Five-minute interview with Fiona McClafferty, senior manager, Deloitte
Fiona McClafferty is a senior manager in Deloitte’s newly expanded GCC regional private client services team headquartered in Dubai. Citywealth spoke with her about her work with the Middle-Eastern clients, the impact of taxation on their investment abroad, and the life in the United Arab Emirates.
What are the main concerns your clients are facing?
Many families are concerned about the impact of taxation on their investments abroad, for example with the recent frequent changes to UK tax legislation with regard to UK residential property. We also see in the market an opportunity to help so-called delinquent US taxpayers regularise their position with the IRS. The widespread publicity surrounding FATCA is reaching the ears of those ‘accidental Americans’ as well as those who were not aware that US citizenship brings with it filing obligations to the Internal Revenue Service. Finally, the other main theme is succession planning and family governance. Increasingly families are witnessing the fallout from messy, acrimonious disputes about inherited property amongst their peers or neighbours and are keen to start thinking about how their wealth can be successfully transferred from one generation to the next.
How are global tax agreements influencing your work?
We are waiting to see the effect of Common Reporting Standards that should be implemented in January 2017. In a region where the family business reigns supreme in the economy, confidentiality can be key for some families, and the prospect of data sharing across borders ahead is anathema, bearing in mind that many residents, long-term expats included, are not used even to information being available to domestic regulators and authorities. This is less about secrecy, or an intention to avoid or evade tax, but is driven more by genuinely held concerns for confidentiality whether or not these are justified.
What do you see as the main challenges for the year ahead and what aspects of your work are most satisfying?
Throughout my career, I’ve met many people, from a wide range of backgrounds who are daunted by the concept and complexities of tax. I take great satisfaction from being able to allay their concerns, and translate tax rules into layman’s terms. This aspect of my job has become even more important when working with clients who have always lived in a tax-free jurisdiction, and who are nervous about doing the wrong thing, making a mistake, or think a tax bill is going to be ruinous. I’m a strong believer in the idea that a happy life and preferred lifestyle should take priority over tax, for example if a complex and expensive structure provides the most optimal tax outcome. But if it requires a family to spend time apart, or restricts the number of days they can spend in a particular jurisdiction causing them to miss important events or family milestones, then to my mind, it’s not worth it. Quite often clients start off with the intention of focusing on tax mitigation at all costs, but often change their mind when they are aware of the impact it could have on their family.
What do you do in your spare time?
I am taking twice weekly Arabic lessons, so these, and the associated homework are quite a commitment but one which I really enjoy. Otherwise, I love loading my bike into the back of my car and heading out to Al Qudra which is a dedicated 100km cycle track in the desert outside Dubai. There, you’re almost guaranteed an oryx or camel sighting, and as the days get warmer, cycling at night under the stars amongst the dunes is a great counterbalance to the busy Dubai lifestyle. I also enjoy travelling, both around the emirates as well as around the region, visiting souqs, which are local street markets, wadis, which are desert valleys, forts, museums, beaches, and mountains. Top of my wish list is to visit the Nabatean city of Mada’in Saleh, a Saudi version of Petra, but possibly less crowded