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How do you invest as an expat if you do not know where you will eventually settle?

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How do you invest as an expat if you do not know where you will eventually settle?

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Where you live and where you will settle does not necessarily influence your investment eligibility in any country. If you are looking for help from a London expat investment company Maseco Private Wealth can help with various investment management and advisory services.

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How do you invest as an expat if you do not know where you will eventually settle?

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Keira Lewis's answer: You can be located anywhere worldwide to invest your hard-earned money in almost anything. Better investment options may be possible in countries other than where you currently reside. No matter where you settle down long term, investments can be made worldwide. However, be...

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Dual Qualified Donor Advised Funds – A Tax Efficient Vehicle for Gifting as an American in Britain

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Dual Qualified Donor Advised Funds – A Tax Efficient Vehicle for Gifting as an American in Britain

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Optimize your charitable impact as an American living in Britain with Dual Qualified Donor Advised Funds. This tax-efficient vehicle provides a strategic approach to gifting, ensuring compliance with both US and UK regulations. Enhance the effectiveness of your philanthropy while maintaining financial efficiency.

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We often associate Christmas as a time for giving but there is no reason why those with charitable intentions must wait until the festive period to make a difference.

We often associate Christmas as a time for giving but there is no reason why those with charitable intentions must wait until the festive period to make a difference. Instead, as we enter the new (US tax) year, now is as good a time as any to consult with your wealth manager and tax adviser about developing a gifting strategy into your financial plan and discussing some of the tax efficient vehicles available to help maximise your charitable donations.

There are of course several ways individuals can give to others. It can be non-financial, like volunteering your time and effort to specific charities or causes or financial, like using direct gifts or special vehicles such as Private Foundations or DAFs.

DAFs, in particular, have been growing in popularity over the last few years and with good reason. They are an extremely powerful tool for anyone who is looking to gift capital to charitable causes and using a dual qualified DAF provides additional benefits to dual US and UK taxpayers. But what are they?

1) What are DAFs?

A Donor Advised Fund, or DAF, is a charitable investment fund, administered by a public charity, that is formed for the sole purpose of supporting charitable organisations on behalf of an individual, a family or an organisation. Donors can make an irrevocable charitable contribution, receive a tax benefit immediately and then allocate charitable gifts from the fund at some point in the future.

While the gifts remain inside the fund, they can be invested in a tax-free environment and so any future gains will not be subject to taxes. This, in turn, allows assets earmarked for charitable causes to grow tax efficiently overtime and ultimately ends up with more funds available to make an impact.

2) Benefits of DAFs

There are countless benefits of charitable giving in general but there are some that DAFs specifically offer:

Removes administration burden - DAFs are typically quick and easy to set up and often only require account opening paperwork to be completed (along with the standard AML (Anti-Money Laundering) checks etc) to get things started. Once your DAF is opened, the DAF administrators can relieve you of the administration duties of making donations, leaving you with more time to focus on which causes you would like to help.

No annual distribution requirements - Unlike Private Foundations, which must distribute at least 5% assets annually, DAFs have no annual distribution requirements and so individuals can benefit from the additional flexibility on timing of distributions. This allows donors to receive the upfront benefits of funding their DAF today with no time pressure on choosing which causes to support.

Small minimum investment amounts make them readily accessible - DAFs can be opened with relatively small sums (as little as £1,000 in some instances) which, compared to Private Foundations (which often have relatively high annual operating expenses), make DAFs more accessible to almost anyone with charitable intentions. The relatively small initial amounts also afford individuals to choose whether to donate a lump sum or make small contributions over time.

The choice of confidentiality - with DAFs, you have the ability to name your fund whatever you like and donors can choose whether they share their personal details with the donee or to remain anonymous.

Financial education and bringing the family together - we often see cases where families use their DAF to help educate their children about wealth, budgeting, dealing with professional intermediaries and having a positive impact in the world. Not only that but our experience is that it really helps unite many families when deciding, as a group, which charities they would like to support and giving everyone a chance to present a case for a cause close to their hearts.

Potential for UK IHT Savings - As registered charities, individuals can list their DAF as a beneficiary of their estate upon death and, if they choose to leave 10% or more, then their estate could benefit from a reduced UK IHT tax liability of 36% (down from 40%).

Ability to donate assets with imbedded unrealised gains - DAFs can accept gifts of securities and so contributing appreciated assets can allow individuals to avoid realising capital gains tax whilst simultaneously funding their future charitable donations.

As you can see, DAFs provide several attractive benefits and features for those looking to enhance their philanthropic giving. That said, when dealing with dual US/ UK taxpayers, a dual qualified DAF can provide even greater advantages that are too good to miss out on.

