The regulator is consulting on plans to introduce a single standard for corporate bond prospectuses, which would cover issuances of any size.

According to the FCA, this would reduce costs and barriers for companies raising capital while providing investors the information they need to make an informed decision, the regulator said.

The proposals aim to encourage listed companies to offer bonds in smaller sizes, improving investment opportunities for wealth managers and retail investors.

Meanwhile, the regulator has also proposed a simplification of requirements that apply to listed companies when they issue further shares.

“We’re opening the door for corporates to issue bonds in small sizes so that a wider range of investors can invest in them. That’s more funding for companies, more easily, and more choice for investors too,” said Simon Walls, interim executive director of markets at the FCA. 

“We want to make sure investors have the information they need to make informed decisions about risk while removing unnecessary costs and widening access.” 

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Reaction

Investor Access to Regulated Bonds (IARB), an industry working group sponsored by the London Stock Exchange, has advocated for increased retail and wealth investor access to bonds.

Commenting on the proposals, IARB chair Stacey Parsons said: “Change can only be achieved with the modernisation of both regulation and historic market practices. Today’s consultation from the UK Regulator allows exactly that.

“Offering industry stakeholders the opportunity to support a simplified and renewed regime removing complexities and delivering broader investor participation to the largest capital market in the world: Bonds. It is critical we support these changes, alongside the right education and guard rails for investors.”

See also: Is it time to re-consider thriving China funds amid their rally?

Michael Smith, head of debt capital markets at Winterflood, added: “It’s important that the proposals give issuers choice. Issuers can continue to use high denominations if they want to – but the incentive to do so, which has driven the market to favour high denomination wholesale-only bonds, is being removed. If the disclosure regime is the same irrespective of the denomination, surely, using a lower denomination makes sense because this gives you a bigger primary and secondary market. This is additive demand too.

“If an issuer really wants to restrict retail access, it can, it will select a high denomination.  I anticipate this will be the case whilst advisors and issuers observe what their peers do.  But I look at the corporate bonds that have been issued over the last few years and I just don’t see many that wealth managers and even individuals wouldn’t want to be restricted on.

“Using credit ratings as a proxy for risk, bonds listed in the UK are predominantly investment grade. Investment grade doesn’t mean risk free but if you’re going to expose retail to bonds, this is precisely where you start.  So, we are fully supportive of what the FCA is doing here.  Retail had access to bonds before 2005, so it’s not like we’re breaking new ground.”

The Aegon Sustainable Diversified Growth and Aegon Sustainable Equity funds intend to adopt the label from the end of March 2025 following shareholder notification.

Aegon also confirmed the Aegon Ethical Equity fund, Aegon Ethical Corporate Bond fund and Aegon Ethical Cautious Managed fund will not have UK sustainability investment labels, as they operate exclusionary screens and do not fit within the label categories defined by the FCA. However, they will be in the unlabelled with sustainable characteristics category, which will result in disclosures aligned with the labelled funds to ensure transparency.

Miranda Beacham (pictured), head of responsible investment at Aegon, said: “We are very pleased to see SDR is gathering momentum in providing greater clarity and confidence in the market for our clients and look forward to adopting the new labels for our funds.

“Our ethical franchise, remaining unlabelled with sustainability characteristics, will continue to be entirely unambiguous in its goals, an attractive proposition to some investors looking to align their values and views on responsible investing.

“Indeed, our Ethical Investor Survey – carried out every two years – ensures our funds stay aligned both to these goals, and also with societal changes.”

This story originated on our sister title, PA Future.

Instead, UK adults hold an average of 50% of their wealth in property and 15% in cash.

In comparison, US retail investors hold almost four times the amount (33%) in equities and mutual funds (outside of pensions), and just 26% in property.

With UK adults holding some £14trn in total assets, abrdn has urged the government to take action to address the UK’s risk culture and boost capital markets.

The firm’s analysis suggests that if UK adults raised their participation in investments to US levels, it could unlock up to £3.5tn for capital markets.

See also: London Stock Exchange sees fewer than 20 IPOs in 2024

James McCann, deputy chief economist at abrdn, said: “Investing culture is a very real part of American life. As an economist who has lived and worked in both the UK and the US, I have seen first-hand the stark differences in attitudes between the two countries around participating in financial markets.

“Equity ownership is more common in the US, where households hold a much greater share of their wealth in stocks and shares compared to their UK peers.

