BDO Asia Advisory Services

Making the right moves - BDO's Private Client Services in the UK

ASIA ADVISORY SERVICES GROUP MAKING THE RIGHT MOVES PRIVATE CLIENT SERVICES IN THE UK

KEY CONTACTS

LEE BIJOUX PARTNER - PRIVATE CLIENT SERVICES

CONTENTS

+44 (0)207 893 3327 +44 (0)797 106 8913 lee.bijoux@bdo.co.uk

INTRODUCTION

ABOUT BDO LLP

BECKY HARTLEY ASSOCIATE DIRECTOR - INTERNATIONAL CO-ORDINATOR t: +44 (0)207 893 2361 m: +44 (0)758 300 1956 e: rebecca.hartley@bdo.co.uk

WHY THE UK?

ARRIVING OR LEAVING

PROTECTINGWEALTH

MANAGING YOUR BUSINESS

BUYING A PROPERTY

SUPPORTING YOUR REAL ESTATE INVESTMENT JOURNEY

PETER CHENG DIRECTOR - PRIVATE CLIENT SERVICES

TIMELINE OF UK PROPERTY TAX CHANGES

ENTERPRISING FAMILIES AND FAMILY GOVERNANCE

+44 (0)207 893 2893 +44 (0)797 002 7015 peter.cheng@bdo.co.uk

FAMILY OFFICES

TAX DISPUTE RESOLUTION

BDO SINGAPORE

JINGRU LIU PARTNER - CHINA ADVISORY SERVICES

BDO HONG KONG

BDO CHINA

+44 (0)207 893 2218 +44 (0)758 115 0435 jingru.liu@bdo.co.uk

BDO INTERNATIONAL

BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 01

INTRODUCTION

INTERNATIONAL PRIVATE CLIENTS For private clients, the need for specialist tax advice has never been greater. All around the world, legislation and compliance is becoming more complex, and transparency is now commonplace. Our highly experienced Asia Advisory Services Group in the UK seeks to manage this complexity with our deep understanding of the UK tax system as it operates internationally, particularly its interaction with other jurisdictions in Asia with a specific focus on Singapore, Hong Kong and China. We work with high net worth and ultra high net worth individuals and families, business owners and family offices who are seeking an adviser to help them structure their domestic and international affairs in an efficient and compliant manner. We can help you and work in collaboration with other professional advisers and family offices to deliver the solutions that are right for your circumstances. You also need to be sure that all decisions are being taken to improve your global tax position, not just in a single jurisdiction. You will benefit from the close international cooperation of our Private Client teams across our network and their collective focus on delivering you exceptional service.

We are supported by BDO member firms in a number of countries in Asia, including Singapore, Hong Kong and China. We can assist with:

Pre-immigration tax planning for nationals moving to or from the UK. This includes those under the UK government’s visa programmes

Inheritance tax and family succession planning advice.

Real estate tax planning from a personal or business perspective.

Tax dispute resolution for complex offshore and onshore tax issues.

Establishment of a family office or working closely with your existing family office to provide advice on structuring and protecting your family’s wealth.

Advice on the use of trusts to hold assets.

Family governance and family constitutions.

ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 02

ABOUT BDO LLP

WHOWE ARE X BDO is the fifth largest global accountancy and business service network with over 1,600 offices in 167 countries. Our international network gives us the reach and expertise to support you and your advisers wherever and however you need it X BDO’s approach is to bring our advice to life. We advise our clients on what to do, rather than ‘what we know’, assisting our clients and their teams of professional advisers to implement our advice X Our aim is to help you effectively structure and protect your wealth. You will benefit from our wealth of experience and a comprehensive range of services, from tax advisory through to assurance and compliance. WHATWE DO X We provide a holistic approach in advising individuals, entrepreneurs, private equity executives, trustees and family businesses in all areas of personal taxation X We tailor our tax solutions to match the objectives of our clients and maximise their wealth X We listen carefully to the specific needs of our clients and work to deliver exceptional service through practical, bespoke advice, tailored to your priorities.

HOWWE CAN ASSIST X We work with individuals, their families, their businesses, investors and stakeholders, at different stages of wealth creation X We also work actively with the advisers to private clients, working with trust companies, family offices, private banks, lawyers and existing accountants to offer an integrated approach to tax planning X We deliver a comprehensive set of services, on a national and international scale with experience and expertise in tackling complex issues including the following: – International tax structuring and international tax coordination – Advice on UK anti-avoidance legislation, structuring of wealth under the UK remittance basis, tax residence advice and practical guidance – Capital gains planning, optimising tax rates and reliefs – Extraction of cash, shareholder exit strategies and investment structuring – Inheritance/estate tax and succession planning including the use of trusts – Tax efficient structuring of business ventures and funds – identifying appropriate structures, using partnerships, corporate vehicles and trusts – UK tax compliance and necessary filings with the UK tax authorities.

BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 03

WHY THE UK?

X London and the UK have one of the strongest government-led cyber security frameworks world- wide. In the latest ITU Global Cyber security Index, assessing a market’s cyber security initiatives covering legal, technical, and organisational areas as well as capacity building and cooperation, the UK ranks first amongst all global financial centres. X The UK offers a prime location for accessing the rest of the world and its strong infrastructure, good legal, educational and healthcare systems and robust business regulations ensure that the UK continues to be a leading financial centre. X Although there have been major legislative changes, the UK remains one of the most popular and multicultural jurisdictions for people looking to relocate, and with good reason. X As an alternative to the worldwide basis of taxation, non-UK domiciled individuals are able to, for a period of up to 15 years, elect into the ‘remittance basis’ regime and limit their liability to UK tax on non-UK source income and capital gains to amounts actually remitted (i.e. brought, received or used) to the UK. X With no wealth taxes in the UK, and with other reliefs to encourage business investment here, the UK is a particularly attractive relocation destination for entrepreneurs and their families. X Under the ‘remittance basis’ tax regime the UK continues to provide exceptional opportunities to wealthy individuals moving to the UK to maintain both their wealth and standard of living.

ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 04

HOWWE CAN HELP ARRIVING OR LEAVING

MOVING FROM ASIA?

LEAVING THE UK?

ARE YOU THINKINGOF COMING TOTHE UK, OR LEAVING THE UK? Whether you are moving country for work or lifestyle, acquiring or breaking UK tax residence effectively is crucial to prevent being resident in two countries and incurring unnecessary compliance and tax costs. We can provide the appropriate joined up advice and take care of all tax reporting and residence issues in the target country. Wealth planning undertaken historically in one jurisdiction should be reviewed well in advance as it may not always be appropriate in a second jurisdiction.

THE STATUTORY RESIDENCE TEST UK tax residence is defined by the statutory residence test (SRT). The SRT, while complex, provides some certainty as to when an individual becomes UK resident for UK tax purposes. Each individual’s position (e.g. each spouse) must be looked at based on their personal circumstances so detailed records must be kept to support any residence position. The SRT comprises three parts: an automatic non-resident test, an automatic resident test and a sufficient ties test. The tests should be considered in that order but as soon as the conditions of one test are met, the other tests do not need to be considered. Split year treatment Residence status is determined for tax years of departure and arrival. However, if the individual’s circumstances fit one of the cases for split year treatment to apply then the tax year of departure will be split into a resident period and a non-resident period. These rules are complex so personal advice based on your circumstances is required.

NON-UK DOMICILES AND THE REMITTANCE BASIS OF TAXATION

For individuals moving to the UK, the non-UK domicile ‘remittance basis’ regime can mean no UK tax on non-UK income and capital gains for the first 15 tax years of UK residency providing these amounts are not remitted (i.e. not brought to or used) to the UK. There is also the possibility of no inheritance tax on non-UK assets for the first 15 tax years of UK residency. There are tax incentives for investment in UK businesses. Pre-arrival restructuring should be considered when you are moving to a new country. This could include a review of current asset and investment holding structures and re-structured, to retain greater flexibility over assets and their exposure to UK tax. Non-UK bank accounts may be reorganised before arrival in the UK to maintain maximise flexibility in relation to future remittances to the UK so that they are tax efficient. It is important to plan ahead and seek early advice to provide sufficient time to implement any planning and take appropriate action. We will work with you, your family and other advisers to ensure that assets and affairs are structured in a prudent and tax-efficient way, taking into account personal circumstances and intentions for the future.

BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 05

PROTECTINGWEALTH HOWWE CAN HELP

PASSING ASSETS TO YOUR DESCENDANTS / FAMILY?

PRESERVATIONOFWEALTH?

With more complexities in family circumstances than ever before, there is an increased need for bespoke and holistic advice taking into consideration a family’s specific plans and understanding their objectives. This includes how a family may wish to grow and protect their wealth, where a family may choose to live - which can often be across multiple jurisdictions and how they intend to pass their wealth on to the next generation.

COULD A TRUST/FOUNDATION HELP? Trusts and foundations are typically used for wealth/asset protection and succession planning for families complementing these wishes under a Will. They can offer tax efficiencies in the right circumstances, however, planning is required including UK tax and local law consideration. Prudent individuals may not only wish to grow the value of their assets during their lifetime but may also wish to protect that value from claims and erosion, including taxes. We can advise on all aspects of holding wealth through trusts, including the various recent changes and consultations announced in the UK. The complexity of tax treatment surrounding non-UK resident trusts make it imperative that trusts and foundations are understood fully. With differing and, sometimes, conflicting succession and inheritance/gift tax laws in overseas jurisdictions, it is crucial to seek advice to structure the ownership or gift of assets in order to maximise any reliefs and prevent triggering adverse tax consequences. Working with other professional service providers, we can offer bespoke advice based on your and your family’s objectives and personal circumstances.