Benefits of using a Dual Qualified DAF

Many charitable organisations are considered to be qualified non-profit organisations in one jurisdiction or the other and Dual Qualified DAFs are charitable investment funds which are recognised in both the US and the UK. As Americans living in the UK are generally subject to income tax in both the UK and the US, there are several benefits of being structured in this way, but it stems from the fact that they can provide tax incentives in both jurisdictions. We will work through an example below but, ultimately, they allow donors to efficiently reduce the net cost of their donation and significantly boost the end contribution to the charity or cause.

An Example

Under current US tax law and practice, when donating to a US qualified charity ((a 501(c)(3) organisation), an individual can receive a US income tax deduction if they itemise their deductions as opposed to claiming the standard deduction. So, for example, if a 37% taxpayer contributes the equivalent of £100,000 into a US qualified DAF, they will have the opportunity to save £0.37 on the £ and will receive a tax deduction of up to £37,000.

Similarly, when donating to a UK charity, the donation will qualify for UK income tax relief. In addition, the donation should qualify for UK Gift Aid which will increase the value of your donation by 25%. So, for example, if a 45% rate individual taxpayer contributes £100,000 to a UK qualified DAF, the donation with Gift Aid will be £125,000 and your additional claim back from HMRC would be £31,250 (this is calculated by the difference in tax rates (45% (Additional Rate Tax Band) - 20% (Basic Rate Tax Band)) x gross donation of £125,000).

Another neat piece of planning for US taxpayers, resident in the UK and with "Non-Remittable"/ "Mixed" funds, is that you can gift those appreciated securities into an offshore account of the dual qualified DAF and not have any capital gains tax to pay on the contribution. This in turn provides a good use of funds that would have otherwise been subject to further UK taxes upon remittance into the UK.

How can MASECO Help?

MASECO is not a registered charity and so is unable to offers DAFs directly as part of our service. Instead, our key role is around:

Working with clients to help them assess their charitable goals and ambitions, whilst also making sure that they are aware of the different strategies and structures available to them.

Organising sessions dedicated to helping clients, and the wider family, explore which types of organisations or causes they want to help.

Analysing how it all ties into their wider financial and estate plans.

Once the clients have decided a suitable path forward, we can then introduce them to our network of dedicated US-UK charities that specialise in operating dual qualified DAFs. It is these charities, such as CAF, NPT Transatlantic and Prism, that can then help facilitate the family's charitable donations (ensuring that they qualify for dual tax relief) and can help onward grants be made to organizations that can make an impact in the desired areas.

By working with organisations who offer the dual tax flow-through mechanism, MASECO can help clients take advantage of Donor Advised Fund services and aid their donations to be tax effective on both sides of the Atlantic.

The Legal Stuff

This document may not be forwarded, copied or distributed without our prior consent. This document has been prepared by MASECO LLP for information purposes only and does not constitute investment, tax or any other type of advice and should not be construed as such. The information contained herein is subject to copyright with all rights reserved.

The views expressed herein do not necessarily reflect the views of MASECO as a whole or any part thereof. All investments involve risk and may lose value. The value of your investment can go down depending upon market conditions and you may not get back the original amount invested. Your capital is always at risk. This article does not take into account the specific goals or requirements of individuals and is not intended to be, nor should be construed as, investment or tax advice. Information contained in this article is based on MASECO's understanding of current tax law and legislation which is subject to change. MASECO Private Wealth is not a tax specialist. Your ability to benefit from any of the tax mitigation planning mentioned in this article will depend on your personal circumstances. The levels, and bases, of tax relief is subject to change. You should carefully consider the suitability of any strategies along with your financial situation prior to making any decisions on an appropriate strategy. We strongly recommend that every client seeks their own tax advice prior to acting on any of the tax mitigation opportunities described in this article.

MASECO LLP (trading as MASECO Private Wealth and MASECO Institutional) is established as a limited liability partnership under the laws of England and Wales (Companies House No. OC337650) and has its registered office at Burleigh House, 357 Strand, London WC2R 0HS. The individual partners are Mr J E Matthews, Mr J R D Sellon, Mr A Benson, Mr D R B Dorman, Mr H Q A Findlater, Mr T Flonaes, Mr E A Howison and Ms A L Solana. For your protection and for training purposes, calls are usually recorded.

MASECO LLP is authorised and regulated by the Financial Conduct Authority for the conduct of investment business in the UK and is registered with the US Securities and Exchange Commission as a Registered Investment Advisor.

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Tax-Savvy Giving: Dual Qualified Donors Advised Funds - Gifting as an American in Britain

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Explore tax-efficient gifting strategies for the New Year through insights from MASECO wealth managers and tax advisers. Unleash the power of impactful generosity throughout the year.

