Private portfolio restructuring prior to change of tax regime

The situation

The client is a prominent Ukrainian fintech entrepreneur with a personal net worth of $200 million.

The client held an investment portfolio with a Swiss bank, through which they traded and generated income. The client benefited from a special UK tax regime under which their foreign income was not subject to UK tax: initially the non-dom regime, and subsequently the FIG (Foreign Income and Gains) regime.

Due to a potential change in the client’s tax regime, there was a risk that every item of income from the portfolio would become taxable under UK law on a worldwide basis. Depending on the asset class, the tax exposure could have ranged from 24% to 40%.

What we did

• Worked with the client’s bank and investment manager to restructure the portfolio
• Proposed a strategy for exiting the existing investment assets and transitioning into a new investment structure
• Designed a structure that allowed the client to retain the portfolio while receiving income with minimal UK tax consequences
• Created an opportunity for the client to receive part of the portfolio income tax-free
• Preserved the ability to receive portfolio income tax-free after a change in tax residence

The outcome

Significant savings achieved: the estimated tax exposure on this portfolio could have been approximately $450k per year.

The restructured portfolio allows the client to continue generating income with minimal UK tax impact, both under the current regime and in the event of a future change in tax residence.