London (Firms): A Private Wealth Law (Foreign Expertise) Overview
The current global volatility has accelerated important discussions about where structures are controlled and where international families hold their family businesses, their personal assets and the impact on their philanthropy.
For many international families, US immigration status has not historically been treated as a core private client issue unless there was an immediate mobility problem. If a client needed to enter the United States, remain there or regularise the position of a family member, it moved up the agenda. Otherwise, it often sat slightly to one side, with tax, succession, trusts and governance treated as the main planning questions. That division is becoming less clear, where a family member’s US status may affect the wider tax and succession position.
The reason is not simply that US immigration law has become more contentious. Uncertainty around US status may directly impact private wealth planning. A family may have a green card holder living outside the United States, a trust or foundation created for US family members, or business succession planning and governance built on the assumption that a particular individual will remain a US person or continue to reside in the United States. If that assumption starts to wobble, the issue is no longer just immigration. It can quickly become a question of expatriation, domicile, transfer tax exposure and whether the planning still works as intended.
That matters particularly in a US context because the United States taxes its citizens and residents (including green card holders) on worldwide income and gains, and its citizens and domiciliaries on worldwide gifts and bequests. Status has therefore always mattered. The point now is narrower, but important: if there is less certainty about whether a client can keep a green card, preserve the right to reside in the United States or maintain a particular US connection, the consequences may not stop at the border.
Three recent Supreme Court decisions are relevant here. In Mullin v Doe, the court rejected claims by Syrian and Haitian nationals seeking humanitarian relief, holding that the statutory regime governing temporary protected status did not permit judicial review of the Department of Homeland Security’s revocation of that status. In Blanche v Lau, the court held that border officials do not need clear and convincing evidence that a lawful permanent resident has committed a disqualifying crime before treating that person as inadmissible. In Trump v Barbara, the court affirmed the constitutional guarantee of birthright citizenship under the Fourteenth Amendment. However, birthright citizenship remains a subject of debate.
These are not private client cases per se, and they do not involve the sort of facts one sees normally in a London private wealth practice. Even so, they should not be dismissed as irrelevant to private clients. Taken together, they suggest a harder-edged environment in which status may be less secure, and the enforcement of immigration rules less forgiving, than some internationally mobile families might assume. If the underlying US connection is less stable than everyone thought, the planning built around it may also need another look.
Green cards are the clearest example. It is not unusual to see a green card retained for years after a client has effectively moved elsewhere. Sometimes that is entirely deliberate. The client may want the option of returning to the United States, or may simply be reluctant to close off a route back to the United States. Sometimes, though, the card is still held because no one has forced the question.
That matters because if a green card is revoked, or if the holder is treated as having abandoned it, the consequences may extend well beyond the loss of the right to reside in the United States. Where the individual has held the card for more than eight of the previous 15 years, giving it up or losing it may trigger adverse tax consequences. For someone with a net worth in excess of USD2 million, that can mean an exit tax based on a deemed disposal of worldwide assets. A green card that was being kept “just in case” can start to look rather different when viewed through that lens.
The transfer tax position can also become uncomfortable very quickly. If an individual loses the right to reside in the United States, the ability to maintain a US domicile position may come under pressure. Status and domicile are not the same thing, but it would be a mistake to ignore the connection. If the client’s right to remain in the United States is in doubt, one cannot unequivocally assume that the domicile position remains untouched.
Domicile matters because the difference between being US-domiciled and not being US-domiciled is substantial. A US domiciliary is taxed on their worldwide gifts and bequests and has a federal gift and estate tax exemption in 2026 of USD15 million (less lifetime taxable gifts). A non-citizen who is not domiciled in the United States, by contrast, is only subject to US estate tax on their US situs assets but has only a USD60,000 estate tax exemption in respect of US situs assets and no equivalent US gift tax exemption. A status issue can therefore materially affect the transfer tax analysis.
Trust and succession planning are vulnerable for similar reasons. A structure created on the assumption that a family member would remain a US person or continue to live in the United States may still function if that assumption no longer holds, but it may no longer function as originally intended or remain efficient. Trusts created with US family members in mind may need revisiting. Family business succession, estate planning and governance may need another look. What began as a question about residence or immigration status can necessitate a broader review of planning for family businesses and family offices, as well as family members, because the assumptions underlying it have shifted.
If a family member’s right to remain in the United States is uncertain, or if a green card is being retained more out of habit than by design, it is no longer enough to assume that the tax and succession position will simply look after itself. Will the trust still work as intended? Does the family’s current estate planning still make sense? What is the cost of losing that US connection?
The US/UK Estate and Gift Tax Convention has also taken on more significance since the UK’s non-dom reforms. For some clients, the treaty remains an important source of protection. US citizens, and others treated as domiciled in the United States under the treaty, may continue to enjoy the US federal gift and estate tax exemption despite long-term residence in the United Kingdom. That matters more now than it did a few years ago. The contrast between the US exemption and the UK nil-rate band has always been there, but the UK changes have made families and advisers look much more closely at how much of the planning depends on preserving the US side of the picture.
That does not mean every family with US ties needs to tear up its planning and start again. It does mean that assumptions around status deserve more active scrutiny than they may have received in calmer periods. Some families will want to develop contingency plans or to evaluate the cost of a sudden, unplanned loss of a green card or U.S. residency. Is the green card still held for a reason, or simply because no one has wanted to confront the consequences of giving it up?
If a US connection weakens, what follows for trusts and foundations, family businesses and family offices? In some cases, families are considering whether future planning should place greater weight on structures resident outside the United States.