all deal with conflict and trying as best as possible to support and understand that. So conflict is the main one. Sibling conflict is very upsetting, um, especially for parents, really, really devastating. And that often comes up when they feel that things, decisions have been made unfairly or that people are getting preferential treatment. Um, and so having, you know, those issues, those issues really come up. Further down the line, when you've got multiple generations, one of the big issues is cousins that, based on how we all live now, may live in multiple different countries and really don't have that much crossover and haven't really spent any time together. But if there's a family business um still at play, you've got suddenly maybe 12 individuals in the range of 16 to 40 who are being asked to come together and really gel and bond and get on and like the constitution says, turn up and have a meeting and respect each other, but they don't know each other. So you've really got to try and nurture those relationships as well. So as I keep banging on, relationships is key. And then one other really important factor to remember is culture. You know, wealth is a culture. Um for all of you who work with first generation wealth creators, typically, statistically, they will come from a more working class, lower income background and have made it, if they have made that significant wealth, they will have made it in their sort of 40s plus, not this, you know, um younger sudden wealth tech boom that we're seeing more now. And they they've grown up in a different culture to the ones their children are growing up in. Their children are growing up in an upper middle class, maybe, you know, um private-gated community, private school educated, nice holidays, tutors, safety nets, private healthcare, all of those things. And one of the big conflicts I see is when parents get to a point and they go, oh God, I this isn't how I meant to bring them up. I wanted them to have all the things I didn't have, but I also wanted them to be really gritty and entrepreneurial and resilient, like I am. But I've I've made everything really easy and now there are problems. And so those sorts of things really addressing that um cultural balance as well.

SPEAKER_05:

One final thing that I would less like to cover is uh what happens if Gennaro uh loses capacity really to decide his own fate or decide the fate of his uh family. Um, Liz, what would you suggest uh uh that he thinks about, or he doesn't think about because he's losing capacity, what should be done before that happens?

SPEAKER_06:

It's the other great concept, isn't it? We've talked about his death, and now we're gonna talk about him being able to make decisions for himself. So um, I mean, it the the answer on the English side is really relatively straightforward. He can put lasting powers of attorney into place. Those lasting powers of attorney are only going to cover, have sort of jurisdiction over his assets located here. So that's gonna sort out the home in Oxford, Sicilian Vignards Limited, how the shares are um, you know, his ownership of the shares would would be covered by that, then that the decision making around it, cover his UK investments, so our investment manager should recognise it. It's not gonna touch his second home in Spain, and it's not gonna cover off any of the assets that are in the trusts. So um absolutely get one, but choose your attorney really carefully. Try not to choose someone who's got inherent conflicts about the way these things are dealt with and decisions that might be made, um, and find out what you need in Italy, Spain in order to plug any gaps.

SPEAKER_05:

Do you have uh lasting powers of attorney uh in Spain for people who might become incapacitated?

SPEAKER_02:

Yes, I mean we've had some issues, and I was just right when you brought that in. We had a weird situation. There was a California resident, German nationals moved to Spain for a temporary home, and there was like a prenup done at the end of his life. Obviously, this was second or third wife, 40 years younger than the kids that were their age. And again, the pre it was like whether the prenup actually said that she would only get a home. But there was an argument that would come up that at C there were there were German national coming to Spain, whether they were claiming, and it was a California trust, whether the residency was the key point to consider whether Spanish force hip rules would apply. And since they were married, whether C could actually claim one-third or half of what he had. So, I mean, at the end, I mean C was faithful enough to the last prenup and said, Let's take it in, I'll just keep the house. I mean, it was kind of a fair, but there was really a very strong concern by the two oldest sons of Renato here, thinking of whether C can actually now claim half of what he had at the time of death, just because he died while in Spain. So it was really a conflict in through COVID, where he actually spent a year and a half. So again, the residency domicile, now that was a big conflict. So it's really an issue there. And I mean, I as to your question, it's never a clear answer, a lot of things, because there's always uh that concept also of fairness that the court's looking at, uh whether that is fair or not, what the prenub says. And of course, Spanish courts were always would always tend to kind of protect more the Spanish widow in that way, right? So it's a careful subject to look into every time it comes through. Okay.

SPEAKER_05:

Um, well, we've sort of covered nearly all of the topics that I wanted to cover. It's very interesting. Uh, the international succession planning is it's far more complex, obviously, than uh the domestic succession planning. Um, if no one's got any more questions, it's good that uh I like to finish um within an hour, an hour and a quarter of uh we started actually, it's an hour and a half almost. Uh so um thank you very much. First of all, I want to thank uh Liz and Howard Kennedy for hosting this event. Um very grateful to you. Uh I'm delighted uh to see so many nice faces here. Uh so thank you for attending. Um, and of course, thank you to all of our panelists for uh very good insight into what Shanawa should be thinking about. Um so now we are going to uh say uh we've got drinks and nibbles, courtesy of how everything. Please enjoy that, and uh I look forward to seeing you all at the next IBSA event. Thank you.