CROSS BORDER FAMILIES AND TRUSTS/FOUNDATIONS The use of trusts, foundations and intergenerational family tax planning is becoming more important for individuals to ensure wealth is transferred to the next generation in an effective manner with adequate protections. In an international context the planning becomes more complex; not least when considering different jurisdictions and their treatment of trusts/foundations. We can assist with wealth preservation plans with particular consideration to the rules of domicile in the UK. We can advise on appropriate structures which seek to achieve your objectives. While trusts can be really useful and attractive vehicles for holding, managing, accumulating assets and passing on wealth, they also attract complex legislation, record-keeping and potentially onerous reporting obligations if there is a link to the UK.

ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 06

HOWWE CAN HELP PROTECTINGWEALTH

HOWWE CAN HELP We can help both existing and new trust structures with many different aspects, including the following:

X Managing compliance, all aspects of governance and the scope of liability to UK tax of the settlor, trustees and underlying entities. This includes the available reliefs to mitigate tax liabilities and all associated compliance and reporting requirements such as accounting, financial statements and obligations under regulations such as FATCA and CRS. X Guidance on the tax implications of investments, loans or holding UK real estate and considering the impact of anti‑avoidance legislation. X Providing input on the optimum structure for bank accounts/ investment portfolios and ongoing review of income and capital gains in the settlement. X Advising on trust governance and how trusts may form part of a wider family wealth strategy. X Preparing non-UK resident or ‘formerly UK domiciled resident’ settlors or beneficiaries for a move/return to the UK. This includes winding up or restructuring existing trusts. X Advice on the ‘protected trusts’ regime introduced in April 2017 and guidance to avoid ‘tainting’ the settlement once the settlor becomes deemed domiciled in the UK. X Inheritance tax matters in connection with assets transferred to the trust and held/distributed by the trustees including changes to the definition of ‘excluded property’ from April 2017. X Succession planning with reference to the assets of the settlement and the entitlement of beneficiaries as regards income and capital. X Advice on distributions or other extraction of funds from the settlement and associated tax implications.

BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 07

MANAGING YOUR BUSINESS HOWWE CAN HELP

HOWTO MANAGE BUSINESS FROM ABROAD?

INTERNATIONAL BUSINESS Whether you are an established multinational business, or you are taking your first steps towards expansion into or out of the UK, it is important to understand the tax implications of managing a different jurisdiction including how employees should be moving between countries with minimum disruption for both you and your business. For non-UK incorporated companies, we can advise on best practice to ensure the company does not inadvertently become tax resident in the UK if, as part of the expansion, you will be relocating or spending more time in the UK. We can also advise on how your remunerations from the company in respect of UK and non-UK duties would be taxed. Our employment solutions team can help ensure that both the business and employees are fully compliant with their tax and social security obligations in both the ‘home’ and ‘host’ country. The team can advise on: X International payroll set up and employment tax compliance for expatriate employees X Development of international mobility policies and tax-efficient assignment structuring X Employee benefits and tax return work in respect of the expatriate employees X Accounting, book keeping or any audit requirements.

ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 08

HOWWE CAN HELP BUYING A PROPERTY

PURCHASING PROPERTY IN THE UK?

ARE YOU CONSIDERING PURCHASING A UK PROPERTY INTHE UK OR IN ASIA? Whether you are looking to acquire a family home, holiday home, investment in residential/commercial property or purchase/start up a business in the new country, we can advise at all stages of the process.

Typically, properties are acquired through the following structures; X Personally or jointly with family X Non-UK trust X Non-UK or UK company. The optimum structure for purchasing a property in the UK, will be dependent on the specific fact pattern and long-term objectives. This will include considering factors such as; X Is the property being acquired for occupation or investment purposes? X Is the property expected to be held for the long term or sold in the short to medium term? X Is the property expected to be rented? X Is it envisaged that the property will be passed on to future generations?

UK PROPERTY STRUCTURING Recent and proposed changes to UK taxes make it essential to seek tax advice prior to making an acquisition of a residential property in the UK in order to avoid adverse tax implications. Further, certain qualifying investments in eligible UK trading companies may be made tax-efficiently under the non-domicile remittance basis regime, under a specific relief designed to encourage business growth in the UK. For maximum benefit, advice should be sought prior to any transactions being undertaken. We will use our local knowledge and experience to provide the necessary tax advice to identify the most beneficial purchasing structure and to guide you through the reporting and compliance procedures to help make the process as smooth as possible. We can also make introductions to real estate agents, private bankers, lawyers and corporate finance experts as required. There are a number of different ways that you can acquire property in the UK, with each option having its own particular UK tax advantages and disadvantages.

BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 09

RELEVANT UK TAXES IN RELATIONTOUK PROPERTY (i) Stamp Duty Land Tax (SDLT) In England and Northern Ireland, SDLT on the consideration for the purchase of a property is payable by the purchaser at up to 17%. A different regime apply in Wales and Scotland. (ii) Stamp duty Stamp duty is due at the rate of 0.5% on the purchase of shares in a UK company, or the purchase in the UK of shares in a foreign company. (iii) Annual Tax On Enveloped Dwellings (ATED) ATED is payable annually at up to £244,750 (for the year ended 31 March 2023) where a residential property is valued > £20m and owned by ‘non natural persons’ (e.g. a company). There are various reliefs and exemptions for certain types of businesses and properties. (iv) Income Tax (IT) UK resident individuals and non-UK resident individuals renting UK property are chargeable to UK income tax (up to 45%) on the UK rental profits.

(v) Capital Gains Tax (CGT) Both UK and non-UK resident individuals are chargeable to UK capital gains tax (up to 28%) on any chargeable gains arising from the disposal of UK property. Non-resident individuals can also be chargeable to CGT on gains realised on disposals of interests in

entities holding UK property. (iv) Inheritance tax (IHT)

UK property owned by individuals can give rise to an IHT charge (at up to 40%) on lifetime gifts and on death. The value of offshore companies (broadly those controlled by five or fewer shareholders) will fall within the UK estate of non-UK domiciled individuals (and subject to IHT) to the extent that the company derives its value

from UK residential property. (vii) Corporation tax (CT)

Capital gains and rental profits of companies are subject to CT at 19% (25% with effect from 1 April 2023, where profits are more than £250,000).

PROPERTY REGISTERS In March 2022, the UK Government enacted the Economic Crime (Transparency and Enforcement) Act 2022, which brings into law the creation of a public register of beneficial ownership information for overseas companies or other legal entities that own or buy UK property. The register will be maintained by Companies House and is publicly accessible. The Government still has to set the implementation date but it is expected to happen once Companies House and the Land Registry have set up the necessary systems to deliver the Act’s requirements. UK entities already have to disclose their beneficial ownership information under the people with significant control (PSC) register. While the tests are broadly the same, overseas entities will have to provide more information than UK entities do under the PSC register.

ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 10

SUPPORTING YOUR REAL ESTATE INVESTMENT JOURNEY

WE KNOWHOW IMPORTANT OUR CLIENTS’ INVESTMENTS ARE That is why we will support you on every stage of your real estate investment journey from initial acquisition support, to ongoing compliance assistance, through to advice on an eventual exit. Our well-established team has significant experience over many years in advising those investing within and outside the Asia region on tax, accounts and structure-related issues. One team will be with you throughout your journey and this deep understanding of your business should result in a seamless and high-quality service. Whatever your real estate journey, we will be with you every step of the way.

TRANSACTION SUPPORT Acquisition advice including tax and accounting due diligence, and liaising with other professional advisers. Advice on most efficient structure from a tax perspective.

ONGOING ADVICE Tax and accounting advice on the refinancing or restructuring of your investments and any legislative changes over time.

ONGOING COMPLIANCE &ACCOUNTING ADVICE The same team will carry out and oversee the structure’s compliance needs in the UK, globally and within Asia.

INVESTOR RELATED ADVICE Tax advice for the underlying investors behind an investment.

EXIT ADVICE Tax and accounting advice on planning for, structuring and executing on exit.

BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 11

ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 12

TIMELINE OF UK PROPERTY TAX CHANGES

How up to date is your current advice? This is a dynamic area - use the timeline below to see if you need to get your advice updated.

MARCH X Companies in the

APRIL X 3% SDLT surcharge on residential property X ATED threshold reduced to £500,000 X Wear and tear allowance abolished Channel Islands and Isle of Man trading in UK land brought within the charge to UK tax X Reform of stamp duty land tax (SDLT) for commercial property.

APRIL X Election to rebase offshore assets to market value for non-domiciliaries acquiring a deemed UK domicile X Abolition of business premises renovation allowance X Corporation tax rate cut to 19% X Rebasing of ATED valuations X Restrictions of corporate interest deductions under BEPS 4 X Restriction of 25% of interest deductions for individual landlords to the basic rate X Inheritance tax (IHT) family home allowance X IHT charge on UK residential property owned by non‑resident companies.