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Josh Matthews Moderates 7th Annual Private Wealth UK Forum

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Josh Matthews Moderates 7th Annual Private Wealth UK Forum

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Discover a wealth of knowledge as Josh Matthews, the esteemed Managing Partner and Co-Founder of MASECO, takes the helm as moderator for the prestigious 7th Annual Private Wealth UK Forum. Join us for a deep dive into the latest trends, strategies, and discussions shaping the private wealth landscape.

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Josh Matthews, Managing Partner and Co-Founder of MASECO, attended the 7th Annual Private Wealth UK Forum at the Landmark Hotel in London on 28th November 2023, acting as moderator for the opening session titled 'The Next 12 Months at a Glance'.

Josh Matthews, Managing Partner and Co-Founder of MASECO, attended the 7th Annual Private Wealth UK Forum at the Landmark Hotel in London on 28th November 2023, acting as moderator for the opening session titled 'The Next 12 Months at a Glance'.

The panel consisted of top thinkers and leading investors in the private wealth space, who shared their investment views about current UK asset allocation strategies and their projected macroeconomic outlook for the next 12 months. Appearing on the panel were Graham Bishop, Chief Investment Officer at Handelsbanken Wealth Management, Patrick Farrell, Head of Research and Chief Investment Officer at Charles Stanley & Co. and Sanjay Rijhsinghani, Chief Investment Officer at LGT Wealth Management.

During the panel discussion Josh posed number of questions on topics including inflation, monetary policy, interest rates, geopolitical risk and where should investors be investing, based on the current global macroeconomic environment.

The panellists discussed taking a diversified approach to investing due to the fact that unexpected global events could always potentially have an impact on portfolios and there is no way of knowing and being prepared for these events in advance.

It was also discussed that certain asset classes, including non-US equities and emerging markets equities, are inexpensive relative to historical valuations. In addition to this, small company stocks have not done well in the past year but are also trading, according to one of the panellists, at depression like valuations. At MASECO our investment approach is based on a belief in markets and, as evidenced*, we believe small companies should outperform large companies over a long period of time due to the small cap effect.

*Eugene Fama and Ken French: The Five-Factor Model

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The Next 12 Months at a Glance: Josh Matthews, Managing Partner and Co-Founder of MASECO, moderates 7th Annual Private Wealth UK Forum

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Josh Matthews, Managing Partner and Co-Founder of MASECO, attended the 7th Annual Private Wealth UK Forum at the Landmark Hotel in London on 28th November 2023, acting as moderator for the opening session titled 'The Next 12 Months at a Glance'.

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Figure out investment options for US citizens in UK, and delve into the transformational world of sustainable investing. Explore a thorough rundown of sustainable investing methods, from socially conscious mutual funds to green bonds, offering ethical investors a path forward. Come along on a journey to navigate the investing choices open to US citizens in the UK and make a good impact.

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23rd Oct 2023 by MASECO Private Wealth

When investors shift their assets from a conventional strategy to a sustainable one, what happens? What is the impact? Are companies incentivized to behave more responsibly? Do they then do so? Or do they just make glossy sustainability reports so they look good? We look at what the research shows, but first we examine the different ways that sustainable investors could make an impact.

How Investors Drive Change

A recent academic study, "The Impact of Sustainable Investing: A Multidisciplinary Review"[1], broke down the ways in which sustainable investors can drive change:

Shareholder Advocacy and Engagement

Field Building

Portfolio Screening

The Role of Shareholder Advocacy and Engagement

Many sustainable investors expect their investment managers to engage with the companies in which they invest. Engagement takes many forms, but at its core it is an effort by investors to encourage companies to perform better on a particular issue. The investors in a company are the actual owners of the firm so they do have influence over it.

Often investors want companies to be more transparent by disclosing their performance on environmental, social, and metrics. They also ask for improvement on those metrics, such as reducing emissions, or boosting employee satisfaction, or diversifying the board of directors.

Most public companies have an investor relations department. Their job is to present the company in the most favorable light possible so that it is more attractive to investors. Historically, this was all about making a financial case. But investment managers are starting to ask questions about how the company is doing for people and the planet, in addition to profits. Sustainable investment managers start with tough questions and then use several approaches to encourage companies to do better. These efforts generally start out friendly and then increase in pressure. They include, ranked from low commitment to high:

Letter-writing

Proxy voting, with an explanation

Meeting with company representatives

Group dialogue

Sign-on letter

Meeting with the board or CEO

Filing a shareholder resolution

Book and records request

"Vote No" campaign against directors

Running a candidate for the board

Lawsuit

Most companies don't want lawsuits. Most board members prefer to keep their positions. And dealing with a shareholder resolution is quite taxing for a public company. If the investor request is reasonable, most companies would rather acquiesce than fight it to the end - especially when many of their peers have already begun doing what the investors are asking. It's difficult to claim an inability to report greenhouse gas emissions when thousands of public companies already do so.

