Property News · September 16, 2016

USD3.9 trillion in global wealth to be transferred in next 10 years


But things could get complicated, especially in APAC
nevodka/Shutterstock
More than 14,000 ultra-high-net-worth individuals (UHNWIs) will be passing down their wealth in the next 10 years, data from Wealth-X and NFP’s “Preparing for Tomorrow: A Report on Family Wealth Transfer” showed. This means that USD3.9 trillion or 13 percent of all UHNWI assets will change hands worldwide—enough money to buy the 10 largest companies today.
While UHNWIs who are set to transfer their wealth have average holdings of USD16 million in real estate and other luxury assets, such riches may not be transferred easily, said David Barks, associate director of custom research at Wealth-X. “Much like private businesses, the complexity of transferring property to the next generation comes from the illiquidity and indivisibility of this asset class, as well as the associated potential tax liabilities.”
Local and foreign policies can also hamper the transfer of property acquired in other countries. In addition, owners tend to place sentimental value on property, making a sale or transfer especially difficult.
More: Revealed: Asia is the world’s fastest-growing region for billionaires
This could spell potential complications for UHNWIs in Asia-Pacific, who have the highest proportion of their wealth in property. This demographic is estimated to have kept 12 percent of their net worth in real estate and other luxury assets, compared with 5 percent for UHNWIs in other regions.
Wealth-X noted that private holdings still make up the largest proportion of the portfolios of UHNWIs set to transfer their wealth. Private holdings account for 36 percent of their net worth or an average of almost USD100 million per person.
Sixty-six percent of UHNWIs mulling a transfer of their assets are self-made, meaning it will mark the first time this wealth is being passed down to the next generation. “As primary businesses make up a very large proportion of these individuals wealth, the ownership and control of significant businesses across the world and especially in North America may look very different in the next 10 years,” Barks said.
Read next: Meet the world’s richest tycoons in real estate

Source : property-report.com
Read more…USD3.9 trillion in global wealth to be transferred in next 10 years

You may also like...