APRIL X Non resident capital gains tax (NRCGT) charge on residential property X Diverted profits tax (DTP) X Annual tax on enveloped dwellings (ATED) threshold reduced to £1m X Corporation tax rate cut to 20%.

and replaced with relief for like-for- like replacement expenditure.

DECEMBER X First year ends of

companies required to adopt new UK GAAP including recognition of fair value movements on hedging instruments.

JULY X Transactions in land

APRIL X Restriction of 50% of

anti-avoidance rules for companies trading in UK land.

interest deductions for individual landlords to the basic rate.

2015

2016

2017

2018

BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 13

APRIL X Restriction of 100% of interest deductions for individual landlords to the basic rate X Non-resident corporate landlords within the scope of corporation tax on rental income X Final period of Private Residence Relief reduced to 9 months X Lettings relief (worth

TBC X Public register

introduced in March 2022 recording the beneficial ownership of UK property held by non UK entities – implementation date not yet known. X Residential property developer tax (RPDT) proposed to be

APRIL X Restriction of 75% of interest deductions for individual landlords to the basic rate X Extension of NRCGT to

all UK land. Disposal of Interest in property rich entities are also subject to CGT

APRIL X A 2% non-resident

introduced to target groups with annual

up to £11,200 of capital gains tax) will only be available in situations where the owner of the property is in shared occupancy with the tenant.

SDLT surcharge apply to non-UK residents who purchase residential property in England and Northern Ireland.

profits in excess of £25m – currently expected in April 2022.

X Non resident

corporates subject to corporation tax on gains X Removal of ATED-CGT.

X Rebasing of ATED valuations in April.

2019

2020

2021

2022

ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 14

ENTERPRISING FAMILIES AND FAMILY GOVERNANCE

Enterprising families come in all shapes and sizes. What they all have in common is a lot going on. This can include a successful family business, property, private equity, financial investments and personal projects such as collections or philanthropy. As a family becomes more successful, complexity can also increase. They become even busier, own more assets, the family grows and moves, encompassing more stakeholders and new perspectives. If they are going to continue together in their family enterprise for the long term, to reduce the risk of conflict arising they need to ensure that they are aligned on important topics. This might include who can benefit from the family assets and when, or whether to have a family policy on pre-nuptial agreements.

OUR FAMILY GOVERNANCE SERVICE IS DESIGNED TO HELP FAMILIES ANSWER THESE IMPORTANT QUESTIONS: X What is our shared purpose – what are we ultimately trying to achieve together? X What values will guide us? X What are we going to get out of this (and what do we need to do in return)? X How are we going to make decisions effectively and keep the wider family informed and engaged? X How can we support our next generation of family members?

HOWWE CAN SUPPORT YOU Family governance is just one of the services we provide to our enterprising families:

X Outsourcing X Tax compliance X Payroll X Company secretarial. X Financial controls X Risk advisory X Cyber X Audit and assurance. X Financial Investments X Private Equity X Real Estate X Luxury Assets.

X Purpose and values X Estate planning X Philanthropy, ESG and Impact X Next Gen preparation. X Family governance consulting X Family constitutions X Family office strategy X Policies and procedures.

X Structuring X Transitions X Exit planning X Valuations.

X Structuring and tax X Due diligence X M&A X Restructuring.

X Personal tax X Dispute resolution X Corporate X Employment.

BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 15

FAMILY OFFICES HOWWE CAN HELP

WHAT IS A FAMILY OFFICE? X A professionalised support structure that helps a family manage and administer their assets and deliver their long-term strategy X There is no standard legal form X Can employ from 1 to 100+ X Variety of operating models from all in‑house to everything outsourced X Services provided will depend on family requirements from investment management or private equity to art and education. When done well, a family office safeguards the collective interests of the family while enabling individual family members to achieve their potential. DO I NEED A FAMILY OFFICE? Common reasons for creating a family office include creating a family legacy after a family business has been sold, the need for additional expertise to manage an increasingly complex portfolio of assets, relieving the administration burden on family members, gaining greater control over the management and investment of assets, increasing privacy or supporting the family’s philanthropic plans. As a family’s wealth and complexity increases, so too do the potential benefits of a family office. In assessing the complexity of needs, factors to consider include the variety of assets to be managed (such as real estate, investments and personal assets), the locations of assets and family members, and the expectations of a fully personalised and bespoke approach. Even if the answers to the exploratory questions point towards the establishment of a family office, benefits must be weighed against the costs, and alternatives should be examined.

HOWCAN BDO HELP?

PROOF OF CONCEPT

Supporting you to establish whether a family office is right for you and what you need it to do. At the end of this stage you will have a clear strategy and set of objectives for your family office.

DESIGN

Choice of the optimal location, structure and operating model to achieve your family’s specific objectives.

IMPLEMENTATION

Establishing a roadmap, building out the finer details such as your risk management strategy and staying by your side as the vision is brought to life.