“Culturally, there is a greater focus on using financial markets to build financial independence in the US. I have been particularly struck by the prominence of the FIRE movement – Financial Independence Retire Early.”

Xavier Meyer, CEO Investments at abrdn, added that the UK is “streets behind many other developed countries” in terms of retail participation.

“Establishing a national culture of long-term share ownership will be crucial if we want to ensure healthy capital markets and shore up individuals’ long-term savings. We need a virtuous circle of good regulation, good products and both institutional and retail participation.

“Getting the UK investing is a critical challenge for society and, as an asset manager and investment platform owner, we aim to be part of the solution.”

See also: CIOs name trade wars and concentration risk as 2025’s top concerns

Meanwhile, interactive investor CEO and abrdn COO Richard Wilson believes that scrapping stamp duty on UK shares could provide a “big bang moment” to encourage more of the population to engage with the stockmarket.

“If stamp duty wasn’t a barrier to investing, why is it that we are losing systematically to the markets that don’t apply it? 

“Sweden, famed for its personal investing culture, applied a Financial Transaction (FTT) Tax of 0.5% between 1984 – 1991. Having removed FTT, the market has grown and the burgeoning activity in Swedish capital markets is enough to make the rest of Europe blush, if figures compiled by New Financial earlier this year are anything to go by.”

The regulator said it wants to replace prescriptive EU-inherited rules with a more flexible, outcome-focused approach. It has proposed that a CCI must be accompanied by a product summary whenever it is distributed to a retail investor, replacing key investor documents.

Firms will have more freedom to design product information, removing previous format and template requirements under the Priips regime, the regulator said.

Simon Walls, interim executive director of markets at the FCA, said: “The way people invest has changed. We want to ensure that firms can communicate with their customers in a way that gets them the information they need when they need it.

“High quality product information will give consumers the confidence to invest; increased participation in this market will not only benefit consumers but will also provide capital to drive the economy and boost growth.”

Cost disclosures

Under the proposals, CCIs such as investment trusts will explain performance fees and carried interest using narrative and examples in the product summary.

Reduction in yield figures will be replaced by summary costs over a 12-month period, while firms will be allowed the flexibility to describe what costs mean and their impact on returns.

Previously, investment trusts had been subject to a ‘double-counting’ situation where they were forced to disclose their costs as an ongoing charge figure (OCF), and then again through its impact on the NAV.

In November, The FCA allowed ‘forbearance’ for investment trusts in the disclosure of charges under the Priips and MiFID regulations as a temporary solution to the cost disclosure issue.

For investment trusts, the regulator has proposed that ongoing cost calculations would exclude costs incurred in the maintenance and commercial operation of real assets, as well as gearing costs.

“We consider that these costs are more accurately categorised as inherent costs of the underlying assets rather than costs of the investment. We agree that their inclusion can generate distortions that are unhelpful to consumer understanding,” the regulator noted.

The consultation is open to feedback until 20 March 2025.

See also: Are platforms hampering the investment trust cost disclosure victory?

While welcoming aspects of the consultation, Association of Investment Companies CEO Richard Stone said the framework “misses the mark”.

“This long-awaited consultation misses the chance for more radical reform. Whilst there are aspects to be welcomed, the FCA’s insistence that underlying fund costs are bundled into a single figure will not help consumers make better decisions as the regulator believes. Instead it would make it near-impossible for consumers to compare costs meaningfully where funds invest in other funds.

“It would also mean a continuation of the market distortion we saw under the old regime – creating disincentives for fund managers to purchase investment companies that offer exposure to renewable energy, infrastructure and other private assets – even when they think they provide good value.

“It’s not clear from the consultation how costs will be disclosed in the distribution chain – for example, by platforms or wealth managers. It’s essential to get this right as well.”

Stone added that one particular area of concern is the potential for investment companies be drawn into regulation as ‘manufacturers’.

“We are pleased with some aspects of the consultation and the recognition of some of the concerns that we and others have lobbied on. It is good to see the FCA propose that both gearing costs and operating expenses are to be excluded from the new cost disclosure regime, and that past performance is included.

“However, the continued inclusion of a risk indicator based on volatility is a flawed idea that the regulator should have scrapped. Moving from a 1-7 scale to a 1-10 scale doesn’t address the fundamental concerns with this approach.

“We would urge all stakeholders to respond to the consultation. It’s essential that we seize this moment to deliver a radically improved cost disclosure regime that helps investors make better choices.”

Reaction

According to the 2024 FCA Financial Lives survey, over 12.6 million UK investors hold an investment in a CCI.