Public company ownership is usually dispersed across thousands of shareholders, few of which hold more than a fraction of a percent of the company. Investors and investment managers can amplify their influence by forming and joining coalitions. Some of these coalitions focus on direct engagement at the company level while others push for regulatory changes or standardization in disclosure.

An example of these coalitions is the Climate Action 100, an investor initiative to ensure the world's largest corporate greenhouse gas emitters take action on climate change. F700 global investors with a collective $68 Trillion in assets under management are engaged in this initiative. The size and breadth of that coalition makes it hard for companies to ignore their requests[2].

The Role of Field Building

Investing in a sustainable fund over a conventional one is much like purchasing any green product - the laws of supply and demand apply. When you ask for a sustainable investment solution from your financial advisor, they notice, and so does your bank, brokerage firm, or custody platform The sustainable investor is sending signal to the marketplace that there is demand for sustainable investment products. When more investors signal their intention to invest sustainably, investment managers launch more products in the space, making it easier for further investment: Through their actions, sustainable investors act as catalysts for others to do the same. And competition in the space leads to lower costs, creating more demand - and a virtuous circle evolves.

While sustainable investing is growing rapidly, we are still at an early stage. Sustainable investors are joining growing cohort of investors who seek positive change. The percentage of investors asking for sustainability goes up every year. The financial services industry is responding by building out more capacity for investment managers to invest in this manner.

Sustainable investors tend to pay a bit more in management fees. These fees pay for the research, the data, and the systems that go into selecting more sustainable companies. This has become a big business. Gone are the days when ESG research was done primarily by nonprofits, academics, and small think tanks. The largest market research companies, including MSCI, Morningstar, Bloomberg, Reuters, and S&P, have bought up many of the early entrants. They have also developed in-house capabilities. As more and more investment management firms buy this research, it funds further development, thus forcing the data to get better and better. Five years ago, a minority of public companies reported their environmental, social and governance performance. Today a majority do, so it is easier than ever for investors to make distinctions between companies on sustainability performance. This has important ramifications for those companies.

The Role of Portfolio Screening

Portfolio screening is the process of including or excluding certain companies from investment portfolios based on certain metrics. Conventional investing focuses on financial criteria, like the company's size or relative valuation compared to others. Sustainable investing uses those financial criteria as well, but then adds screens for environmental, social, and governance issues. Screening is a way to raise or lower the demand for a company's stock.

The earliest sustainable funds focused on negative screening. They would exclude companies that violated certain principles like human rights, fair treatment of workers, or that operated in certain business lines, like tobacco or weapons. Today negative screens can be quite sophisticated, and include ways to eliminate companies that are highly exposed to climate risks like sea level rise or drought, or exclude the set of companies that have the highest emissions per dollar of revenue in their sector.

More modern approaches now include positive screening. This approach seeks to include companies in portfolios if they are doing certain things well. Fund managers might seek out companies that are reducing emissions the fastest, building renewable energy capacity, providing a great place to work, or fostering healthy communities.

Companies that score well on environmental, social, and governance criteria are increasingly rewarded by being included in more portfolios. This increased demand can lift their stock price. On the flip side, the companies that score poorly are punished by being excluded from more portfolios. Their stock prices can suffer. Academic studies that research these effects show some correlation between better ESG scores and higher stock prices. These 'cost of capital' studies might not be able to prove causation, i.e. that it was the higher ESG scores themselves that caused the higher price, rather than other factors. But the implication is clear for company management. If they want more investors, they should perform better on sustainability. If they are laggards, they will be excluded from some portfolios.

MASECO's Approach

There is a mounting body of evidence that the sustainable investing preferences of investors are having a positive impact on the behaviour of companies, providing them with the incentive to improve lest they be at a competitive disadvantage to their peers. Companies want to be attractive both to investors, but also to employees - they need the ability to attract and retain talent. Studies show that more companies can attract a broader set of investors and a more passionate workforce when they go sustainable. These findings provide further support for the trend toward increasing shareholder activism related to sustainable investing objectives.

With that said there is also evidence that some SRI and ESG funds do not appear to walk the talk by investing in more sustainable companies. This raises questions about what exactly buyers of self-labelled ESG or 'socially responsible' mutual funds are getting in exchange for higher management fees. The bottom line is that investors should perform a thorough due diligence on a fund before considering investing.

