Private Banking Issue No. 69 September 2008

ESPECIALLY FOR LEUMI PRIVATE BANKING CLIENTS

We Wish You a Shana Tova Rosh Hashana 5769

Issue No. 69 September, 2008

Contents From the Editor

3

Moon, Calendars and a Town in Provence

4

Israel Macro Review

7

World Macro Review

8

Hedge Funds: Risk-Adjusted Return in a Diversified Portfolio

10

Trusts - Action Required by October 31, 2008

12

Going Further – Bank Leumi (UK) plc

14



LEUMI PRIVATE BANKING CENTERS IN ISRAEL PRIVATE BANKING FOR FOREIGN RESIDENTS TEL AVIV - 23 Floor Dizengoff Top Tower 55 Dizengoff Street Tel: 972-3-621-7444 17 Floor Dizengoff Top Tower 55 Dizengoff Street Tel: 972-3-621-7333

JERUSALEM - 19 King David St. Tel: 972-2-620-1800

PRIVATE BANKING FOR ISRAELI RESIDENTS TEL AVIV - The Millenium Building, 17 Ha’Arbaa St. Tel: 972-3-623-7300 HAIFA - Dan Panorama Hotel, 107 Ha’Nasi Ave. Tel: 972-4-835-0333 HERZLIYA - Business Park, 85 Medinat Hayehudim St. Tel: 972-9-960-9311 JERUSALEM - 19 King David St. Tel: 972-2-620-1887

Rosh Hashana 5769

From the Editor Dear Client, We are proud to present you with the 69th edition of the Investor’s Review. This magazine is published especially for clients of Leumi Private Banking and this special edition is to commemorate Rosh Hashana for the year 5769. The main feature in this edition is an article by Dr. Eitan Burstein, the Bank’s historian, dealing with the topic of the moon, calendars and a town in Provence. The article investigates the changing from year to year by dealing with the concept of time. Other features include an article delving into hedge funds and an article that explains the new regime for trusts and what actions need to be taken before 31 October 2008. In addition, the magazine includes the usual Israel and World Macro Reviews (this time taking an annual perspective rather that a monthly one) as well as Leumi’s recommendations. We hope that as with previous editions, this one will be of interest to you. You are invited to be a partner with us in this endeavor and send us your responses, questions and ideas for topics for future additions. We wish you and your family an enjoyable read and a happy and successful new year. Smadar Ilan Head Editor Head of the Products Marketing Department The Products Management & Financial Services Sector The International & Private Banking Division



Moon, Calendars and a Town in Provence Dr. Eitan Burstein, the Training and Personnel Development Center, Leumi



In the era of balance sheet publications and the transition from year to year, we will examine the most precious commodity – time - and clarify a number of time-related concepts. The fourth dimension evades all definition. Try to define time without repeating this word and you will understand the difficulty. The Latin word, which has permeated into almost all languages, is “tempus,” which forms the root for the English word “time,” the French “temps” and the Italian “tempo.” The Greek word is “chronos” (χρόνος), which forms the root of chronology. Has anyone ever pondered over the similarity between the aforementioned tempus and the English word “temple” – “templum” in Latin? Indeed, this similarity is not incidental. There is a strong affinity between the concepts, which could assist our understanding of the concept of time. In the ancient Indo-European language, there was a verb that was preserved in classical Greek – τεμνω, temno, which means to divide or to separate. In classical Greek, an object that cannot be divided is termed a-tom with the privative Greek alpha, (for example, apolitical or asexual). Dividing up a body or dissecting it into pieces is termed ana-tomy. The Roman temple or “templum,” therefore, specifies the area divided and separated from the material world around it. By the way, in classical Greek, the area designated for the work of the gods is termed with a similar word, timnus. The Roman word, “templum,” can be translated literally as “segregated” (from the material world). Time is, however, first of all a matter of the division or separation between day and night, between the Sabbath and weekdays between the new moon and

the seasons. The basic and primary unit in time is the 24-hour day, which specifies the interval between the solar and lunar risings, or for the romantics amongst us, between the sunset and the setting of the moon. Do you remember the star, which the Little Prince visited and left sadly because it featured twenty four sunsets in a twenty-four-hour period…? The Babylonians divided the day into twenty four divisions and called the new unit an hour. After dividing the day into hours, a reverse supplementary action – creating the week, month and year was performed. The week is the only time period lacking an astronomical base and its justification in Judaism is, of course, the duration of the Creation. Because of its atheistic nature, the French revolution canceled the week and in the revolutionary calendar created a new period (decade) of ten days (not to be confused with the commonly used “decade,” which refers to a period of 10 years). The week in general and day of rest in particular, is one of the unique contributions of Judaism to the human culture through Christianity, as in the pagan world, the concept of a day of rest is conspicuously absent. In this outlandish world, the masters did no work and the slaves toiled ceaselessly. By the way, in old Latin and classical Greek there is no term meaning week. On examining the Hebrew year, which is divided into 355 (in numerology the characters making up the Hebrew word for year “‫ ”שנה‬add up to 355) days, we discover that the months are based on the position of the moon, i.e., the month is the period between the new moons and at the middle of the month, there is always a full moon. The month