Reacting to the consultation, Jonathan Lipkin, director of policy, strategy and innovation at the Investment Association, said: “Modernising the UK’s retail disclosure regime is fundamental to achieving a new culture of inclusive investment, where consumers feel empowered to make informed decisions that enable them to achieve their long-term financial objectives and build resilience. 

“We welcome the FCA’s consultation as an important opportunity to create a disclosure framework based on simplicity, flexibility, and digital innovation. In a Consumer Duty world, we support a customer-centric regime that provides decision-useful information in an accessible and relevant format, and that helps consumers understand investment products and compare them in a meaningful way.”

Christian Pittard, head of investment trusts and managing director, corporate finance, at abrdn, added that the consultation has “much riding on it and no time to lose”, with twenty-two closed end funds having left the investment trust sector in 2024, according to AIC data.

“The cost disclosure rules can’t be blamed for everything. But they have contributed more than anything to the historically wide discounts we see across the industry today. With the return of the activist investor to the UK, things may get worse before they get better for the industry. That’s less choice for investors, and less investment in UK productive assets.

“That’s why this consultation needs to be short and decisive. While open to new thinking, we continue to champion abrdn’s Statement of Operating Expenses’ template, developed with industry participants as a solution that we believe brings greater transparency.”

The Private Intermittent Securities and Capital Exchange System (PISCES) was proposed by chancellor Rachel Reeves during her Mansion House speech last month.

Under the proposals, the new platform would be developed using a ‘financial markets infrastructure sandbox’, which allows the regulator to test the design before finalising the permanent structure.

The Treasury is aiming to bring a statutory instrument before parliament by May 2025, which will provide the legal framework for the PISCES Sandbox.

The FCA said it expects to publish its final rules shortly after. The regulator is consulting on risk warnings for investors around PISCES.

See also: UK unemployment rates remains unchanged at 4.3%

Simon Walls, interim executive director of markets at the FCA, said: “Next year we will ring the bell on a new private stock market that could transform how private companies access funds and grow. It will offer investors more access and a greater confidence to invest in private companies and could act as a stepping stone to public markets for those firms. 

“We want to work with industry and ensure we have the right building blocks in place to support investment in growing companies.” 

Firms wishing to run a PISCES platform will have to apply to the regulator, and once approved will be able to run intermittent trading events.

Further information will be published in early 2025 for firms interested in running a PISCES platform. 

Tulip Siddiq, economic secretary to the Treasury, added: “PISCES will be an innovative new type of stock market for trading for private company shares and is a significant step forward in our reforms to capital markets. It will give investors the chance to get in on the ground floor of some of the most exciting companies and support the growth of those businesses.

“Today’s consultation marks a significant step towards delivery of the new market next year and sits alongside our wider programme of reforms to boost competitiveness and investment. That includes the FCA’s overhaul of the UK listing rules and the creation of pension megafunds which will unlock billions of pounds of potential investment in businesses.”

Pisces would create a regulated market for private shares, acting as a “stepping stone” to listing on public markets and allowing investors access to further growth stage companies, according to the Treasury. The concept will begin with a five-year sandbox period to determine if it should become a permanent piece of UK legislation.

During this time, it will be open only to institutional investors and operate at intermittent trading windows. Companies will not be able to buy back shares, and will not facilitate capital raising through new shares.

See also: Chancellor to unveil plans to merge local government pensions into ‘mega funds’

Dan Coatsworth, investment analyst at AJ Bell, said a perk of the market could be allowing private companies to get used to the feeling of some of the business being owned by others, which can often be a hurdle in listing publicly.

“It might act as a stepping stone towards a public stock listing, getting them used to regular financial reporting, transparency as a business, and understanding that a company is run for the best interests of shareholders, not the board of directors,” Coatsworth said.

“It could also encourage their staff to develop a saving and investing habit. One of the biggest stumbling blocks for private company share ownership is that staff are often put off by the general inability to sell those shares at regular intervals. A lot of private companies won’t offer the ability for staff to trade shares, meaning some people are stuck owning the equity until the business either lists on a public market or there is an internal event where they can sell down.”

In the past, private markets have been known to be relatively illiquid, with investors making a five to seven year commitment of their funds in order to be able to access the market. While this will be a slightly different system to the trading windows offered with Pisces, some have still raised questions on how liquid a private company can be in reality.

See also: As dust settles from Autumn Budget, how will UK markets fare?