This is what we do at MASECO. Our starting point is that our sustainable fund choices cannot compromise on financial performance. We expect their returns to similar or better than conventional funds. Then our due diligence process makes sure we are not investing in funds that are greenwashing, or making claims they cannot substantiate. Sustainable investing is not a cure-all for all the myriad issues the world is facing. But we believe investors can use their voice, as the owners of companies, to encourage companies to be part of the solution, rather than part of the problem.

[1] https://onlinelibrary.wiley.com/doi/full/10.1111/joms.12957 , 18 October 2023
[2] https://www.climateaction100.org/whos-involved/investors/ , 18 October 2023

Use of information

Nothing in this document constitutes investment, tax or any other type of advice and should not be construed as such.

The investments and strategies noted in this document may not be suitable for all investors and making available the information in this document is not a representation by MASECO that any investment strategy is suitable for any particular client.

This document is provided for information purposes only and is not intended to be relied upon as a forecast, research or investment advice.

This document does not constitute a recommendation, offer or solicitation to buy or sell any products or to adopt a particular investment strategy.

Risk Warnings

All investments involve risk and may lose value. The value of your investment can go down depending upon market conditions and you may not get back the original amount invested.

Your capital is always at risk.

Although the information is based on data which MASECO considers reliable, MASECO gives no assurance or guarantee that the information is accurate, current or complete and it should not be relied upon as such.

The environmental, social governance (ESG) considerations in sustainable investing may affect the ability of product providers to invest in certain companies or industries from time to time.

Investment results of portfolios that do not apply similar ESG considerations to their investment process may differ.

To achieve sustainable investing, a product provider may need to:

1. limit the types and number of investment opportunities available to the product and, as a result, the product may underperform other products that do not have an ESG focus; and

2. concentrate investment in specific sectors, countries, currencies or companies and exclude others resulting in a product that may be more sensitive to any localised economic, market, political, sustainability-related or regulatory events.

MASECO LLP (trading as MASECO Private Wealth and MASECO Institutional) is established as a limited liability partnership in England & Wales (Companies House No. OC337650) and has its registered office at Burleigh House, 357 Strand, London WC2R 0HS. For your protection and for training and monitoring purposes, calls are usually recorded.

MASECO LLP is authorised and regulated by the Financial Conduct Authority for the conduct of investment business in the UK and is registered with the US Securities and Exchange Commission as a Registered Investment Advisor.

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Explore the transformation brought about by investors when transitioning from conventional to sustainable strategies. Uncover the real impact on corporate responsibility.

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Securing Assets & Managing Risk: A Detailed Approach Beyond the Markets

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Securing Assets & Managing Risk: A Detailed Approach Beyond the Markets

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Learn how to protect your assets and manage risk beyond the markets. Explore principle five of investing for American citizens living in the UK with MASECO Private Wealth. Click here for expert insights from our private wealth management firm.

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Securing Assets & Managing Risk: A Detailed Approach Beyond the Markets

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Learn how to protect your assets and manage risk beyond the markets. Explore principle five with MASECO Private Wealth. Click here for expert insights.

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Maseco Marketing Team Wins Double Bronze at Citywealth Awards 2023

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Maseco Marketing Team Wins Double Bronze at Citywealth Awards 2023

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Maseco Private Wealth's marketing team achieved outstanding recognition at the Citywealth Brand Management and Reputation Awards 2023, winning two prestigious bronze awards. Contact MASECO Private Wealth to learn more about their innovative strategies and successful brand management efforts for US tax advice for UK residents.

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22nd Jun 2023 by Nicola Roigard

The MASECO Marketing Team is celebrating today after winning two bronze accolades at the prestigious Citywealth Brand Management and Reputation Awards. The awards, held annually in London, recognise individuals and teams who have made an outstanding contribution to their field. This year, MASECO Marketing Manager, Georgina King, was recognised in the Career Achievement category, while MASECO Marketing Associate, Emma Chalkley, won the bronze award for Best Newcomer.

The MASECO Marketing Team is celebrating today after winning two bronze accolades at the prestigious Citywealth Brand Management and Reputation Awards. The awards, held annually in London, recognise individuals and teams who have made an outstanding contribution to their field. This year, MASECO Marketing Manager, Georgina King, was recognised in the Career Achievement category, while MASECO Marketing Associate, Emma Chalkley, won the bronze award for Best Newcomer.

Head of Marketing Nicola Roigard said of the achievements, "We are absolutely delighted that our team has been recognised at such a highly regarded and prestigious awards. It's a testament to our team's hard work and dedication that we have been awarded two bronze medals at this year's Citywealth Brand Management and Reputation Awards. We are thrilled to have achieved this success together."

