How to win a STEP Private Client Award

George HodgsonEntries are open for the 2017/18 STEP Private Client Awards until 28 April 2017. The Awards are widely acknowledged as being one of the premier events in the private client industry calendar. Winning an Award is also a very clear and recognised hallmark of excellence.

How then, do you go about winning an Award?

Enter
The Awards are free to enter (we simply ask entrants to consider a donation to charity) and open to all firms and practitioners in the industry.

There can sometimes be a perception that the Awards are only for larger firms, but almost every year smaller firms impress the judges by demonstrating innovation, an exceptional focus on a particular area or an outstanding rapport with their clients. Applications from all sizes and types of firm are therefore welcome.

Similarly potential entrants away from the major industry centres sometimes feel they might be disadvantaged. The judges for the awards are nevertheless increasingly international and drawn from across the spectrum of the private client industry. Strong entries will always attract attention from the judges, wherever they originate from.

Don’t just copy and paste from marketing materials!
You will be judged by fellow senior industry professionals and the language and tone of your entry needs to reflect that fact. Cutting and pasting from your website or marketing material will usually not impress the judges. Neither will excessive use of superlatives and hyperbole. What will go down well is an evidence-based entry that gives a clear exposition of what the firm has done over the past year to make it stand out from the crowd.

Apply for the right award
It is a constant surprise to the judges how many firms enter the wrong category. One submission even began with the bold statement: ‘We are a leading (another category all together) firm…’. Read the category criteria carefully, and if you think the judges might have difficulty understanding why you are applying for a particular category, help them by explaining your business better.

Answer the questions
Probably the most common reason for submissions going by the wayside is that the judges feel that the questions and criteria laid down in the Awards entry pack have not been answered. It is standard advice to every student sitting an exam to read the questions carefully and make sure you answer them. The same holds true for anyone drafting a submission for a Private Client Award. There are typically five criteria on which each award will be judged. Judges are asked to score entries on each of those criteria, with each carrying equal weighting. If your entry does not cover one of the criteria, you are likely to be penalised.

Give examples and evidence
Solid evidence and real examples demonstrating why you think your firm deserves an Award always go down well with the judges. To illustrate, most entrants in most categories claim to be ‘client focused’, but some give real-life examples of how they achieve this and what they have done to go that extra mile for their clients. This attracts the judges’ attention far more than a simple assertion.

Be consistent
The judges are both curious and cynical in equal measure. They will check what you say in your submission against what you say on your website and other sources of information. Glaring inconsistencies tend to result in entries receiving relatively short shrift.

Know your (word) limits
Brevity is a strength, but submissions sometimes fall by the wayside because there is little clear detail on key issues and yet the submission is significantly below the 1,000-word limit. Equally, don’t go over your 1,000 words: the judges have a lot of entries to read!

Remember we are choosing ‘Xxx of the Year
Your firm may well be successful and very good at what it does, but the Awards are intended to highlight those that have achieved particular success over the past year. General statements about historic successes are therefore far less relevant than what you have actually achieved over the past 12 months.

From the above it is probably clear the STEP Private Client Awards are very competitive. Submissions across the board are usually of a very high standard. That is why the Awards remain so prestigious and the Awards Ceremony on 6 September 2017 remains one of the networking highlights of the year for many senior practitioners.

George Hodgson is Chief Executive of STEP

CRS and Charities: January 2017 update

Donations boxHMRC hosted another Charities CRS working group on 16 January. The following issues were on the agenda for discussion:

Anti-Avoidance Rules

HMRC would like to refine its currently broad regulation regarding anti-avoidance. It is scheduled to discuss it with the compliance team shortly. It will also be reviewing the anti-avoidance issues surrounding donations channelled through other charites and some more detailed guidance is expected to be issued shortly thereafter.

Trust Guidance

HMRC is in the process of preparing some guidance with the OECD focusing on some of the grey areas surrounding trusts. STEP has produced a memorandum on the issues of concern on how the CRS is intended to apply to trusts, persons connected with trusts and trust assets. The memorandum sets out our understanding of the application of the CRS in certain circumstances and highlights points of uncertainty in the reporting framework. We have submitted the paper to HMRC and the OECD and hope that it will form part of the additional new OECD guidance.