Phil Jenkins, CEO of international corporate finance firm Centrus, said: “In theory, this is an interesting and exciting concept – liquidity for private companies is often a major challenge given the costs and obligations associated with a main market listing. As a growing business, we would certainly be interested in accessing long term and patient capital to support our growth ambitions.

“However, questions remain regarding Pisces’s liquidity source. Existing UK listed markets already struggle to attract domestic and international investors. It’s unclear why these same investors would suddenly gravitate towards less-tradable private firm stakes.  Without liquidity, will Pisces truly empower smaller firms to scale towards a size suitable for a traditional IPO?”

Coatsworth added that while Pisces could improve liquidity in theory, the trading windows would give companies control over when changes in shares happened, as opposed to always being able to trade during market hours on public markets.

“Disclosure requirements will be different to public markets in that investors taking parting in a Pisces trading event should be told about company-specific information, but details won’t have to be made public. That’s different to previous proposals under the former Conservative government,” Coatsworth said.

While Pisces offers an alternative to institutional investors to public markets, many investors are seeing the regulation not as competition for public markets, but as a stepping stone.

Karen Northey, director of corporate affairs at the Investment Association, said: “We want to ensure the UK remains an attractive place for companies to list, invest and do business. This requires a rebalancing of attitude towards risk. Proposals to broaden access to private markets through Pisces and plans to make the UK a leading centre for green finance indicate a positive shift towards a growth-focused mindset.”

In September, the Treasury and FCA made trusts exempt from Priips and Mifid II, which had previously caused a misrepresentation of investment trust fees.

Under the PRIIPs framework, investment trusts were required to disclose costs in the same way as open-ended funds. However, because investment trusts have both a NAV and a share price as a listed company, this caused a ‘double-counting‘ of fees, as they are already reflected in the company’s share price.

New rules are expected to be revealed in the first half of next year. However, the absence of a formal framework in the interim has led to disagreement between trusts and retail platforms over how fees should be declared.

See also: Are platforms hampering the investment trust cost disclosure victory?

Some investment trusts have published their Key Investor Document (KID) reduction in yield (RIY) figure as 0%, however some platforms are concerned that reporting zero charges figures is not in line with UK Consumer Duty regulation.

The survey found that 65% of investors find the ‘Statement of Expenses’ document, which some trusts have begun to adopt in place of the KID ROY, easy to understand.

Pascal Dowling, partner and head of funds marketing at Kepler Partners, said: “The debate over the right way to explain costs continues to be a major concern amongst our audience. More than 300,000 people have visited our site so far this year, and it is clear from our survey – which represents a sample of that audience – that there is dissatisfaction about the lack of clarity with which costs are presented, and in particular with the lack of comparability between open and closed-ended funds.

“This lack of clarity has consequences. Almost half of investors surveyed had previously chosen not to make an investment based on fees disclosed in the previous regime, so it is clear that ongoing reforms can unblock barriers to investment, if done properly. However, current divergence in the interpretation of the rules by boards and platforms is causing confusion for investors and requires swift, decisive resolution.”

The survey of over 300 retail investors found that 43% had decided not to make an investment based on the fees disclosed under the previous cost disclosure regime.

Meanwhile, 25% plan to allocate more to investment trusts following the change in disclosure rules. While the majority remain unchanged, just 2% said they were planning to allocate less in light of the new rules.

In July, the regulator finalised rules allowing institutional investors greater flexibility in how they pay for investment research.

The rules allow the ‘bundling’ of payments for investment research, aimed at improving competition in the space and aligning rules with other markets.

See also: FCA plans to overhaul how asset managers pay for investment research

The FCA said that following industry feedback, it wants to extend the rules to alternative investment funds and UCITS funds. The FCA has asked for further industry feedback on widening the scope of the rules. It would allow firms to pay for research and trade execution in a single transaction.

Jon Relleen, director of supervision, policy and competition at the FCA, said: “We want UK markets to be efficient and to support economic growth. Putting more information in the hands of investors and giving investment firms greater access to research to inform their strategies will bolster UK markets.

“We want to seize opportunities to enhance and streamline our rules and support the competitiveness of sectors in which the UK is already a recognised world leader.”

Meanwhile, the FCA also announced plans to ensure investors have access to “better, quicker and clearer” bond and derivatives data at a fair price.

Under the new rules, compliance costs for trading venues and investment firms would be lowered by simplifying the regime, while investors would be allowed access to higher quality post-trade data, and greater transparency in the timeliness of information published to market.