Georgina King has been with MASECO since 2021 and brings over ten years of marketing experience. She has been instrumental in helping shape the firm's brand identity and growing its presence in the market. As Marketing Associate, Emma Chalkley joined MASECO two years ago and has made her mark on the company's marketing efforts, developing creative content strategies and managing other projects that have had a tangible impact on business growth.

The MASECO marketing team has achieved remarkable success over the past few years, with campaigns that have raised their profile. This latest award underlines the team's commitment to excellence in all areas of marketing, from creative concepts to digital campaigns. With two bronze medals now under their belt, there is no doubt that they will continue to go from strength to strength in the coming months and years ahead.

At MASECO, we take great pride in our talented team of professionals who strive for excellence in every aspect of their work. This latest accolade recognises their commitment and dedication to achieving results that exceed expectations, as well as showcasing two of the MASECO company values of 'Mastery' and the 'Pursuit of Excellence' - something we are very proud of here at MASECO!

MASECO congratulates Georgina King and Emma Chalkley on their well-deserved wins at this year's Citywealth Brand and Reputation Awards!

Image Source: https://brandmanagementreputationawards.com/

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MASECO Marketing Team Scores Double Bronze at Citywealth Brand Management and Reputation Awards 2023

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The MASECO Marketing Team is celebrating today after winning two bronze accolades at the prestigious Citywealth Brand Management and Reputation Awards. The awards, held annually in London, recognise individuals and teams who have made an outstanding contribution to their field.

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Optimize Your Investments with Tax Efficiency

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Optimize Your Investments with Tax Efficiency

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Effective investment structuring plays a crucial role in wealth management. By carefully aligning your investment choices with the prevailing tax regulations, Americans living in the UK can unlock significant advantages and bolster improved overall investment performance. The MASECO wealth managers create unique investment programs to maximize growth, protect capital, and reduce tax consequences.

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04th May 2023 by Kyle McClellan & Ollie Cutting

As both the US Internal Revenue Service (IRS) and the UK's HM Revenue & Customs (HMRC) can demand their pound of flesh from Americans residing in the UK, tax efficiency should be considered the holy grail of any investment strategy - nobody likes paying double tax, after all!

"You must pay taxes. But there's no law that says you gotta leave a tip." ~ Morgan Stanley

As both the US Internal Revenue Service (IRS) and the UK's HM Revenue & Customs (HMRC) can demand their pound of flesh from Americans residing in the UK, tax efficiency should be considered the holy grail of any investment strategy - nobody likes paying double tax, after all! To invest tax-efficiently, it is essential to appreciate that Americans are taxed on a worldwide basis, irrespective of their residency, domicile, or where income and gains arise. Coupled with the various nuances of the domiciliary rules in the UK - which were sensationalised by the headlines focusing on the financial affairs of Rishi Sunak's family - investing tax-efficiently as an American living in the UK can be challenging and potentially costly if not approached correctly.

Although toeing the complex line between US and UK taxation can be challenging, it is not an insurmountable task. To ensure your investments are structured tax efficiently, there are several key themes to understand before beginning your investment journey:

1.) If you are an American citizen living in the UK, how will you be taxed in each jurisdiction?

If you are an American citizen that has recently moved to the UK, you should familiarise yourself with the Arising vs Remittance Basis of taxation in the UK. Although it may not make for the most exciting reading, it's an exercise that can pay (literally!) dividends in the long run.

As a starting point, the Remittance Basis of taxation will only be available to you if you are a UK resident but not yet domiciled. It can allow you to shelter the income generated and capital gains realised on non-UK assets (like a US brokerage account or US rental property) from UK taxation providing you do not remit (e.g., bring the money in) to the UK. Opting for this method of taxation may not be without costs, though - if you have been resident in the UK for more than 7 years, you may have to pay the "Remittance Basis Charge" to continue enjoying this privilege, which can either cost £30,000 or £60,000 per annum depending on the length of your stay in the UK. Additionally, if you will likely need to access these offshore funds at some point whilst living in the UK, you will want to make sure you take appropriate steps where possible (for instance, income sweeping) to limit the cost of future remittances.

As the Remittance Basis of taxation allows you to shield US assets from UK taxation, it can be an incredibly useful tool if your stay in the UK is more of a sojourn rather than a long-term move. If you fall into this camp, you may technically not need to structure your US investments tax efficiently from a UK perspective. However, this should still be considered if you would like the ability to remit your non-UK assets without incurring additional tax charges.

