Latin American money has re-diverted to the US following Brexit

Date: 22 Sep 2016

Bumblebee Design

Joshua Rubenstein, national head of trusts and estates and national chair of private client services at Katten Muchin Rosenman says Brexit is having an impact on Europe.


Is the US election causing problems?

The upcoming US election is causing not just psychological but also digestive disruption. While some think a Trump presidency will work for the domestic economy, as he is generally regarded as pro-business and has promised to lower corporate taxes, as well as repeal the estate tax, everyone fears the instability he will cause on the world stage, which in turn cannot be good for business. The concern with a Clinton presidency is that tax rates will rise.

Perhaps because of Panama and Brexit we hear wealth is restructuring into the USA? Have you seen this trend?

Yes, many of my clients are restructuring in the US, in progressive trust law jurisdictions such as Delaware, New Hampshire, South Dakota and Wyoming although it’s not exclusively.  While avoidance of CRS type disclosure of beneficial ownership is a motivating factor, it won’t be a primary reason for moving. Primary reasons are diversification of political and reputational risk from some trust jurisdictions and having access, if something goes wrong, to a judiciary that has a positive view of trusts.

Other wealth management trends?

The asset that most UHNW individuals seem to want to park their money in is US real estate. The high end of the real estate market is very strong and, at least seemingly, very stable, particularly in highly desirable areas like Manhattan and Beverly Hills where supply is limited. 

Is there still an influx of clients from Latin America?

The influx of HNW and UHNW clients from Latin America continues unabated. There had been a siphoning of some of that influx to Europe, and particularly Spain and Portugal, but fear over the ‘Brexit effect’ and the ongoing European debt crisis has re-diverted much of the influx back to the US.

Moving to other topics, are there concerns among blue-chip corporates about the EU judgement in the Apple vs. Ireland case?

Yes. As with all the other change we have seen in information sharing and tax collection enforcement, I think the next concerted effort we will see is going to be the end, or at least drastic curtailment, of treaty shopping which means multi national companies won’t be able to set up in certain countries for tax advantages without hard, government scrutiny. 

Tell us about wealth and the art market in the USA.

The US art market mirrors the US economy in general.  The very high end is on fire.  Below that it is a very unstable and erratic. 

Is the tech sector continuing to boom?

Yes, the tech sector is exceptionally strong.  Beware the bubble. Memories are short.


This article was published in Citywealth Weekly, our mid-week roundup of topical news and exclusive expert comments. Sign up here to start receiving the Weekly in your inbox.


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