Some frequently asked questions…
Q. What is the process of Lifestyle Planning?
A. LSM has a well established and efficient process in place, refined over many years.
However, Covid 19 has made certain changes necessary to ensure the safety of our clients, staff and partners.
Presently personal meetings may be replaced by zoom and other call methods, which whilst not perfect ensures continuity of service.
We are still here and have not gone anywhere, we are here to support you.
Q. Why should I meet Lifestyle Management Team? I already have a Financial Adviser!
A. We would hope so. Most professional expatriates and nationals of Kenya have someone who assists with their financial affairs, we would be concerned if you didn’t! Our role at LSM is to look at the holistic big picture. Much more than simply financial advice.
Q. Does Lifestyle Management charge a fee?
A. We only charge fees for specific types of services and where relevant, any such fees will be discussed and explained in detail before agreement.
Contact us for more information.
Q. Is this just financial sales?
A. Absolutely Not!
As you can see above, we are about holistic Lifestyle Planning. This is not about a financial sale, nor is it about budgeting, taxes, investments and insurance etc; but the broader context of your goals and aspirations for the future for you and your family, and how you are going to be able to achieve them.
Q. Why should I not invest in my own Country? (Onshore & Offshore)
A. Onshore Investments – It is the keeping of money in the jurisdiction of one’s country. Investing onshore is not immune to risk and carries its own pitfalls. Sometimes there is the perception that because you are investing in an onshore vehicle it is safer. However, market risk or other financial risks are very much the same. Moreover, the structuring aspects of onshore funds sometimes come with their own risks.
Offshore Investments – is the keeping of money in a jurisdiction other than one’s country of residence. Offshore jurisdictions are a commonly accepted means of reducing the taxes levied in most countries to both large and small-scale investors alike.
The advantage to offshore investment is that such operations are both legal and less costly than those offered in the investor’s country – or “onshore”. Payment of less tax is the driving force behind most ‘offshore’ activity.
For Your Information!!!
Kenyan Banking Security
Have you declared your Tax Amnesty and want to know more?
Click on the link below:
What is Common Reporting Standards (CRS)?
How does CRS work?
Under CRS, financial institutions located in participating countries will be required to carry out enhanced due diligence procedures to both their existing and new financial account holders. These are aimed at establishing the tax residence of the holders of financial accounts, including individuals who control such accounts through conduit investment entities.
Subsequently, details of these financial accounts are then automatically exchanged annually between tax authorities of participating countries The result is that any disparity between the information given and the tax resident’s declaration raises a red flag that may lead to further investigation by the tax authority.
Scope of CRS
The OECD has designed CRS to cover a broad scope that runs across four key areas namely:-
- Reportable income
One may wonder what income is considered to be reportable income. This includes all types of investment income including interest, dividends, annuities, and other similar income, proceeds from the sale of financial assets, and account balances. It is noteworthy that this list is not exhaustive.
- Reportable accounts
In the event that a tax resident holds a financial account in a country that has signed up to CRS, such an account is referred to as a reportable account. But who is a tax resident individual for CRS purposes? If a person is liable to tax in a certain country by virtue of being domiciled, resident, or having its place of management in that country, then that person will be considered to be a tax resident in such jurisdiction. Where a person is a tax resident in multiple countries, their account balances and income will be reported to each of the participating countries.
iii. Financial institutions
The financial institutions required to report under CRS include banks, brokers, trusts, custodians, certain collective investment vehicles, and certain insurance companies. The term “financial account” under CRS has an even broader meaning than depository accounts. It also refers to any custodial accounts and certain types of insurance policies. “Financial accounts” under CRS also relates to any debt or equity interests that are held in investment vehicles such as trusts. In corresponding fashion, a “financial institution” has a broad definition that goes beyond banks; it also means investment managers and trustees.
Though noble, CRS will probably face a number of challenges. It was developed by the OECD which is perceived to be a pro-developed countries institution. As such, there is a risk that there may be subdued political goodwill from LDCs especially when some of the likely targets are running and/or influential within those very countries expected to sign up. Moreover, there are no incentives for LDCs to sign up and commit the resources required to make CRS work.
As critics have also noted, CRS has some loopholes. For example, CRS only applies to financial institutions located in the participating jurisdictions and therefore does not have universal application. “Clever” individuals may thus escape disclosure by playing around with their residency for example establishing fictitious residences in non–participating jurisdictions. There also seems to be scope for individual countries to limit their co-operation to only those countries they would like to. While financial institutions are broadly defined, there is still room left for manipulation so as to avoid disclosure such as on trusts.
Despite these shortcomings, if CRS is implemented, even to a limited number of countries worldwide, it would represent the best hope yet in piercing the cloak of secrecy that has thus far protected illicit funds transfers globally.