Arising Basis

If you are an American citizen domiciled or Deemed Domiciled in the UK, you will pay tax in the UK on the Arising Basis. This method of taxation exposes your worldwide income and capital gains to UK taxation. If you fall into this camp, your non-UK assets would automatically fall into the scope of UK taxation and need to be structured tax efficiently from a UK perspective. We believe that most Americans will end up paying tax in the UK on the Arising Basis after being in the UK for more than 7 tax years as paying the Remittance Basis Charge often doesn't make sense when also taking the requirement to pay worldwide US tax into consideration.

US Taxation:

Fortunately, or perhaps unfortunately, depending on how you look at it, the US's method of taxation is easier to understand. If you are a US citizen (including accidental Americans), you are required to report and (potentially) pay tax on your worldwide income and gains irrespective of your residency.

2.) If you are taxed on the Arising Basis, are your investments structured tax efficiently in both jurisdictions?

a. We and many of our fellow counterparts in the industry have written copiously on this topic. If you are interested in learning more about tax-efficient investments for Americans, please read:

https://masecoprivatewealth.com/insights/all
https://masecoprivatewealth.com/whitepaper

3.) If you are a UK resident but non-domiciled, have you considered structures to protect your offshore investments from UK inheritance tax before becoming deemed domicile (which occurs after being UK resident for more than 15 out of the last 20 years)?

4.) Are your investments held within appropriate tax wrappers that shield your investments from US and UK tax?

Although this list is by no means exhaustive, it should serve as a useful basis for understanding your tax obligations and how you can structure your investments tax efficiently. As US and UK taxation can be a thorny topic, we highly recommend that you seek the advice of a specialist US and UK qualified tax advisor before making any investment decisions. If you would like to be introduced to a tax advisor or discuss any of the topics this principle touches upon, please contact Kyle McClellan or Ollie Cutting from our Private Wealth team.

Please email masecocommunications@masecopw.com to receive a copy of our Principles of Investing whitepaper in advance.

The Legal Stuff

This document may not be forwarded, copied or distributed without our prior written consent. This document has been prepared by MASECO LLP for information purposes only and does not constitute investment, tax or any other type of advice and should not be construed as such. The information contained herein is subject to copyright with all rights reserved.

The views expressed herein do not necessarily reflect the views of MASECO as a whole or any part thereof. All investments involve risk and may lose value. The value of your investment can go down depending upon market conditions and you may not get back the original amount invested. Your capital is always at risk. Information about potential tax benefits is based on our understanding of current tax law and practice and may be subject to change. The levels and bases of, and reliefs from, taxation is subject to change. The tax treatment depends on the individual circumstances of each person and may be subject to change in the future. MASECO Private Wealth is not a tax specialist. We recommend that anyone considering investing seeks their own tax advice.

MASECO LLP (trading as MASECO Private Wealth and MASECO Institutional) is established as a limited liability partnership under the laws of England and Wales (Companies House No. OC337650) and has its registered office at Burleigh House, 357 Strand, London WC2R 0HS. The individual partners are Mr J E Matthews, Mr J R D Sellon, Mr A Benson, Mr D R B Dorman, Mr H Q A Findlater, Mr T Flonaes, Mr E A Howison and Ms A L Solana. Calls may be recorded for your protection and for training and monitoring purposes.

MASECO LLP is authorised and regulated by the Financial Conduct Authority for the conduct of investment business in the UK and is registered with the US Securities and Exchange Commission as a Registered Investment Advisor.

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Build Your Investments in a Tax-Effective Way | Maseco

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04th May 2023 by Kyle McClellan & Ollie Cutting As both the US Internal Revenue Service (IRS) and the UK's HM Revenue & Customs (HMRC) can demand their pound of flesh from Americans residing in the UK, tax efficiency should be considered the holy grail of any investment strategy - nobody likes paying double tax, after all!

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Expert Wealth Management Advice - MASECO

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Expert Wealth Management Advice - MASECO

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If you are looking for expert wealth management advice, MASECO Private Wealth is the ideal partner for you. Contact us today to find out more about how we can help you achieve your financial goals.

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22nd Aug 2022 by Marketing

Within this article, we share some of the benefits of working with MASECO Private Wealth.

MASECO Private Wealth is a leading independent wealth management firm that provides bespoke services to clients worldwide.

Wealth management is an important process that helps individuals and families protect and grow their assets. It involves goal setting, asset allocation, and financial planning, as well as providing guidance on tax minimisation strategies.

MASECO Private Wealth has a team of expert wealth managers who are passionate about helping clients achieve their financial goals. We offer a comprehensive range of services that are tailored to each client's individual needs.

