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There is a disconnect between jurisdictions when it comes to interpreting the CRS rules, and this has thrown up ‘unhelpful anomalies’ in the tax world, says Liz Palmer.
The head of private client and family at Howard Kennedy, who specialises particularly in offshore cases, says it’s a recipe for disputes with the taxman. ‘You can get a scenario where a piece of CRS compliance arises in one of the offshore jurisdictions for an individual who’s never had any requirement to report that structure to their domestic tax authorities,’ Palmer explains.‘It can create inconsistencies for them.’
More and more, families are moving away from structuring towards a more strategic deconstruction. ‘People used to judge their affairs by how many layers of trusts and companies that are involved, but now it really is a flight to simplicity and clarity,’ says Palmer.
And there is nowhere to hide compared to a decade ago, says the dual-qualified solicitor and chartered tax adviser: ‘It can be a bit frightening, a bit confusing, and [my role is] to get their affairs tidied up as neatly and as painlessly as possible.’
Palmer adds that with the ‘significant’ expansion of the private client sphere, UK advisers have no choice but to go global: ‘To be an expert in my field, I need to have recourse to experts in other parts of the world.’