High wealth individuals engagement – information for tax agents
We are writing to certain taxpayers, through their agents, to establish they are high wealth individuals (HWIs) – that is, they have effective control of $30 million or more in net wealth.
The engagement letter is intended as a streamlined approach (compared to the Private group structure questionnaire) so we don’t expect in-depth research where it can be avoided. We just want you to tell us, according to the most recent information available, whether or not your client controls $30 million or more in net wealth.
When we receive your response we will update our records as required and note your client's wealth status on their file, so we can tailor our engagement with them and deliver the right services.
Calculating net wealth
It is acceptable to use estimates (rather than formal valuations) of private assets.
You can rely on existing records – it's not necessary to obtain new valuations.
Percentage interests in non-fixed trusts, blind trusts and similar entities can be established by reference to the most recent annual distribution statement.
Items such as offshore holdings and interests should be included.
We don't need to know the value of your client's estimated wealth, just whether or not it is $30 million or more. So if your client's net wealth exceeds $30 million from their own business affairs, there is no need to review any other potential wealth factors – for example, the affairs of their associates.
If you or your client don’t hold sufficient information about your client's ‘associates’ to include that in the calculation, this must be advised in the response.
If your client disputes some or all of the associations – for example, Mr HWI wants to send back a response of what is viewed as 'his' and wants to make no comment on Mrs HWI's – we will accept this.
If you are not the sole practitioner handling the affairs of the client (or their associates), it’s your client's responsibility to forward the letter to any other practitioner representing their affairs, then either:
As an agent you may receive a letter asking for confirmation that a client is a high wealth individual. If so, we ask that you distribute it to your client and ensure they or you respond by the due date.
- each agent can respond with information based on those entities they are the agent for
- the client can send back one response covering the multiple agents.