As the wealthy continue to flock to the UK in greater numbers, so the banks are improving their wealth management services to meet the increasing demand.
JP Morgan has announced its intention to expand its private wealth management arm, and has headhunted some of the industry’s big hitters to target those who have assets of between £2 million and £16 million.
The firm has recently appointed seven top bankers to help meet demand from those moving to the UK – considered by many as a haven to locate their wealth.
This growing band of wealthy families moving in is underlined by the Sunday Times Rich List which shows that increasing numbers of foreign-born rich people merit their place on the list because of the assets they bring into the country.
Tracey Reddings, JP Morgan’s head of division, said: “The people we have hired highlight the commitment we have to the increasing number of high net worth clients who are now living in the region.”
Barclays sacks wealth managers
However, not all banks are feeling quite so confident about the future of helping the wealthy get richer with Barclays Bank announcing the closure of their tax planning operation after a review by the bank’s new chief executive Antony Jenkins.
The unit will be wound up by September with the loss of hundreds of jobs.
The move follows a series of negative media stories about the tax advisory arm’s schemes, two of which attracted the attention of HM Revenue and Customs and which were subsequently shut down.
Last year also saw the end of leading accountancy and advisory firm RSM Tenon’s specialist tax service after the government brought in new rules on firms being more transparent with the services they were providing to clients.
Indeed, there are so many millionaires moving to the UK that is quickly becoming a major political issue.
Property crack down
Chancellor George Osborne last year ruled out the introduction of a mansion tax, which upset coalition partners the Liberal Democrats who initiated the idea, and instead is planning to crack down on the use partnerships and businesses for foreigners to buy property and avoid stamp duty.
The Chancellor is now planning to introduce a 15% stamp duty land tax on properties worth more than £2 million being bought by non-UK citizens.
UK citizens buying property valued at £2 million or more will see their stamp duty being hiked up to 7% and the closing of a loophole which allowed HNWIs to use companies as a vehicle to buy property.
There is also to be a new annual levy on corporate vehicles and the introduction of capital gains tax on purchases made through a company.