ENHANCEMENT

Working with established family offices to ensure everything works as intended and support continued growth.

WHY BDO? What a family office ultimately looks like can vary considerably from family to family. However, most families only know their own family office. In contrast, we have worked with a many different ones over the years and can use this knowledge and experience to guide you whether you are embarking on a large strategic project or simply need a specialist who truly understands family offices for a one-off piece of advice.

ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 16

TAX DISPUTE RESOLUTION

We work closely with our Tax Dispute Resolution (TDR) team which offers a variety of services to a broad range of clients who are seeking resolution with HM Revenue & Customs (HMRC) in respect of their tax affairs.

OFFSHORE DATA X HMRC is tasked with raising £4.7bn over 5 years so we expect that HMRC will continue to focus heavily on ‘offshore non‑compliance’ X Further batch of ‘nudge’ letters sent out recently by HMRC after processing data received from overseas tax authorities under the Common Reporting Standard X In 2019, HMRC received information about the offshore financial interests of approximately 7.6 million offshore financial accounts and continues to receive further information each year. HMRC is working through this information to detect non-compliance X Letters follow on HMRC’s Requirement to Correct (RTC) campaign, which was a statutory obligation for taxpayers with overseas assets to correct any issues with their historic UK tax position X Under RTC, taxpayers were legally obligated to take steps to correct their UK tax position by 30 September 2018. Now in ‘Failure To Correct’ regime and increased penalties.

THEWORLDWIDE DISCLOSURE FACILITY TheWDF remains open for voluntary disclosures relating to offshore income and gains X We can advise on whether a voluntary disclosure is required and if so, whether any disclosure facilities or current campaigns offered by HMRC would be appropriate. Our clients are made fully aware of all options available to them, the risks involved and how we can help to minimise those risks and reach a resolution with HMRC X We have unparalleled experience of assisting clients in making voluntary disclosures to HMRC in respect of both onshore and offshore matters X BDO offers a bespoke service where we manage the liaison with HMRC and prepare the disclosure. We also offer valuable input on the potential penalty position, especially in light of the harsher levies on offshore non-compliance.

WE CAN HELPWITH THE FOLLOWING: X Voluntary disclosures concerning both offshore and onshore matters X Serious tax investigations including Code of Practice 8 and Code of Practice 9 (Contractual Disclosure Facility) X HMRC compliance checks and self-assessment enquiries X Tax avoidance arrangements including Follower Notices (FNs) & Accelerated Payment Notices (APNs)

X Litigation, Consultancy and Expert Witness X Mediation – Alternative Dispute Resolution X Appeals, including internal reviews X Technical advice on HMRC powers and penalties X Time to Pay Arrangements X Assisting professional advisers.

BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 17

BDO SINGAPORE PRIVATE CLIENT SERVICES

WHOWE ARE X We provide a holistic approach in advising individuals, entrepreneurs and family businesses in all areas of personal and corporate taxation X We tailor our tax solutions to match the objectives of our clients and maximise their wealth X We work actively with advisers to private clients, working with trust companies, family offices, private banks, lawyers and existing accountants to offer a holistic approach to tax planning X We have a particular focus on wealth structuring, with experience and expertise in tackling complex issues such as succession planning and the use of family offices, through to coordinating and processing personal and corporate tax returns X We are also immigration specialists and we assist individuals and families relocating to Singapore to obtain work passes or permits as well as more long-term solutions such as Singapore PR status and Citizenship X We advise on employment arrangement and remuneration structuring as part of the business structuring for concurrent multiple roles in different jurisdictions.

WHY SET UP A FAMILY OFFICE IN SINGAPORE? Singapore is a leading Asian hub for fund management and with its strong regulatory framework, Singapore is highly regarded for transparency and has always valued the need to have substance. As families are now seeking substance and tax certainty for their structures, there has been an increase in demand to establish family offices in Singapore. Our Private Client Services team has extensive experience in assisting our clients to set up family offices and apply for the relevant tax incentives. We help our clients to institutionalise the holding structure for the family wealth, facilitate succession planning and create a more efficient and transparent structure. SERVICES We work with individuals, their families, their businesses, investors, at different stages of wealth creation, trustees and family offices. We offer the following advisory and compliance services: X Wealth and asset structuring advice for international private clients X Employment structuring for multiple roles in different jurisdictions X Tax compliance, administration and dispute resolution X Succession planning, management and family governance X Estate and wealth taxes X Partnership and corporate tax structuring X Profit extraction and transaction support X Immigration support – Citizenship, PR and work pass/ permit applications X Transfer Pricing.

