Pictet & Cie to allow clients to domicile wealth in UK

Pictet & Cie, Switzerland’s largest independent private bank, will allow clients to domicile wealth in the UK, in a sign that a global crackdown on tax avoidance may be making offshore havens less attractive.

“This [move] has been demanded by colleagues and clients around the world who want to have their assets in the UK,” said Dina de Angelo, director of private banking at Pictet in London.

Pictet, which offers asset and wealth management services, said it hopes to allow customers to register assets through an onshore booking centre in London from the second half of this year, subject to approval from the UK financial regulator.

Ms de Angelo suggested that UK-resident clients were increasingly looking to bring their wealth onshore in the face of increasingly stringent rules around tax transparency.

“With tax and regulatory transparency happening [everywhere] in the world, is there any reason people would need to have assets in a country where they do not reside?” she said.

The head of a large UK private bank said the shift was “part of a wider trend of offshore money moving onshore”, adding: “There is an increasing stigma around holding assets offshore — even when that is perfectly legal and valid.”

Switzerland, a traditional offshore domicile with a centuries-old commitment to protecting the privacy of its banking clients, has found itself at the heart of a global crackdown of tax avoidance in recent years.

With tax and regulatory transparency happening [everywhere] in the world, is there any reason people would need to have assets in a country where they do not reside? she said.

In 2014, the country was one of more than 44 jurisdictions to sign up to a new global standard on information exchange, while the country’s private banking sector has come under mounting international pressure to repeal secrecy laws.

A senior private client partner at a global consultancy said the erosion of secrecy in Switzerland would make the UK an increasingly popular jurisdiction due to the lower costs associated with domiciling wealth in London.

“The thing with Switzerland historically is that it has been considered a good location for dealing with investment wealth because of privacy,” the person said. “I don’t think it’s very cheap to do business in Switzerland, but the privacy was worth paying for.”

Changes to the rules governing the tax affairs of UK resident non-domiciled people are also said to be behind the onshoring trend.

From 2017, those with a non-dom tax status living in Britain will be deemed to have acquired a UK domicile after 15 years of residence, making their overseas income and capital gains subject to domestic taxation.

“Any non-doms living in the UK for 15 years are suddenly going to start being taxed on worldwide income anyway, so they may as well move their assets onshore,” said the consultancy.