Human Rights

HMRC has issued new guidance, Charities: Protection on Human Rights Grounds, which will assist charities concerned about the human rights implications associated with information they are required to report under the automatic exchange of information (AEOI) agreements. HMRC recognises that there may be cases where the threat to an individual’s human rights as a result of his or her information being exchanged may justify information being redacted from that transmitted. The guidance covers the redaction of information on human rights grounds; threats to human rights, and safeguards already in place; and how to apply for redaction of information, including the HMRC process and the documentation required.

STEP will continue to attend the periodic working group to discuss ongoing technical issues with HMRC.

 

Emily Deane TEP is STEP Technical Counsel

Are you a Trust or Company Service Provider under Schedule 23?

UK Emily Deane TEPHMRC has confirmed today that firms that advise their clients on the establishment of offshore companies or trusts may receive pre-Notice letters this month.

The letter requests that advisors come forward and volunteer the following information to HMRC: name and address of the client, the entity details (name, jurisdiction, date of registration) and details of persons with beneficial ownership or interest in the entity. Following the issue of the pre-Notice letters the formal Notices will be issued under Schedule 23 of the UK Finance Act 2011 in February 2017.

STEP and the Law Society of England & Wales have been in protracted talks with HMRC about this issue over the last year. There are concerns about the potential breach of legal professional privilege, access difficulties to the relevant data and the definition of Trust or Company Service Providers (TCSPs).

HMRC has launched this initiative in order to gather information on the beneficial ownership of offshore companies and beneficial interest in offshore partnerships, trusts and other entities from UK-based TCSPs or their overseas subsidiaries. However, the definition of a TCSP in this connection is a little uncertain. The Money Laundering Regulations 2007 (MLR) incorporate the meaning of a TCSP within regulation 3:

’10) “Trust or company service provider” means a firm or sole practitioner who by way of business provides any of the following services to other persons—

(a) forming companies or other legal persons;

(b) acting, or arranging for another person to act—

      (i) as a director or secretary of a company;

      (ii) as a partner of a partnership; or

      (iii) in a similar position in relation to other legal persons;

(c) providing a registered office, business address, correspondence or administrative address or other related services for a company, partnership or any other legal person or arrangement;

(d) acting, or arranging for another person to act, as—

      (i) a trustee of an express trust or similar legal arrangement; or

      (ii) a nominee shareholder for a person other than a company whose securities are listed on a regulated market,

when providing such services.’

We believe that the most likely scenario whereby a UK practitioner will be classed as a TCSP is under section 10(d) when the UK practitioner arranges for another person to set up the entity offshore. It is not entirely clear whether this would  be a formal referral to another firm, involving a transaction fee, or whether an informal recommendation of an offshore firm is sufficient to trigger the classification as a TCSP.

Regulation 6 of the MLR sets out in detail which persons should be treated as though they are beneficial owners for the purpose of Anti-Money Laundering. Those categories are:

  • any individual who is entitled to a specified interest in at least 25 per cent of the capital of the trust property
  • any trust, other than one which is set up or operates entirely for the benefit of individuals, falling within sub-paragraph (a) the class of persons in whose main interest the trust is set up or operates
  • any individual who has control over the trust.

There is a £300 penalty for initial non-compliance, followed by daily penalties of up to £60 if the non-compliance continues. The TCSP will have 90 days to respond with the requisite information.

We understand that the Notices are only being sent to a select number of firms in February and HMRC has not issued any guidance at this time, therefore please contact emily.deane@step.org if you have any queries.

Emily Deane TEP is STEP Technical Counsel

New Year, new line-up

Patricia WassThe past few months have seen some big changes at STEP. While we have announced them all separately, I thought it might be helpful to provide a summary of what’s what.

First, it is a great honour and privilege to be writing this as the new worldwide Chair of STEP. I was elected in October and took office on 1 January 2017 for a one-year term. I have taken over from Edward Buckland TEP, who served as Chair for two years and dedicated enormous time and effort to leading the Society. He is going to be a hard act to follow.

I will be ably supported by my two Deputy Chairs, Simon Morgan TEP (Jersey) and Paul Seal TEP (England and Wales), who were elected in December 2016 and took office, like me, on 1 January, again for one-year terms.

Simon is one of five new Board members who joined myself and Paul as of 1 January: also joining us are William Ahern TEP (Hong Kong), Nancy Golding QC TEP (Canada), Dayra Berbey de Rojas TEP (Latin America), and David Russell QC TEP (Australia/Dubai), all of whom will serve a three-year term.

