Cross-Border Wealth: Navigating Tax and Legal Challenges for Families

Cross-Border Wealth: Navigating Tax and Legal Challenges for Families

As your wealth grows, there’s a greater chance of it being spread across multiple territories. It’s the same with a growing family too, as the barriers to living and working abroad have significantly reduced.

But for high-net-worth individuals, holding assets across a number of jurisdictions can make it tough to comply with all legislation and avoid being stung when regulatory issues overlap.

We’ve taken a look at the wealth management challenges facing families before explaining some of the strategies for making the most of your finances.

Tax challenges

In our hyperglobalised world, it’s easy to invest money in other countries. You don’t have to hold a portfolio of stocks solely in the country you’re a resident in. Instead, you can look to take advantage of opportunities elsewhere in the world. 

However, as tax laws can vary significantly between nations, it’s important to have a sound understanding of the legislation you need to comply with. You also need to know where you stand in terms of tax because you could be subjected to double taxation.

If you don’t keep on top of any changes in the law then you may end up with some unexpected charges or even a hefty fine.

Legal challenges

Staying abreast of any changes in the law is by no means easy – especially if you don’t understand that country’s language. For example, it might be tough for you to figure out what a change in Chinese legislation means specifically for you. And if you have assets in multiple countries, it can be easy for something to slip by you.

Governments have been keen to crack down on cross-border structures set up by high-net-worth individuals – the United States has implemented the Foreign Account Tax Compliance Act (FATCA), which requires US citizens to declare assets held in foreign accounts. Some non-US businesses must also provide the government with details on who their US account holders are.

Strategies for effective management

The best thing to do is to seek advice from wealth management specialists – ideally a firm that spans multiple territories so you know they have the knowledge you need. They will be able to help with:

  • Tax planning: This is about ensuring you know where the best places to hold particular assets are. You can reduce your tax exposure and retain a greater portion of your wealth.
  • Crisis management: Financial markets can be extremely volatile, so having experts on hand to help you in those tense moments is critical. 
  • Clear advice: If you’re getting advice from multiple firms in different territories, they may not be taking the global view of wealth management that you need.
  • Winning trade-offs: Get the full picture of your situation thanks to expert insight that enables you to make informed decisions.

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