In a global regulatory environment that is increasing in intensity and demand, the days of overly complex wealth structures are numbered, according to Stonehage Fleming in South Africa.
The international multi-family office urges wealthy South African residents faced with growing financial scrutiny to modernise their existing wealth structures to remove unnecessary complexity, while still meeting individual or family’s needs.
South Africa has recently complied with three international standards, namely Common Reporting Standards (CRS), the Foreign Account Tax Compliance Act (FATCA) and the Automatic Exchange of Information (AEOI). Certain financial information collected by financial institutions around the world is required, by law, to be reported to the tax authorities. However, as they are in varying stages of implementation, there remains substantial confusion on how best to satisfy these measures in a South African context.
Director within the Stonehage Fleming South African Family Office division, Michael McLeod, says that knowledge of the consequences of these standards is generally low in South Africa.
“The main attractions of multiple structures are estate and tax planning, succession planning and privacy. In many cases, privacy can still exist without the need for cumbersome structures, while retaining data protection and data security with regards to private wealth,” says McLeod.