See also: FCA issues warning notice to Crispin Odey

At SRI Services’ recent Good Money Week conference, fund group representatives shared the “back and forth” experience of applying for fund labels under SDR, describing how it has been extremely challenging to come up with the right disclosures – while at the same time not needing to change funds’ philosophies and processes.

See also: EFG Asset Management launches global impact credit fund

Panellist Therese Niklasson, global head of sustainable investment at Newton Investment Management, said it had been “tricky” going “back and forth with the regulator”, with difficulties seeing the goalposts the FCA had set out.

This latest guidance appears to be a response to such criticisms, with the FCA stating that SDR and investment labels are “a new regime without precedent, and so, naturally, market practice is still evolving”.

For both the ‘Sustainability Improvers’ and ‘Sustainability Focus‘ labels, the FCA included three separate examples of good practice in terms of stating the fund objective, the link between objective and outcomes, investment criteria, and policies and procedures to monitor performance.

The examples they give “are based on our [the FCA’s] experience of applications to date and are non-exhaustive but are intended to aid applicants as they prepare their documentation”. Additionally, the publication notes that many of the observations are relevant across all labels, not just the two it highlights.

See also: FCA issues warning notice to Crispin Odey

The FCA also included examples of poor disclosure practices that do not meet the SDR requirements, such as disclosing an asset selection process that does not link to the specified sustainability objective and aim of the product; no explanation and evidence as to why the scoring or threshold is appropriate for defining sustainability; and failure to disclose a manager override for asset selection where it exists.

Additionally, specifically for the ‘Sustainability Improvers’ label, this includes failure to disclose the types of evidence the manager relies upon to satisfy itself that assets have the potential to meet the robust, evidence-based standard; and short-term and medium-term targets missing or inconsistent with the long-term horizon over which the assets are expected to meet the standard of sustainability.

Reacting to the release, UKSIF’s CEO, James Alexander, said this should prove useful to firms creating these products: “We welcome the FCA’s publication of examples of good practice as firms seek to secure approval to use sustainable investment labels. UKSIF has consistently called for further guidance and clear examples of best-practice on certain aspects of the Sustainable Disclosure Requirements, including the labels, and we are pleased to see this confirmed by FCA.

“We hope to see the regulator build on this over time, including providing more detail on where firms may be falling short in their fund disclosures. We remain confident that in time the SDR can give retail investors greater confidence in their investment decisions on sustainability, while helping reinforce the UK’s position as a global leader in green and sustainable finance.”

See also: Generation next with Mirabaud AM’s John Kisenyi: Power play

Overstory Finance’s company director, Rebecca Kowalski, also welcomed “any practical guidance that can help with the speed and efficacy with which SDR and the labels can become a force for positive change”. 

“We have waited so long, and there have been many twists and turns. But it concerns me that regulation can cause people to wait until we have the consultation, or the final policy, or the interpretation, and then let that bed in. There really isn’t any time to wait.”

This article was first seen in our sister publication, PA Future

The regulator published the notice on its website on 1 November, showing it had issued Odey with a warning of potential action against him for a breach of conduct rules on 18 September.

The warning relates to Odey’s use of his majority shareholding to dismiss the Odey Asset Management executive committee on 24 December 2021, weeks before he was due to attend a disciplinary hearing into his conduct.

See also: FCA reveals scope of investigations into Crispin Odey and Odey AM

The hearing was then indefinitely postponed as Odey – being the sole member of the committee – said he was unable to conduct it with impartiality.

A new executive committee was then appointed on 12 January 2022, with Odey stepping down. The new board was then dismissed at the end of March.

The disciplinary hearing was held in November 2022 following further executive committee appointments.

The FCA alleges that Odey’s actions demonstrated a “lack of integrity”, saying they were “deliberately designed” to frustrate the disciplinary process.

Odey was acquitted of indecent assault in March 2021 after he was accused of having groped a young female banker at his home in 1998.

The Financial Times released a report in June last year detailing allegations of sexual assault or harassment made by 13 women against Odey over a period of 25 years. Odey denies the allegations.

Odey Asset Management is currently in the process of winding up.

The consultation was launched in July, with the regulator seeking feedback on how it can simplify retail conduct rules and guidance.

In July, the regulator said it was particularly looking to address potential areas of “complexity, duplication, confusion, or over-prescription”, which create regulatory costs with “limited or no consumer benefit”.

Ahead of the deadline for input, Dom House, lead consultant at Simplify Consulting, says the review is welcome following the introduction of the Consumer Duty.

