Estate Living Digital Publication Issue 7 July 2015 | Page 44

can gain access to the world’s top global brands and
corporate titans as well as exposure to sectors and
markets not well represented by the JSE, such as
biotechnology and technology stocks.

INVESTMENT SAVVY

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Depending on the investor’s risk profile, another
good opportunity is the use of a multi-manager unit
trust portfolio. By blending the investment styles of
‘best of breed’ asset managers with proven track
records, a wealth manager can control the risk and
return attributes of various portfolio solutions.
Institutionally diversified portfolios spread asset
manager risk so that portfolio returns are not driven
by the style, strategy and philosophy of only one asset
management house.
Deciding on which vehicle an investor chooses to
implement the underlying assets is just as essential.
Offshore investment vehicles
MacSymon explains that there are several effective
offshore vehicles that Private Client Holdings can
recommend to investors who are looking to invest
offshore.
International retirement and savings plans, also
known as Retirement Annuity Trust Schemes (RATS),
provide an effective vehicle for building long-term taxefficient wealth offshore. RATS fall under Guernsey
pension legislation and, for Guernsey Income Tax
purposes, are exempt from income tax. In addition
to the tax-saving benefits, RATS offer a flexible and
cost-effective solution for building wealth offshore
and are particularly useful for effective wealth

transfer to future generations. The Private Client
Holdings Offshore Segregated Portfolio invests in the
some of the world’s best global brands and can be
positioned as the underlying investment solution
within a retirement annuity trust.
Alternatively, the use of a sinking fund or an
endowment wrapper can ensure tax on interest and
capital gains tax is pegged at a level lower than what
an investor might pay in their own marginal capacity.
For instance, investors who pay tax at 41% for every
additional rand earned would probably prefer to pay
30% tax on interest. Similarly, capital gains tax can be
pegged at 9.99% using an endowment or sinking fund
structure, which compares favourably relative to the
maximum effective rate of 13.67% investors would
pay if capital gains were to be taxed in their personal
capacity. Sinking fund or endowment wrappers also
have compelling estate planning benefits.
Given the variety of international choice of offshore
investments, MacSymon advises that investors
wanting direct offshore exposure should consider
the offshore offerings of local fund managers who
they have know and trust.
Contact
021 671 1220
[e-mail]
www.privateclient.co.za