Planning to leave the UK?

A protection solution for Professional Clients

Here is a case study about an American entrepreneur who has agreed to sell their UK business and plans to move back to the US. This case study demonstrates the use of Private Placement as a wealth protection strategy whilst offering access to exclusive funds.

Scenario

In 2007, David decided to set up his own business in London. He successfully grew the company over the course of the next 15 years. After surviving the banking crisis, Brexit and even thriving during the Covid lockdowns, he has managed to secure the sale of his majority shareholding in the privately-owned firm.  As his exit deal from his company, David will be receiving £16m over the course of the next 4 years.

David would like to move back to America once his business affairs in London have completed. He divorced back in 2010 and never remarried. His adult children are financially independent. He would like to live relatively conservatively in a familiar area, near to where he grew up. David has accepted he will need to pay more tax than planned to exit his business but dislikes this and is looking for solutions for the business proceeds to grow tax-free, but in a compliant manner in the future. As a business owner, he has always operated within the law and followed regulations.

Tax considerations

The UK no longer affords the tax benefits of Entrepreneurs’ Relief to business creators. The renamed Business Asset Disposal Relief means that David will be paying Capital Gains Tax at 18% above the first £1m.

David does not want the business to be in his estate when he passes away given that the new Business Relief rules implemented on 6 April 2026 would mean that Inheritance Tax applies.

The US taxes American shareholders of non-American businesses quite heavily. David is seeking tax advice from his US accountant in London to ensure that the timing of the sale of his shares is as tax efficient as possible.

Recommended action

Vie International has assessed David as a professional client for the UK regulator.  In the US, he would be classed as an accredited investor following a checklist of criteria based on his wealth and investing experience. This qualifies him as a suitable client for a Private Placement Life Insurance [PPLI] policy.

If David can allocate a third of his liquid assets to a PPLI policy, he will be able to invest annual tranches into this protection policy allowing his investment manager to grow the premiums paid tax efficiently. David cannot influence the investment strategy in order to comply with the investor control doctrine in the US. David also needs to forgo ownership of the policy that will instead benefit his children in a tax efficient manner.

As David is moving to the US soon, a Magnastar PPLI policy insured on David’s life will be purchased with 4 planned annual premiums totalling $10m. This type of policy provides both the protection of life insurance as well as the tax deferred growth of the life insurance premiums in the US. The premiums will be invested into a series of Insurance Dedicated Funds [IDFs] made available through the insurance company and the fund platform.

The client is satisfied with diversifying a third of his liquid assets into a Private Placement vehicle that is US compliant and intends to nominate his children as beneficiaries. They will be informed that this policy is a legacy of David’s business success in London and advised on subsequent planning choices.

Contact Vie International today if you are interested in learning whether this planning solution may be suitable for your circumstances.