“It is important that the financial services regulations stay up to date and focus on the overriding objectives to protect consumers and promote competition.

 “We believe the review should consider how the FCA ensures that the principle-based regulation of Consumer Duty balances against more directive regulations that exist in handbooks such as COBS and CASS.

“In particular where there is overlap between differing rules, the FCA should look to simplify and consolidate based on their objectives. This may also be the case for the rules on Vulnerable Customers, which we know is a focus for the FCA.”

See also: City Hive relaunches mentoring programme with EnCircle

Steven Cameron, pensions director at Aegon, also welcomed the call for input, saying the firm sees scope to simplify rules around product disclosure and illustrations.

“Consumers could also benefit if the FCA rules made it easier to move from paper-based to digital communications,” he says, “which can be more engaging and allow firms to track actions taken by consumers to deliver better outcomes.

“Ironically, the consultation around the Value for Money Framework for workplace pensions which closed earlier this month includes particularly prescriptive rules which we hope will be simplified before going live.

He adds that, overall, the Call for Input may be a little premature to reach firm conclusions.

“While we know the Labour Government was keen for the FCA to consult, certain aspects of the Consumer Duty only came into force in July and it may take more time to fully assess scope for simplification within an evolving regulatory approach.”

See also: Mirabaud AM names CEO as part of wider group leadership changes

David Odgen, head of compliance at Sparrows Capital, says the frequency of regulatory change can be “dizzying”.

“It is very demanding to review consultation papers and subsequent policy statements and guidance and assess the impact on internal practices. Just in terms of time spent it is expensive and distracting but actually changing systems to cope is expensive in every sense.  Particularly for smaller firms it is extremely difficult to carry out any sort of accurate cost benefit analysis. Unless there is very clear evidence that a change will be of clear and measurable value to end clients then there should be great hesitancy to implement said change.

“While acknowledging that there will be very little appetite for regulation that is prescriptive as that tends to mean, inevitably, a one-size fits all approach there is room for more guidance in my opinion.  An example recently heard from the FCA was in respect of firms that provide intermediated services to retail clients with whom they have no direct business relationship. We all understand that the services should be appropriate for that ultimate target market but I see little clarity as to expectations regarding any particular steps to be taken or how good real client outcomes can be evidence. A lot of firms in many sectors of the industry are in that position.”

He added that all firms should be focused on client outcomes, which is “what really matters as confirmed by the Consumer Duty”.

“With that front and centre there is a need to look at all rules and really understand why they need to be there for the benefit of the client and what would go awry if they were not.,” Ogden explains. “I don’t think it was ever the intention that clients would get enormous volumes of paper which we must acknowledge is probably not read in its entirety by a very high percentage of individuals. 

It is very difficult for firms providing required information to assess what is necessary or useful and what is not but there is always a risk that if genuinely useful and important material is part of a very large pack of which some is less useful there must be a heightened risk that the key details are not full appreciated and understood.”

In her speech, Reeves labelled domicile status as an “outdated concept”.

Instead, the chancellor said she will introduce a ‘simpler’ residence-based scheme with considerations for workers coming to the UK on a temporary basis.

According to the Office for Budget Responsibility, the measures will raise £12.7bn over the next five years.

Brendan Harper, head of HNW technical services at Utmost International, said: the changes confirmed by the chancellor brings “months of uncertainty” for UK resident non-domiciled individuals to an end.

“With the scrapping of the regime, if non-domiciled individuals decide they want to live in the UK past four years they will need a long-term solution and alternative strategies to manage and protect their wealth effectively. For many, they may need to think beyond establishing trusts in order to shelter offshore income and gains for the long-term and to protect their estates from inheritance tax.

“We suspect that after this announcement we will continue to hear clients talk about making plans to move to other jurisdictions such as Portugal, the UAE and Monaco where we have seen the highest levels of interest this year.

“High-net-worth individuals and their intermediaries now have certainty to take stock of the reforms and begin adjusting their financial plans accordingly.”

Responding to the announcement, Craig Ritchie, partner at GSB Wealth, said: “The abolition of the non-domicile scheme and move to a residency based scheme presents huge opportunities for UK expats, who intend to remain outside of the UK to pass on wealth free of UK IHT.

“For those transitioning back to the UK, there is an opportunity to take advantage of the generous four-year foreign income and gains (FIG) regime.”

See also: Autumn Budget 2024: Capital gains tax hiked to 24%