Tuesday 16, May 2017 by William Mullally

Inheritance and succession planning on the rise in the GCC

A new White Paper from Jersey Finance examines the issues facing the Wealth Management sector in the GCC.

 Succession and inheritance planning is of increasing importance to High Net Worth (HNW) investors based in the GCC, as many family businesses in the region look to transition wealth to the next generation.

This is among the key findings of proprietary research conducted by Jersey Finance – the body which promotes the jurisdiction as a robust, transparent, International Finance Centre (IFC) – in conjunction with Hubbis, the international wealth management firm.

The report, titled “Driving Forces Behind GCC HNW Investors” was launched at the Jersey Finance GCC Roadshow this month. The research reflects the views of over 90 practitioners working in the GCC market, across private banks, trust and fiduciary services providers, consultants, law firms and other professional services firms. One-on-one discussions were complemented by further research through an online survey, and a thought-leadership roundtable in Dubai held in March.

A key issue facing the wealth management market within the region is the fact that countries within the GCC are relatively new to the tradition of inheritance. The report highlights that, while many Europeans are familiar with the concept of inheriting over different generations, a considerable amount of the wealth in the GCC remains in the hands of the first generation.

Additionally, the report outlined the reality of the new tax transparency initiatives (Common Reporting Standard (CRS) and Automatic Exchange of Information (AEOI)) that are creating new challenges for both GCC HNWIs and advisers; ensuring the right information is being disclosed by the clients, and that practitioners are advising the clients correctly.

The report also considers the lack of a ‘one-size fits all’ solution, and provides detail around various structures which can be used effectively both in the GCC and in IFCs.

Commenting on the report, Geoff Cook, Chief Executive of Jersey Finance, said, “We’re seeing a clear and growing demand for succession planning from GCC investors, which is to be expected given the importance of family businesses to the region’s economy. However, there are many misconceptions about the issues and solutions, shared by investors in the region, as well as a lack of practical solutions. For these reasons, we believe there is a stronger need for first-class IFCs and financial practitioners to provide a full suite of wealth management services to serve the needs of GCC wealthy individuals. These include family business and wealth succession planning, and advising on cross-border tax transparency in light of CRS and AEOI.”

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