The winding journey of client affairs

Date: 26 Oct 2017

Bumblebee Design

Paul Davidoff, partner at Moon Bever, tells Citywealth about his client instructions, challenges posed by cryptocurrencies, and his bike riding.  

Tell me about your role at Moon Beever.

I joined Moon Beever from Bircham Dyson Bell as a partner at the beginning of 2017 to take over as head of the private client team, which has six fee-earners. I draw on my experience from previous firms to help the team work well and I encourage continual technical development and knowledge-sharing.

Can you tell us about any international client instructions?

I have been advising a family initially on one, and then two multi-million pound non-UK trusts. The original trust was reviewed by HMRC to check the UK tax treatment. Some of the family are resident in France and there have been concerns about how the French tax authorities would treat the original trust, as a result of which we went through a complicated process of splitting the original trust into two separate trusts. Both French and UK resident family members have wanted to receive distributions from the trust and one of my key roles has been managing the family’s needs and explaining the UK tax treatment of what they receive from the trusts and the various scenarios should the trusts be wound up. 

I have also just been advising a US/UK couple about the wife’s UK tax affairs. She inherited from two US trusts following the death of a step-parent. Her inheritance was payable to another US trust and not to her directly, but she then received a distribution of a few millions dollars from the latter trust, which would have triggered a capital gains tax charge of around £1m. Because of the way the gains flowed through the trusts and when the original gains had arisen, she would not have to pay any CGT if she were domiciled outside the UK, which we established was the case.

What about your UK clients? 

I advised a family in relation to an old life interest trust, where the life tenant had just died. The settlor and life tenant had had three children, but the terms of the trust were that the children had to survive the life tenant. Only two of them did. The terms of the trust did not allow the children of the son who had died to inherit and, because this was not a will trust, a deed of variation was not going to help. The sums involved made it disadvantageous for the two surviving children who were in their seventies, to make a simple gift to their nephews and nieces of what they stood to inherit from the trust.  In the particular circumstances of this family and their estates, we were able to find a way for the two surviving children to disclaim their interest in the trust, which meant that the trust fund reverted to the settlor, through the settlor’s will to the life tenant’s estate, then through the life tenant’s intestate estate back to the two children and also the children of the deceased son.

What are the main challenges your clients are facing?

Many of my clients need to update their wills in the light of EU Succession Regulation, because this has changed what they can and cannot do with their assets in the EU. In many cases, this provides an opportunity to do what they previously could not because of forced heirship regimes.  

More  clients are needing advice about their UK residence and domicile position, because this is going to make a substantial difference to their tax position in this country. UK residential property taxes are also high on the list, although sometimes I need to alert my clients to the fact that they are going to affected by these taxes first.

Will the UK benefit from Brexit?

No. I still expect there to be another referendum and that we will end up ‘remaining.’

Tell us about an achievement you are most proud of.

Getting myself fit. Until my mid-teens I was very unfit, having played goalkeeper in football and hockey for some years.  I even came last out of about a hundred in my year in my school’s annual cross-country race when I was fourteen. Within two years, I had gone from last to seventh place and was in both the school cross-country and athletics teams, although I was a sprinter rather than a long-distance runner. I was particularly proud of it because no one had told me I needed to get fit and no one was holding me to account. I just decided that I would do it and I stuck at it through numerous injuries. I have that decision to thank for the many other things that I have enjoyed over the years, in particular rowing, cycling, climbing, hiking and dancing.

What trends do you see?

Ever more firms seem to be marketing themselves as family offices but what is meant by family office varies enormously.

Social media like LinkedIn and Twitter are steadily becoming key to establish a presence in the market.  More law firms and other private wealth businesses are using them that way.  The trick is to use them to build business in a consistent and predictable way but I have come across very few who have managed to do it beyond merely announcing accolades or publishing articles. 

Finally, digital assets are coming more and more to the fore, not least with the first property transaction having just been completed using cryptocurrency.  Bitcoin, Ethereum and the like are increasingly becoming a source of wealth and the challenge we have ahead is understanding how those digital assets can be used, controlled, transferred and taxed. 

How do you relax after a long day?

My wife and I try to go dancing once a fortnight, baby-sitter permitting. Normally lindy hop, but there are a few other dances that we’ll throw in from time to time, such as boogie woogie, charleston, jive, salsa, even the occasional waltz. 

Otherwise, I do like to get out for a run or a decent bike ride. If I’m tired, then I do enjoy the distraction of The Times crossword.


Click here to view Paul Davidoff’s profile in Citywealth Leaders list and leave a review and star rating.