Hello everyone, it’s not exactly ‘Hotter than July’ at the moment, but we have a ‘new wind’ blowing through the UK, with the recently elected Labour Government led by Prime Minister Keir Starmer. As part of their promise to ‘level up’, the new Labour government has promised to help create wealth in every community. In spite of the initial concerns from the business community of the impact of the Labour victory on the UK economy, financial markets have reacted well so far. Sterling rose against the dollar, while the FTSE 100 was up 0.41%and the FTSE 250 by 1.3% by the end of the first week of Labour,

Our newsletter aims to provide insights and updates on new developments that are important to our important client base of affluent and High Net Worth families, most of whom are based on the African continent though with global footprints in several jurisdictions, notably the United Kingdom.

What to Expect from the Labour Government?

Prime Minister Keir Stamer’s main message to the electorate is that Labour intends to reduce the wealth disparity in the U.K.

Here are a few of the plans highlighted by our new Prime Minister in his maiden speech.

HOUSING

Starmer used his first speech to highlight the importance of providing affordable homes. The Labour Party manifesto promised to introduce a Freedom to Buy scheme, which is a permanent form of the previous government’s mortgage guarantee scheme that was due to end in June 2025. The Labour government also plans to reduce the first-time buyer stamp duty exemption from £425,000 to £300,000 from April 2025.

PRIVATE SCHOOL PARENTS

One of Labour’s flagship policies is to add VAT to private school fees. It claims this will boost the state sector, but it may also leaves parents facing a choice of paying more, moving schools, or even moving to a different area with lower charges or better options.

LANDLORDS

Investors have already faced restrictions on buy-to-let properties, and landlords could face another clampdown under Labour. The party’s manifesto pledged to scrap Section 21 ‘no-fault’ eviction notices. There are also concerns that Labour will raise capital gains tax, which would hit landlords when selling their properties.

Here's a breakdown of the duties of a non-resident landlord regarding tax returns and rental income in the UK:

Who is a Non-Resident Landlord in the UK?

 You're considered a non-resident landlord if you own residential property in the UK which you rent out and if you spend more than 6 months outside the UK in a tax year. This applies even if you're a UK resident for other tax purposes.

Tax Filing Requirements

As a Non-Resident Landlord, you are required to file a Self-Assessment tax return with HMRC regarding the rental income you have earned in the U.K., even if there's no tax to pay. However, you cannot use HMRC's online services for filing. You'll need to submit a paper return or use commercial tax filing software. The specific forms to be filled depend on whether you submit by paper or electronically but will include sections on residence and property income.

If you are a Non-Resident Landlord U.K but have not filed your tax returns, you should seek advice immediately. Contact us.

 EXPECTED CHANGES TO THE NON-DOM REGIME

Who Qualifies as a Non-Dom?

‘Non-doms’ are individuals whose permanent home, or domicile, is considered to be outside the UK.

What Is the Non-Dom Tax Regime?

The current non-dom regime is a favourable tax regime which allows non-doms who are UK resident to opt to use the ‘remittance basis’ of taxation. This potentially avoids paying UK tax on their foreign income and capital gains (money made from selling assets), as long as they don't bring it into the UK. This is called the remittance basis.

What Should You Expect to Change?

The non-dom regime was already being reformed by the previous government, and Labour has also said it will abolish it, which would result in these individuals paying more taxes on their global income. Many wealthy individuals have already started relocating due to fears of higher taxes in the UK.

The end of the non-dom regime certainly represents the closing of a door for those who envisioned moving to the United Kingdom to live for a long time under tax benefits. However, the new regime could be an opportunity for high-income earners to have a four-year tax-free window to plan their future while enjoying everything the UK has to offer.

If you believe this could be an opportunity for you and your family, W8 Advisory may be able to help you put together a medium or long-term plan to structure your wealth in the UK or elsewhere that suits you best. Come talk to us.  

 UK EDUCATION 

Nigerian students “bring a passion for education” to UK

The UK currently has 1,500 girls and boys from Nigeria enjoying boarding schools across England, Scotland, Wales and Ireland; this is in fact a record number.

According to experienced education consultant Mark Brooks (CEO, Mark Brooks Education), who has been advising families from Nigeria for 16 years, “they bring a passion for education, and exceptional talents in sport, drama, art, music.”

Not only that he explains, “they are a hugely positive influence. Most leading boarding schools say that their current or a recent Head Girl or Head Boy is from Nigeria.”

Families are attracted to the UK, explains Mark, “because of a gold standard education, a diverse and welcoming community with academic and co-curricular excellence leading to places at our world-class universities.”

Heads of Schools and Senior leaders in the education sector from Britain are looking forward to returning to Nigeria this September to meet with parents who are considering the opportunities for their own children.

Also, there will be an exhibition from some of Britain’s finest boarding schools. It is on Wednesday 28th August 2024, 10am – 1pm at The Royal Over-Seas League, London, hosted by Mark Brooks Education.

To register to attend one or both of these events please send an email to: oana@markbrookseducation.com

 FOUNDATIONS VS TRUSTS

 Which is a better fit for an African Family?

When deciding between a private foundation and a trust for an African family, several factors come into play. Traditionally, African families prioritise communal well-being. A private foundation could reflect this by supporting the extended family or the community. A private foundation also presents an opportunity to introduce a governance and succession plan that the family members are aware of and agree with.

Here's a breakdown to help you choose:

In summary, a trust might be suitable for a family with minor children where the settlor is focused on managing assets and distributing them to future generations. On the other hand, a foundation could be a better fit for a family wanting to manage assets for future generations in a manner that includes the participation and understanding of family members and includes the establishment of a family governance framework.

If you are considering a structure that would implement your wealth management and succession planning aspirations, do contact us for advice and guidance.

NEW MEMBERS OF W8 ADVISORY TEAM

We are pleased to welcome new members of the W8 Advisory, who both compliment our existing skills, in order to serve our clients better.

Please note that our Company address and telephone number will be changing on the 1st of August. We have included the new address and telephone number below.

W8 Advisory

96 Kensington High Street,

London, W8 4SG

0203 667 8711