SINGAPORE FUND TAX INCENTIVE SCHEMES

13D SCHEME

INVESTORS

FUND (OFFSHORE)

INVESTMENT PORTFOLIO MANAGED BY FUND MANAGERS IN SG

0%TAX

INVESTMENT INCOME

13O SCHEME

INVESTORS

INVESTMENT PORTFOLIO MANAGED BY FUND MANAGERS IN SG

FUND (SG)

KYLIE LUO EXECUTIVE DIRECTOR - LEADER, ASSET &WEALTH MANAGEMENT

INVESTMENT

13U SCHEME

t: e:

+65 6828 9123

FUND (SG / OFFSHORE)

INVESTMENT PORTFOLIO MANAGED BY FUND MANAGERS IN SG

INVESTORS

kylieluo@bdo.com.sg

INVESTMENT INCOME

0%TAX

ABNER KOH executive director - private client services

Singapore is widely known for having one of the most competitive tax regimes. Singapore also offers various fund tax incentive schemes (13D, 13O and 13U) to mitigate the Singapore tax exposure by achieving tax neutrality. Under these incentives, funds managed by a fund management company or family office in Singapore can enjoy a tax exemption on income subject to meeting the relevant conditions.

t: e:

+65 6829 9645

abnerkoh@bdo.com.sg

ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 18

BDO HONG KONG

WHY HONG KONG As one of the world’s leading international financial centres, Hong Kong has a capitalist economy characterised by low taxation, free trade and minimum government intervention. Its simple tax system has led to Hong Kong being one of the most famous low-tax jurisdictions. Salaries tax in Hong Kong is calculated at progressive rates of up to 17%, or at a flat standard rate of 15% without deduction or allowances, whichever is lower. Hong Kong has no capital gains tax, no VAT, and no net wealth, inheritance or gift taxes. There is no withholding tax in Hong Kong on dividends or interest payments made to non‑residents. Profits tax rate is 16.5% for incorporated businesses and 15% for unincorporated businesses, with a two tiered profits tax rate of 8.25%/7.5% for the first 2 million of assessable profits and 16.5%/15% for the remaining assessable profits. Furthermore, with a territorial basis of taxation, both individuals and corporations are generally not subject to tax on non‑Hong Kong sourced income or profits. Whether income or profit is sourced in or outside of Hong Kong is determined by principles and tests developed through tax jurisprudence. HOW BDO HONG KONG CAN HELP The Private Client Services team at BDO in Hong Kong has extensive knowledge and experiences in providing you with one-stop, professional, comprehensive, tailor-made, client-interest orientated services that meet the special needs of you and your family. We bring the best resources we have to any client matter regardless of where those resources sit within our global organisation. Our tax teams are used to and are adept at working not only cross border but also cross subject matter. We believe our clients get better tax solutions to their business problem from our joined-up approach. The spectrum of our services are set out on the adjacent page.

FUND AND ASSET MANAGEMENT IN HONG KONG As an international asset management hub, Hong Kong offers many tax incentives for the fund and asset management industry. Apart from the Offshore Fund Exemption regime for hedge funds and private equity funds, the Unified Fund Exemption regime also provides tax exemption for setting up funds that are tax resident in Hong Kong. In April 2021, the Hong Kong government enacted the law to provide tax concession for carried interest for private equity funds. Under the concession, eligible carried interest received by or accrued to qualifying recipients on or after 1 April 2020 will be subject to 0% profits tax rate and 100% exclusion from employment income for calculation of salaries tax. The tax team at BDO in Hong Kong is experienced in working with lawyers, trustees and bankers in helping investors setting up their investment structures. We have also assisted many fund managers in establishing themselves in Hong Kong to avail of the various tax exemptions for funds and incentives for fund managers, including the carried interest exemption. Together with BDO’s global network, we offer streamlined one- stop services for HNWIs and their families in terms of tax planning, accounting and business services outsourcing so that they can live wherever they wish without the hassle of managing their businesses and investment portfolios in Hong Kong in such a dynamic and diverse global environment, while preserving regulatory compliance, operational and tax efficiencies.

BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 19

AGNES CHEUNG DIRECTOR & HEAD OF TAX

PRIVATE CLIENT SERVICES X Migration support and tax planning X Family office investment structuring X Succession and estate tax planning X Accounting, payroll and corporate services outsourcing.

t: e:

+852 2218 3232

agnescheung@bdo.com.hk

BUSINESS TAX & EMPLOYMENT TAX X Business tax planning and implementation X International employment X Structuring, tax exemptions & incentives X Tax returns and filing X Tax audits & investigation. INTERNATIONAL &TRANSACTIONAL TAX X Holding and financing structures X Cross border transactions X Supply chain management X Merger & (post) acquisition tax integration X Buy-side and vendor due diligence.