Some of the benefits of working with MASECO Private Wealth include:

A personalised service: We get to know our clients so that we can provide them with tailored advice and solutions.

Expertise and experience: Our wealth managers have extensive knowledge of and experience in global wealth management.

Independent advice: We are an independent firm, which means that we are not tied to any financial institution. This allows us to provide unbiased advice that is in our clients' best interests.

Flexibility: We offer flexible solutions that can be tailored to our clients' changing needs.

If you are looking for expert wealth management advice, MASECO Private Wealth is the ideal partner for you. Contact us today to find out more about how we can help you achieve your financial goals.

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22nd Aug 2022 by Marketing Within this article, we share some of the benefits of working with MASECO Private Wealth. MASECO Private Wealth is a leading independent wealth management firm that provides bespoke services to clients worldwide. Wealth management is an important process that helps individuals and families protect and grow their assets.

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Global Investment & Wealth Planning For US Citizens| MASECO

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Global Investment & Wealth Planning For US Citizens| MASECO

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At MASECO, our process and fees are entirely transparent. We work alongside US families and their children to help guide them in creating and sustaining a new life without financially strain or worry.

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Many of our US resident clients have lived in multiple countries and often speak numerous languages. They have seen the world, not through the lens of the US media, but through their experience of living their life in a land that they might not call home.

This experience gives perspective and this perspective gives knowledge. It is a contrarian investor to think global when the rest of the U.S. is thinking domestic. It is a sophisticated investor to make sense of exposures when faced with assets in multiple currencies. It requires a clear-thinking investor to understand the inter-generational challenges when one's dependents span several territories.

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Many of our US resident clients have lived in multiple countries and often speak numerous languages. They have seen the world, not through the lens of the US media, but through their experience of living their life in a land that they might not call home.

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What is the best money investment in the USA for an expat?

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What is the best money investment in the USA for an expat?

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Any US taxpayer living abroad should avoid investing in any foreign collective securities that will attract Passive Foreign Investment Company (PFIC) treatment in the US. Investing in PFICs can result in a large amount of additional tax (and interest) payable, as well as added complexity for annual tax filing due to the additional forms required to be completed.

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What is the best money investment in the USA for an expat?

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John Smith’s answer: Any US taxpayer living abroad needs to first and foremost ensure that they steer clear of investing in any foreign collective securities that will attract Passive Foreign Investment Company (PFIC) treatment in the US. Investing in PFICs can result in a large amount of additio...

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LondonSports Charity Softball Match 2022

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LondonSports Charity Softball Match 2022

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On Friday July 1st 2022, MASECO Private Wealth, in conjunction with LondonSports, will be hosting its Annual Charity Softball Match for the fourth year at Wormwood Scrubs near White City. Read this article to know more.

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On Friday 1st July, MASECO Private Wealth, in conjunction with LondonSports, will be hosting its Annual Charity Softball Match for the fourth time at Wormwood Scrubs near White City. The Charity Softball Tournament aims to raise funds for LondonSports, through donations and sponsorship.

On Friday 1st July, MASECO Private Wealth, in conjunction with LondonSports, will be hosting its Annual Charity Softball Match for the fourth time at Wormwood Scrubs near White City. The Charity Softball Tournament aims to raise funds for LondonSports, through donations and sponsorship.

This year, our confirmed sponsors include Blick Rothenberg, Buzzacott, EY Frank Hirth, Everfair Tax, Frontier, MASECO Private Wealth, McLemore Konschnik LLP, The Soke, US Tax & Financial and LGT Wealth Management US.

Founded in 1986, LondonSports runs the largest and most established youth baseball and softball league. They have registered and trained over 15,000 children to play baseball and softball in over 12,000 games with their aim to give every player a chance to learn about the sport and improve their skills, whilst developing self-confidence and self-esteem. They welcome young people of all nationalities, whether they are newcomers to the game or are experienced players, and their diverse enrolment from over 130 different schools representing around 20 different nationalities makes the league a unique learning environment.

As a non-profit organisation, LondonSports relies heavily on sponsorship and volunteers. To find out more about the organisation, go to www.londonsports.com.

Josh Matthews, Co-Founder and Managing Partner of MASECO Private Wealth, commented:

"We are delighted to be supporting this charity event for another year. As one of the main sponsors, we are a strong supporter of the organisation and the work that they do and we are looking forward to holding the event together again, for the fourth time".

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LondonSports Charity Softball Match 2022

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On Friday 1st July, MASECO Private Wealth, in conjunction with LondonSports, will be hosting its Annual Charity Softball Match for the fourth time at Wormwood Scrubs near White City. The Charity Softball Tournament aims to raise funds for LondonSports, through donations and sponsorship.