I very much look forward to working with all of my new colleagues, and I would like to pay tribute to the Directors who have just come off the STEP Board, having given tremendous service to the Society. Edward Buckland TEP, George Lyall TEP, Nick Jacob TEP, John Lawrence TEP and Angelo Venardos TEP have all acted tirelessly, and in the best interests of the Society, over many years.

Earlier this week we also made another important announcement, welcoming George Hodgson as STEP’s new Chief Executive, responsible for the overall management and delivery of the Society’s strategy and activities. George is well known to STEP members across the world, having been Deputy Chief Executive and served as Interim Chief Executive since the departure of David Harvey in June 2016. His appointment follows a rigorous recruitment process over the last six months of 2016.

We have also announced a number of other appointments over recent weeks and months, with new members Assad Abdullatif TEP (Africa & Arabia – replacing Tanya Cohen TEP), William Fowlis TEP (Canada – replacing John Poyser TEP), Ian Macdonald TEP (Scotland – replacing Paraic Madigan TEP),  Alan Milgate TEP (Caribbean – replacing John Lawrence TEP), Toby Crooks TEP (England & Wales – replacing Christopher Lintott TEP), Lorraine Wheeler TEP (Jersey – replacing Edward Buckland TEP) and Babetta von Albertini TEP (USA – replacing Larry Heller TEP) joining the wordwide Council as of 1 January 2017.

In addition, Rita Bhargava TEP has been elected Chair of STEP’s England and Wales Regional Committee; Cecile Vuillier TEP and Felicity Keller TEP were elected co-Chairs of the Swiss and Liechtenstein STEP Federation, and an election is currently underway for a new Chair of the Caribbean and Latin America Regional Committee.

I would like to congratulate everyone on their election and thank all those who have stepped down. I look forward to us all working together to take STEP forward. Last year saw us celebrate the first 25 years of STEP. Now the Society is moving into the next 25 years in its history we need to build on the firm foundations that have been laid for us by the founding fathers of STEP. We will take the very best from their experiences, and then continue down the right path for the Society, aspiring to be the leading worldwide professional body for those specialising in advising families across generations.

Patricia Wass TEP is worldwide Chair of STEP

The UK Client Notification Regulations – what is your obligation?

The UK Client Notification Regulations came into force on 30 September 2016 and the obligation for practitioners to notify any clients with offshore accounts and assets must be met by 31 August 2017.

The objective of the Regulations is to ensure that clients have advance warning that HMRC will soon begin to automatically receive data from over 100 jurisdictions relating to UK tax residents and their offshore accounts, in accordance with the UK’s Automatic Exchange of Information (AEOI) agreements.

Financial institutions that provide offshore advice (‘Specified Financial Institutions’ – SFIs) and practitioners who provide clients with advice or services relating to offshore income or assets (‘Specified Relevant Persons’ – SRPs) that is not disclosed in their clients’ tax returns are required to send each of their clients a Client Notification Letter advising them that their offshore tax information will be shared with HMRC under the Common Reporting Standard (CRS).

The notifications are only applicable to individuals and there is no obligation to notify companies or trusts.

There is a flat-rate penalty of GBP3,000 per SRP or SFI for not complying with the notification requirements.

SRP obligations

HMRC advises that if you are an SRP there are two options that you may wish to consider when identifying the relevant clients:

  1. To notify all of your clients for whom you have not submitted a return, or
  2. To specifically target the clients to whom you have provided offshore advice or services or referred offshore advice or services.

SFI obligations

If you are a financial institution that maintains an offshore account for an individual or have referred clients to a financial institution, wherever located, for the purpose of opening an offshore account you will need to send notifications. The two options in this connection are:

  1. Notify all account holders who have an account balance in excess of USD1 million in the UK, or
  2. Notify all account holders who are tax resident in the UK for whom the SFI maintains a financial account overseas, or who they refer to another financial institution to provide an overseas account.

Further information and guidance on what needs to be included with your notification letter is available here.

The HMRC-branded Client Notification Letter is available here.

We have been informed that the HMRC team will be happy to take queries in this connection at elinor.crockford@hmrc.gsi.gov.uk and mark.scott4@hmrc.gsi.gov.uk.

See my earlier Blog of 14 September 2016 for further information on the International Tax Compliance (Client Notification) Regulations.

Emily Deane TEP, STEP Technical Counsel