ABIGAIL LI DIRECTOR OF INTERNATIONAL TAX

t: e:

+852 2218 3372

abigailli@bdo.com.hk

TRANSFER PRICING SERVICES X Transfer pricing review/health check

X Tax aligned business model optimization X Operational transfer pricing advisory X Contemporaneous documentation (local file, master file, CbCR) & benchmarking study.

ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 20

BDO CHINA

CHINA IS A MARKET LIKE NOOTHER. THE OPPORTUNITIES ARE TOO BIG TO IGNORE FOR AMBITIOUS PRIVATE CLIENTS AND BUSINESSES LOOKING TO EXPAND INTO NEWMARKETS. THE CHINESE MARKET IS ALREADY HUGE AND STILL HAS INCREDIBLE POTENTIAL. A NEWMIDDLE CLASS OF CONSUMERS IS EMERGING FAST AND NEWAREAS AND SECTORS ARE OPENING UP TO FOREIGN COMPANIES. HOWEVER, THE CHALLENGES OF OPERATING IN CHINA ARE NOT TO BE UNDERESTIMATED. You will need a good advisor with real local knowledge, connections and experience. A guide who gives you the confidence and the wisdom to make the right choices.

OVERVIEW BDO China was founded in Shanghai in 1927 and is one of the earliest and most influential accounting firms in China’s history. Headquartered in Shanghai, BDO China currently has more than 30 offices and 10,000 employees. Its local network and contacts set it apart from top accounting practices and this benefits BDO’s clients from all over the world. The Firm is structured to include seven management committees and functional business departments of Auditing, Tax, Advisory, International Business, Risk Management, Information Technology, Training, Asset Appraisal and Accounting Policy Research Center. The firm’s clients include over 300 listed companies, over 300 IPO companies, and more than 2,000 enterprises with foreign investments. BDO China serves clients across the country and around the world as they navigate an increasingly complex tax landscape. Our tax professionals draw on deep experience and industry-specific knowledge to deliver clients the insights and innovation they need to maintain compliance and drive value – wherever they do business.

SERVICES FOR PRIVATE CLIENTS The services we provide private clients include the following: X Wealth and asset structuring advice for international private clients X Tax compliance and administration X Resident-taxpayer status and tax burden analysis for individual clients X Annual tax declaration on income tax for individuals and companies X Partnership and corporate tax structuring X Transfer Pricing X Foreign exchange advice for cross-border funds transferring.

RAYNA YIN PARTNER - BEIJING OFFICE

+86 10 6828 6867 *6688

+86 13911264886

yinruixin@bdo.com.cn

BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 21

BDO INTERNATIONAL

OUR PEOPLE At BDO, we understand that exceptional client service to our clients begins - and ends - with exceptional regard for people. X Partners and staff are accessible X Our people managers encourage collaboration in an atmosphere of trust and cooperation, mentoring, consulting, and exchanging ideas X The BDO culture encompasses career aspiration and development X We feature office locations in both large and small centres around the globe X We strive for exceptional client service delivered by exceptional people.

With a network spanning more than 160 countries worldwide, BDO is the fifth largest global network of public accounting firms . Our seamless global approach allows us to serve clients through a central point of contact, granting access to relevant experience across borders - where and when our clients need us. BDO’s strength is derived from our structure as a global network and dedication to internal integration. In each country, BDO Member Firms are composed of people who are knowledgeable about national laws and business customs , and familiar with local and international business methods. As our clients expand globally, access to our international network can help them do business with a depth of experience in international matters , significant resources and international client service capabilities.

FOR MORE INFORMATION:

This publication has been carefully prepared, but it has been written in general terms and should be seen as containing broad statements only. This publication should not be used or relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained in this publication without obtaining specific professional advice. Please contact BDO LLP to discuss these matters in the context of your particular circumstances. BDO LLP, its partners, employees and agents do not accept or assume any responsibility or duty of care in respect of any use of or reliance on this publication, and will deny any liability for any loss arising from any action taken or not taken or decision made by anyone in reliance on this publication or any part of it. Any use of this publication or reliance on it for any purpose or in any context is therefore at your own risk, without any right of recourse against BDO LLP or any of its partners, employees or agents. BDO LLP, a UK limited liability partnership registered in England and Wales under number OC305127, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. A list of members’ names is open to inspection at our registered office, 55 Baker Street, London W1U 7EU. BDO LLP is authorised and regulated by the Financial Conduct Authority to conduct investment business.

BECKY HARTLEY ASSOCIATE DIRECTOR - INTERNATIONAL CO-ORDINATOR +44 (0)20 7893 2361 rebecca.hartley@bdo.co.uk

BDO is the brand name of the BDO network and for each of the BDO member firms.

BDO Northern Ireland, a partnership formed in and under the laws of Northern Ireland, is licensed to operate within the international BDO network of independent member firms.

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