MOMENTOUS WEALTH TAXATION EVENT LIFTS VEIL ON OFFSHORE STRUCTURES

Hosted by the South African Institute of Taxation (SAIT), in collaboration with Tax Consulting South Africa and Standard Bank, the International Tax Structures for South African and African Wealth webinar proved to be exactly what this class of taxpayer had been waiting for.

The message that emerged strongly from the presentations was that the wealthy of South Africa and Africa need a multi-jurisdiction network of trusted advisors that have expertise in taxation, fiduciary compliance, and wealth management.

Says Keith Engel, CEO of SAIT: “You need a conglomeration of people who work together. The days of having one person do it, sadly, is no longer enough.” This is in light of tighter cooperation between international authorities and increasingly coordinated policy to enforce taxation on the wealthy.

Outstanding thought leaders

Keynote speakers included Judge Dennis Davis (Chair – Davis Tax Committee); Keith Engel (CEO of SAIT); Natasha Singh (Director – High Wealth Individual Unit at SARS), Michael Giraud and Jonathan Sprigg (Head of Fiduciary Services at Standard Bank in Jersey and Mauritius respectively); and Jerry Botha (Managing Partner at Tax Consulting SA).

These highly respected and sought-after industry experts with decades of experience in taxation and offshore structures were supported by some of the top professional presenters in their fields.

Panel discussion on wealth tax

In the opening panel discussion, the highly esteemed Judge Davis, Keith Engel and Jerry Botha reviewed wealth tax and general tax policy, analysing various subjects like wealth tax versus estate duty, wealth disparity in South Africa, the extent and limitations of current third-party information sharing capabilities, and more.

Judge Davis also reiterated that the Davis Tax Committee did not recommend a wealth tax, but rather that Government should consider it. Reason being is that it would be very difficult to implement and was in fact “not the silver bullet” that everyone believes it to be.

Keith Engel made the point that the use of 3^rd party data and improved enforcement is what could alleviate the problem. The discussion then moved toward SARS and that they seem to know a lot more about people’s international holdings than they did in the past. “They do, and revenue authorities all around the world do,” confirmed Judge Davis.

SARS presentation hits hard

A highlight of the webinar was the presentation by SARS’ High Wealth Individual (HWI) unit Director, Natasha Singh. Singh provided eye-opening insights into SARS’ approach to enhancing its interaction with and enforcement of HWI’s and its increasing ability to carry out its mission.

She noted that her unit is not just scrutinising individual taxpayers but also their related entities and persons as a combined economic unit. Elaborating on the authority’s use of third-party data, Singh quipped that the unit knew “all but what you had for breakfast.”

A new way of managing wealth and taxation

Other spotlighted topics included offshore wealth considerations, the practicalities of an offshore structure, the UK and its Crown Dependencies as favourable emigration destinations, and the offshore pitfalls caused by ill-informed advisors.

The golden thread throughout the topics was that wealth management and taxation are becoming increasingly sophisticated in a highly-regulated world. There is a critical need for holistic planning and a clear roadmap to preserve one’s wealth and ensure adopted tax structures are secure against emerging global policies and tighter inter-jurisdictional controls.

This creates previously unheard-of complexity that requires a highly collaborative team of internationally positioned advisors to ensure their wealthy clients avoid new legal pitfalls in the offshore space.

The perfect appetiser

80% of attendees rated the event and individual topics as ‘Excellent’ and all confirmed they would attend a similar event in the future.

So, it was the perfect appetiser for SAIT’s upcoming Tax Indaba which promises to continue to provide insights into emerging taxation trends and how to respond to them. The event takes place from 5 – 7 September 2022, and more information is available on the Institute’s website.

SAIT’s Engel closed with a warning: “Don’t take this lightly, you are in the economy, you are in a formal economy with formal wealth, and you have to play it right.”