fundamentally signifies the renewal of the moon. If you were of the opinion that only Hebrew has the synonym moon – you are mistaken. The English term, month, is, in fact, derived from the word moon! Combining 12 months created the lunar year. By the way, the Latin word for year is annus, in French année, (which leads to arnona – an annual tax), which is almost identical to the Latin word anus, which is a ring. Both are circulatory. In the year (annus) as in the ring (anus), the first day of Tishrei, encounters the last of Elul and the first of January encounters the thirty-first of December. The most ancient of lunar calendars currently in use, is that of the Chinese. It was first introduced in 2,600 BCE. Firstly, because of its dependence on the lunar cycle, it, of course, varies from the Gregorian calendar (the year commences on February 7th). In this Chinese calendar, there is a cycle of 12 years in which each of the years bears the name of an animal. By the way, this year is the year of the rat. As a result of human development and the transition of man from the roaming and hunting period to settling and working the land, it became clear that the moon, with all its beauty, (especially at night) has no effect on human life. Thinking now deviated to the four seasons of the farmer, which are a function of the solar cycle. Chronology was restructured and was termed “the year of the sun.” Its length was determined as the time it takes the sun to circle the earth, i.e. 365.25 24-hour periods. The Greeks and Romans completely neglected the lunar basis and moved over to the annual system, in which the solar year comprises 365 days divided into 12 months of 31, 30 and 28 days, which have no

This Babylonian tablet, which was made 450 years before the Babylonian priests discovered “The secret of the Leap Year,” shows the rite of sun worship. The god of the sun sits on the sun temple on the right; above his head are symbols of the three planetary gods central to Babylonian belief: the moon, the sun and Venus. In the centre of the image, outside the temple, we find an altar with the sun on it held in place by two ropes held by two heavenly beings.

affinity whatsoever with the moon. In the solar year, the English term, month, lost its initial meaning. Now, what about the overlapping 0.25 days? The Roman Ruler, Julius Caesar, who adopted the calculation (hence, the Julian calendar) determined that once every four years a day would be added to February, which would forevermore number 29 days. Later, during the late Middle Ages, calculations proved that the year is a little short – 365.24 24hour periods, i.e. too many days had been added



A French town in Provence called Lunel named after the moon, located near Montpellier



since the Julian adjustment and that there was a new deviation that had to be corrected. In the Sixteenth century, Pope Gregorius XIII (after whom the Gregorian calendar is named) decided to erase the surplus days and in each fourth year February would have 29 days except in the years ending in two zeroes such as 1700 and 1800. The years that are divided by 400 without any remainder, such as 2000, would continue to number 366 days. Of course, neither the Julian nor the Gregorian adjustments applied to the Jewish calendar and the problem of adjusting the lunar month to the Jewish festivals, most of which are linked to the agricultural seasons (Spring, Vintage, Harvest etc.) of the solar calendar. For this purpose, our ancestors turned to the classical world, to be more accurate, to the 5th Century BCE Athenian astronomer, Meton. This Meton established a 19-year cycle named after him (the Metonic Cycle) in which 7 years were leap years, i.e. they had 13 months. In total, this cycle contained 235 lunar months. Thus it was determined that in a given cycle, the third, seventh, eighth, eleventh, fourteenth, seventeenth and nineteenth years would be leap years and an additional month (Adar 2) would be added to them. Thus every nineteen years created an adaptation between the lunar and solar years. I.e., if 30.9.2008 corresponds with 1 Tishrei 5769, this overlap will be repeated within nineteen years. This correction also didn’t result in perfection and in order to adapt the lunar month to the solar year, an additional calculation was made in Judaism, with the aim of determining the variable lengths of the month. The final determination of the date of the beginning of the month was given to the Sanhedrin in Jerusalem, someone qualified by it or a unique personage in Israel (Brachoth 63:1), i.e. the greatest person in Torah knowledge and wisdom. Actually, during the period of exile, the

