This article has been written following a webinar that we hosted in our Luxembourg studio on 16 June 2021. You can replay the webinar here.

Despite the growing uncertainty derived from the backdrop of the pandemic and the Brexit outcomes, the UK continues to be a top global hub and a jurisdiction of choice for HNW and UHNW families, with international family circumstances, geographical footprint and lifestyles. But navigating cross-border residency shifts can be logistically tricky not just for the household itself, but for the wealth associated with it too.


Like most things, planning early enables many of the challenges to be smoothed out. The flexibility of investment-based insurance products – such as Private Placement Life Insurance (PPLI), also known as unit-linked life insurance solutions – is designed to accommodate the complex cross-border wealth planning needs of UHNWs.

An increasing number of clients are looking for flexible and tailored pre-immigration wealth planning solutions. Our own ‘on the ground’ insight is backed up by the 2021 Knight Frank Wealth Report which found that while 84% of UHNWI expect to continue to travel less this year, their expectations of geo-flexibility are undampened - nearly a quarter of UHNWIs are planning to apply for a second passport or citizenship – a remarkable 50% growth in a year.

Coming to the UK

For Non-doms moving to the UK, the devil really is in the detail. It’s essential that, from the outset, information, decisions, and implications around current and future tax status are clear. As part of this, the domicile status and commencement period of tax residency must be established clearly.  From that robust foundation, the focus can shift to offshore wealth.

A key question that needs to be addressed is what impact the new UK residency has on wealth outside the new location and from there, what changes need to be made or structures put in place to give the necessary reassurance. Non-doms using the remittance basis will often need to segregate offshore wealth with a view to ensuring the correct rate of tax is paid on amounts brought to the UK, and with a view to protecting any clean capital. A life insurance policy or policies can make that segregation unnecessary and can help clients preserve and add to clean capital. There may also be no need to pay the remittance basis charge.

The policy has the additional benefit of allowing a maximum of 5% to be drawn down each year and, if it derives from clean capital, brought to the UK without tax. While it’s important to note that this figure is calculated from the initial premium plus any additions since, it provides valuable tax efficient access to capital. If greater access is required, the policyholder can borrow against a clean capital policy and bring the loan to the UK.

In terms of the financial calendar, those taking up residency in the UK may be able to take advantage of the mismatch between the UK tax year end and those in the rest of the world. By surrendering tax residency in the country of origin at an opportune time, it is possible to create a tax efficient window before taking up tax residency in the UK. This does, however, demand careful attention.

The fundamentals to consider also include whether there is an exit tax from the current country of residence, and if the client has an existing contract, can that simply be amended to ensure that it’s properly compliant for the new country of residence.

An alternative option than can sometimes be appropriate is instead for the client to simply come out of their current policy. This enables them to take advantage of time apportionment relief, reduce the gain taxable in the UK by reference to time spent abroad, and then rebase the policy value. Then they can take a new life policy, with the 5% allowance calculated using the new premium.

Moving out of the UK

For HNWs that anticipate struggling to navigate onerous reporting requirements in a new language, a great deal of comfort can be given with regard to protecting their wealth through rigorous planning in advance of their departure.

For those departing the UK’s shores, typical destinations such as the Nordics and Portugal allow the contracts to be amended at the time of the move. A crucial exception to this is Spain. Those shifting their residency to that particular region of the Iberian Peninsula are required to have made provisions for the move at the inception of the contract. For those clients for whom such a move might be an option for consideration further down the line, such flexibility should be woven in at the offset.

Having had residency in the UK, HNWs will be moving from one of the more generous systems in Europe, with its donation/gifting system offering substantial flexibility and scope for wealth transfer. For example, as long as a domiciled donor survives beyond 7yrs, there’s no inheritance tax liability on wealth given to another individual.

For those moving from the UK to mainland Europe, it therefore often makes sense to take advantage of this generous system. This may mean taking steps to decrease the size of the financial estate before moving to another geography where wealth transfer options and tax liability may be more cumbersome.

Planning can be difficult though – even thinking about where one expects to be in five years’ time can seem impossible. So, to counterbalance that, identifying and implementing flexible solutions is crucial.

Investment restrictions and taxation

The benefit of the unit-linked life insurance solution is that it enables wealth to be invested in a broad array of asset classes and financial vehicles. Crucially, these assets can be managed by one or more managers.

In the UK, the option does also exist for clients to play a more active role in fund selection, along with their adviser. However, it’s important to note that going down this route significantly narrows the investment landscape, restricting investment into mainly collective funds.

Also of note is that while there is generally no beneficiary clause in the UK, that’s not the same across Europe. Furthermore, a notable difference between the UK and mainland Europe is that typically policies will be paid-out on death of a sole life assured, while in the UK, there is a greater appetite for adding lives assured and passing on the policy.


Preplanning is clearly hugely beneficial, and its importance really cannot be overstated. It is important to embrace the full flexibility of the options available. This is why so many HNWs with wealth portability demands lean heavily on wealth assurance. As global uncertainty continues to wreak havoc on short, medium, and even long-term financial planning, it is critical that they are provided with solutions that safeguard their wealth as well as its portability. Doing so ensures that they can confidently protect, preserve and pass on their financial legacy.