Updated: Aug 20, 2021
Alexander MCBARNET | Rhone High Value Asset Services SA
Yachts, aircraft, artworks, classic cars and certain other premium assets are aspirational, they are the goals that many people strive for and the realisation of their dreams. But realising these goals constitutes a major investment in time, energy and money and they carry huge potential legal and fiscal implications. Acquiring such assets should not be undertaken lightly.
Yachts and aircraft, in particular, are highly mobile assets that will in all likelihood cross international borders, opening them up to myriad tax systems. They can also expose the owner to significant legal liabilities. Along with other premium assets a specific and tailor-made ownership structure should be considered in order to separate the beneficial owner from the asset and reduce personal liability. A well-conceived and managed ownership structure should also ensure operational efficiency and provide oversight and cost control. And finally, the ownership structure should facilitate the eventual disposal of the asset or transfer to a new generation.
Once owned, the assets will also need to be looked after and managed effectively. This may encompass insurance, safety, security, crewing and finance amongst many other services. It is unlikely that any one single service company can be expert in all the required areas and so a number of companies will need to be engaged in order to ensure that the beneficial owner is able to enjoy the asset to the fullest degree.
When things go wrong owning such assets can become an unbearable headache and in many cases the reason for selling the assets is not that the owner no longer wants them but rather that the complexities of owning them have become too much and the owner is no longer able to enjoy the assets properly. As in so many things, being prepared and having the right information is key to a successful outcome.
In order to properly acquire, structure and manage these assets an owner needs to be surrounded by an expert team, all able to work together to put the owner’s best interests first. This team may comprise lawyers, tax advisors, brokers, safety and security specialists, technical consultants and many more. Putting together such a team and ensuring that they work together in a harmonious way is in itself quite a task. This is where a generalist advisor or owner representative, with the right expertise, experience and network, can become crucial to the project.
Many people, including staff of family offices, lawyers and brokers, now offer general advice as well as their more specialised services and some are indeed very capable and provide the client with an excellent service. However, care should always be taken to ensure that a general advisor or owner representative does indeed have the right expertise, experience and network whilst also not having any hidden agendas or conflicts of interest. In many cases an independent advisor, with no other role, may prove to be a better option.
As well as ensuring that the client has the most complete information and best understanding of the issues as possible a general advisor or owner representative should also put together, or at least coordinate, all of the other service providers needed in order that they work together in an open, professional, effective and efficient manner, with the best interests of the owner at heart.
With the right advisor or representative by their side an owner can be more confident that their assets will bring them the enjoyment and rewards that they rightly expect.
Rhone High Value Asset Services SA
(a subsidiary of Rhone Trust & Fiduciary Services SA)
Alexander MCBARNET, Partner
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