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Q: For Jem ONLY .... ( Answered 5 out of 5 stars,   4 Comments )
Question  
Subject: For Jem ONLY ....
Category: Relationships and Society
Asked by: probonopublico-ga
List Price: $10.00
Posted: 21 Aug 2003 13:31 PDT
Expires: 20 Sep 2003 13:31 PDT
Question ID: 247390
Assume that a UK resident wants to 'ring fence' various properties
presently free of any charges from prospective litigants.

Evaluate: (a) mortgaging and transferring funds offshore; (b) making
them subject to 'Declarations of Trust'; and (c) any other viable
option.

Would it be necessary for the UK resident physically to move offshore
or not?

Would an EC country be OK or not?

You get the idea ... Now please produce your usual magic.

Request for Question Clarification by jem-ga on 21 Aug 2003 23:31 PDT
Good morning Bryan :)

Many thanks for requesting me - the pedestal PA system is in fine
working order ;)  Now, this is a very tasty question indeed - what ARE
you up to...?

I'll be working on it this morning for you - can I clarify one aspect,
namely;

<<Evaluate mortgaging and transferring funds offshore>> - can I assume
that you mean you want to know if a UK resident can also ring fence
the mortgaging (and therefore eventual transfer of funds) transactions
themselves?

Kind regards
jem-ga :)

Clarification of Question by probonopublico-ga on 22 Aug 2003 00:37 PDT
Hi, Jem

You got it!

It's great to know you are on the case.

Regards

Bryan

Request for Question Clarification by jem-ga on 22 Aug 2003 04:25 PDT
Thanks for the vote of confidence Bryan :)

Am just waiting for some info from an overseas source so taking the
time difference into account, I'm hoping to get an answer to you
sometime later this afternoon/early evening.

:) jem-ga

Clarification of Question by probonopublico-ga on 22 Aug 2003 04:39 PDT
Brilliant.

There's no rush.

Many thanks.

(Time Difference? Where are you based? Everyone should use GMT, like me.)
Answer  
Subject: Re: For Jem ONLY ....
Answered By: jem-ga on 22 Aug 2003 06:47 PDT
Rated:5 out of 5 stars
 
Hi Bryan :)

Thanks again for another interesting question and for confirming my
earlier clarification.

Re: your comment <<Time Difference? Where are you based? Everyone
should use GMT>> you know very well that I'm based in the UK, I think
you're just trying to narrow the location down ;)  My overseas contact
is several hours behind GMT time, hence I wanted you to be aware that
there might be a slight delay based on the time difference.  Yes, I
prefer using GMT time too - particularly based on a 24hr clock -
amazing how many people are perplexed by this!

Now, onto your answer :) I'm providing this information on the
assumption that you're on a bit of a reconnaisance mission re: initial
information i.e. you're after information which can potentially point
you in the right direction for future excursions at a later date.  Of
course, if anything in my answer requires clarification, please do let
me know.

For the purposes of this question, there are at least two ways for a
UK individual to ring fence various properties (and related mortgage
and funds transfers) from potential litigation.  Please note that both
methods are:

1. not cheap and;
2. subject to certain limitations (and there is no iron clad guarantee
that the assets would not eventually come under the scrutiny of the UK
courts, should the litigants, for example, be particularly saavy with
respect to asset-tracing or be particularly tenacious, etc.)

A. One way is to set up an offshore trust. There are many different
types of offshore trusts - some of them do require the individual to
be domiciled outside of the UK (and yes, in these instances,
generally,an EC country would be okay) BUT there are also some types
of offshore trusts where the individual does NOT have to reside
outside of the UK. There are, of course, tax implications, but that's
an entirely separate specialist matter!  In both cases, the property
(and related mortgage and fund tranfer activity) would be protected
against potential litigation subject to the following:

1. Any limitations that the country in which the trust is set up
places on asset protection trusts and;
2. English law, as the law of the land where the property is situated,
recognising the trust and giving effect to the law governing the
trust.

There are certain offshore jurisdictions which are more relaxed than
others with respect to recognising asset protection trusts, secrecy
laws and so on which is why it pays to see a specialist advisor when
contemplating setting up any kind of offshore trust.

