MASECO Private Wealth: Professional Adviser Awards 2021 Finalist

Written by Henry Findlater

When MASECO was created, our co-founders Josh Matthews and James Sellon, made a conscious choice: ‘Obsess over our clients and deliver the best for their needs.’  

High-net-worth US citizens living in the UK face several complex tax challenges when investing their assets and planning for their future. Finding the right advice and products can be challenging, so in 2008 MASECO was created to serve this specific client niche whose most prominent issue was the US and UK tax efficiency.   

Investing in the UK or offshore ETFs or funds will cause them to fall foul of the IRS’s Passive Foreign Investment Company (PFIC) rules, and gains will be taxed punitively. UK-based savings arrangements such as ISAs and SIPPs can also have unattractive US tax consequences. Equally, if they are UK tax residents, utilising US-based funds and ETFs can have onerous UK tax implications. They are caught between a rock and a hard place! It is essential to appreciate that Americans are taxed worldwide, irrespective of where income/gains arise. As such, they require specific expertise to remain tax-efficient if they live outside the US.    

At MASECO, we offer US and UK tax-efficient investments and wealth planning for US-connected individuals and entities. To invest, we use US mutual funds with UK reporting status. In 2008, MASECO approached several US mutual fund providers and requested they gain UK reporting status, so UK resident American investors were not disadvantaged due to tax. These funds satisfy IRS and HMRC requirements, resulting in dual tax-efficiency, with capital gains being charged at capital gains tax rates by the IRS and HMRC, rather than punitive income tax rates.  

If a UK-based US client contributes to a UK charity, they may only get tax relief in the UK, significantly reducing the donation’s tax-efficiency. We helped create a dual-qualified US-UK registered Donor Advised Fund, meaning a donation receives Gift Aid in the UK plus US and UK tax relief.  

While pensions are recognised in both the US and the UK, it is important to understand the complexities associated with a US-connected individual holding a UK pension. For US taxpayers living in the UK, there are US tax implications to be considered, which can mean UK pensions are not so efficient unless understood by an expert like MASECO. For example, if contributions are made personally, the US individual will likely need General Limitation Foreign Tax Credits on the US tax return to ensure the contribution is tax efficient. MASECO helps its clients make these judgements to ensure optimum tax efficiency when saving for retirement.  

We don’t do it alone.    

We work closely with a network of tax advisors to ensure a more coordinated approach between tax and wealth. This means our clients’ taxes are paid in a timely, efficient and accurate manner to both the IRS and HMRC. We make sure their tax is not only compliant but also that they take advantage of tax opportunities that may be available due to their domicile and/or residency. Alongside expert investment management and wealth planning, this type of relationship management is a critical component of our service to our clients and sets us apart from our peers.  

We are delighted to be a finalist of the Professional Adviser Awards 2021 as “Tax-Efficient Adviser Firm of the Year.” Our success is down to our team’s hard work. We want to thank everybody for their contribution to making us who we are today.