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FB roundup: Rothschild, billionaire census, & business transfer tax

Rothschild revenues fall, billionaire population up 15%, and UK tax system ‘favourable’ for family business transfers

Rothschild revenues fall

Rothschild & Co heir Alexandre de Rothschild contends with a revenue drop at the bank’s key advisory business, as he succeeds his father as executive chairman today.

Revenue from global advisory was down 20% year-on-year to €262 million ($309 million), according to the Rothschild’s Q1 results. The private wealth and asset management business grew 2% to $154 million, and the merchant banking arm’s revenue was up 29% to $29 million.

The drop in advisory business was partly attributed to a 14% quarter-on-quarter drop in global M&A activity (by value), and the fact that Q1 2017 was a record for the bank. Rothschild was ranked first globally in terms of the number of completed transactions during the first three months of 2018, according to Thomson Reuters data.

Alexandre (37), pictured, becomes the seventh generation of the family in charge of the bank in a long planned succession that sees his father David de Rothschild (75) become supervisory board chairman. The new posts would be confirmed at an AGM today.

Billionaire population up 15%

The number of female billionaires grew 18% last year, outpacing the 14% growth of males, and resulting in a total billionaire population of 2,754.

Wealth-X’s 2018 Billionaire Census showed upturn in the world economy and climbing equity markets contributed to a 15% increase in the number of billionaires this year. There was a marked shift towards public holdings, which accounted for 42% of portfolios, compared with 33% the year before. Private holdings dropped from 39% to 33%.

Just under 12% of billionaires are female, and they are vastly more likely to have inherited their wealth, 53% compared to the 8% of men who inherited. However the report noted this trend was beginning to reverse slightly, with more self-made women emerging over the last decade.

In Asia, the number of billionaires (784) overtook North America (727) for the first time. In Asia, billionaire wealth skyrocketed 49% to $2.4 trillion. Europe was home to the most billionaires, with 821.

Their combined wealth increased 24% to $9.2 trillion.

UK tax system ‘favourable’ for family business transfers

New research shows the UK as having one of the most favourable tax systems when it comes to transferring a family business from one generation to the next.

The KPMG Enterprise Global Family Business Tax Monitor looks at 65 jurisdictions and found Canada, Venezuela and Japan imposed among the highest taxes on family business transfers on death, while Canada, Venezuela, and Australia took the biggest cut on transfers during a business-owner’s lifetime. The ranking takes into account any relief which can be claimed.

The UK tax system relating to the transfer of a business through inheritance reflected “longstanding beliefs in the benefits of business passing generationally” the report said.

Reforms in the US had improved the tax relief available on family business transfers, with the lifetime exemption increasing to more than $11 million, allowing owners to transfer more assets tax-free on death or through lifetime gifts.

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