B. Another way is to set up a company structure to hold the assets. 
Again, although in principle this will provide protection against
potential litigation, it is also subject to similar limitations as
outlined at paragraph A above.  In particular, the UK courts have, as
a matter of principle, drawn a distinction between the setting up of a
company to avoid potential future liabilities and setting up a company
to avoid liabilities that are, for example, presently owed to
creditors - the first is okay, the second is not. The case law you
need to look at is Adams v Cape Industries (Court of Appeal judgement)
- I don't have a copy to hand but I know that Gray's Inn does :)
 
Some further food for thought:

1. Online Landlord found at:

http://www.online-landlord.co.uk

offers a service called an Offshore Property Bond - see

http://www.online-landlord.co.uk/downloads/offshore_property_bond.pdf

The structure of their Offshore Property Bond is similar to the method
outlined at paragraph B above and an excellent Q&A on what you can and
cannot do with the Offshore Property Bond can be found at:

http://www.online-landlord.co.uk/content/ofshre_property_bond.html

For example, you can mortgage the properties via offshore borrowing
with an Offshore Property Bond.  The costs are quoted at circa £10k to
set up and circa £5-10K per year to administer.  This is merely one
example of the type of structure discussed at paragraph B - various
industry professionals will have different methods and set up
structures and it does pay to shop around.

2. Online Landlord also offer an Offshore Trust (i.e. a structure
similar to that discussed at paragraph A) but note that the individual
must have non-UK domicile status in this instance - again, see:

http://www.online-landlord.co.uk/content/ofshre_property_bond.html

Again, this is merely an example of a type of offshore trust that can
be created.  As discussed at paragraph A, there are offshore trusts
which CAN be set up where the UK individual does NOT have to reside
outside of the UK.

Signing off at 14:49 GMT + 1 hr
jem-ga :)

Search Strategy:

Keywords: ring fence properties UK

://www.google.com/search?hl=en&ie=utf-8&oe=utf-8&q=ring+fence+properties+UK

Keywords: protecting UK assets from litigation

://www.google.com/search?hl=en&ie=utf-8&oe=utf-8&q=protecting+UK+assets+from+litigation

Further research:

Discussion with litigation lawyer of UK law firm
Discussion with litigation and trust lawyer of offshore law firm

Clarification of Answer by jem-ga on 22 Aug 2003 06:49 PDT
Ahem....technically signed off at 14:47 GMT + 1 hr as per Google timestamp

:) jem-ga

Request for Answer Clarification by probonopublico-ga on 22 Aug 2003 11:35 PDT
Hmmmmmm

'Now what was Little Jem doing at a Richard Branson Press
Conference?', I ask myself.

I guess it's one of those things that I will never find out.

Clarification of Answer by jem-ga on 22 Aug 2003 12:07 PDT
<<'Now what was Little Jem doing at a Richard Branson Press
Conference?', I ask myself.>>

He was one of several live interviewees at the event - I seem to
remember the champagne being particularly good :) jem-ga
probonopublico-ga rated this answer:5 out of 5 stars and gave an additional tip of: $10.00
Jem ...

You just get better and better.

Exactly what I wanted!

(I suspect you must be a team of people working out of a secret bunker
in Cheltenham. Or is that another question?)

Kindest regards

Bryan

Comments  
Subject: Re: For Jem ONLY ....
From: jem-ga on 22 Aug 2003 08:02 PDT
 
Hi Bryan :)

Glad to have helped and many thanks for the 5* rating and the tip :)

Re: secret bunker in Cheltenham, that was something I told Daisy
during our recent champagne session to throw her off the scent -
secret lairs must be protected at all costs ;)jem-ga
Subject: Re: For Jem ONLY ....
From: jem-ga on 22 Aug 2003 12:12 PDT
 
p.s. have a good bank holiday!!!  Lots of gardening for me this weekend methinks!

:) jem-ga
Subject: Re: For Jem ONLY ....
From: iso8601-ga on 26 Aug 2003 17:27 PDT
 
NOTE:  You mentioned GMT here. 

GMT was officially replaced by UTC in 1971.

See International Standard ISO 8601 for more (also defines a way of
writing the date so that US and European folks don't get confused. 
Previously 12/01/2003 was December 01 in the US, but 1st January in
Europe; the new style YYYY-MM-DD is always 2003-12-01 for 2003
December 01).
Subject: Re: For Jem ONLY ....
From: probonopublico-ga on 26 Aug 2003 21:41 PDT
 
Hi, ISO

1971?

Did you say 1971?

Surely, you meant 1791?

Bryan

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