Highvern recently had the opportunity to facilitate round table discussions with top UK private client advisers during Thought Leaders 4 Private Client conferences in Jersey and Guernsey. During the course of these well-attended conferences this was one of a number of “hot topics” that drew comments on best practice from this top tier advisory peer group.
Reasons why clients may propose to live a Nomadic lifestyle:
- Tax planning
- Break from ‘reality’ post business exit
- Lack of confidence in Governments/Institutions
- Adoption of universal non-tax residency:
Most of those present would not advise clients to take a position that they are not tax resident anywhere in the world. Technical reasons cited were inability to create new banking relationships, risk of tax enquiries from countries that clients visit regularly and difficulty in progressing estate planning. Reputationally, the potential for public criticism as the world adopts more transparent reporting was also a key factor in advisers minds.
- Itinerant lifestyle:
Even where a client maintains a continuing tax residence or other tax footprint (e.g. US federal taxation via US citizenship), the adoption of a lifestyle involving continuous travel can present practical issues (e.g. healthcare, impact on client lifestyle, relationships with family members).
- A wealthy family had decided to travel the world on a super yacht for a number of years, post-business exit. Unexpected challenges included employment and health issues amongst crew members, costly technical structural issues with the vessel leading to a dispute with insurers, and the inability to continue travel when COVID-19 forced to vessel into berth for 6 months.
- A wealthy couple who have taken the position that they are not tax resident anywhere are unable to open new bank accounts. They are currently unsure if their longer than expected stay in the UK during COVID-19 will cause them to be deemed UK resident, especially in the absence of tax residency elsewhere. Continuous travel has caused relationship difficulties between the couple.