of bol sym Lunel T he ge of villa

the

business of determining the date of the beginning of the month became one of the most important issues. As a result of the structure of the Hebrew calendar, the Hebrew year can only begin on one of four days of the week, which leads to the expression “not on Sunday, Wednesday and Friday.” I.e. the Hebrew year cannot begin on a Sunday, Wednesday or Friday. It should be noted that a major part of this calculation was made in the Middle Ages in a godforsaken French village in Provence, which up to the present is known by a name that can be translated into lunar! We refer to Lunel, which is located close to Montpellier. The moon is also the village’s current emblem. In order to explain the name of the place, there is a local legend according to which, it was established by Jews, who had escaped after the destruction of the Second Temple from… Jericho. (The Hebrew spelling of Jericho contains characters that form the Hebrew word for moon). The importance of Lunel as a Jewish center can be learned from the fact that in French Jewish sources, it is called Little Jerusalem and its emblem also features two lions. During the Middle Ages up to the expulsion of the French Jews in the Fourteenth Century, this village was the center for the “Ba’ale Tosafot” or Talmud interpreters. One of the prominent sages, who was occupied with the calculations of the Jewish moon, alongside which the Gregorian adjustment is feebleminded child’s play, was called Shmuel YarhInai (namely Shmuel the lunar has intonations about the moon) and a street in Tel Aviv-Jaffa is named after him. His relatives Avraham and Nathan each called HaYarechi (a name that also intonates the moon) also dealt with this topic. Their efforts converted the Hebrew calendar into the most accurate from amongst all the calendars currently in use in the various cultures.

Israel Macro Review Eyal Raz, Head of the Financial Department, Leumi

Just how much will the Israeli economy be affected by the US economic slowdown? Over the past year the global economy has experienced turbulent times. Specifically, the economic and financial crisis that erupted in the US and spilled over to the UK and Euro zone countries. This crisis has taken form in several manners including a marked slowdown in economic growth rates and pessimistic economic forecasts for coming years. The International Monetary Fund‘s global economic update from July 2008, assessed that economic growth in the advanced economies has declined from 3% in 2006 to 1.7% in 2007 and that the slowdown will deepen further with the GDP growth rate falling to 1.4% in 2009. The economic slowdown in the US and the Euro zone is expected to be even sharper, with the US GDP growth rate falling from 2.9% in 2006 to 0.8% in 2009, while growth in Euro zone is expected to fall from 2.8% in 2006 to 1.2% in 2008. Unlike these weak growth figures for the advanced economies, in the first half of 2008 Israel‘s economy grew by an annualized rate of 5.3%, compared to the second half of 2007 (and by 5.6% compared to the same period last year), while the business sector product expanded by an annualized rate of 6.3%. During this period growth was driven by a rapid increase in the export of goods and services (10.7% annualized), while there was a notable slowdown in the rate of increase of private consumption and investment in fixed assets, following especially high

growth rates in these components in the preceding period. An analysis of economic trends in the US shows the economic slowdown there is notable in the area of residential construction, private consumption and the financial sector. Except for diamonds and jewelry, Israeli export to the US does not include a significant amount of consumer goods and/or construction inputs. Thus, it appears as though the direct exposure of Israel‘s economy to the sectors driving the economic slowdown in the US is likely to be minor compared to the case in previous US economic crises, such as the crash of the US hightech markets at the beginning of the decade. Overall, there are indeed some signs of a slowdown in the rate of increase of economic activity in Israel. However, for now the economy appears to be heading for a “soft landing.” This is in contrast to the situation at the beginning of the decade when the background conditions of the economy were less positive compared to what they are today, and the negative influencing factors (the security situation and its consequences, the state of the global high-tech sector, etc.) were much more severe and focused in the Israeli economy. Against this backdrop, Leumi has revised its Israel GDP 2008 growth forecast upwards, to 5%. Regarding 2009, we currently forecast a GDP growth rate of 2.7% (1% per capita).



World Macro Review Liora Caplan, Investment Counseling Department, Leumi

Looking back, there is no doubt that the past year has been an extremely difficult one, especially in light of the good years that preceded it. Global growth turned direction, some will say into global collapse. Obviously, there were those who predicted a credit crisis but few foresaw the extreme effect it would have on economies worldwide. As a result, the US is in a state of severe slowdown, Europe is in the midst of a recession and Japan is on the verge of one. Two major factors contributed to soften the blow that the US economy absorbed. The first were US exports, supported by global demand and a weak dollar. A growth in exports and a contraction in the trade deficit were the main generators of growth lately. The second contributor was the tax rebate plan, which pumped over 100 billion dollars to US citizens who used them to shop, finance growing costs of petrol and food and/or pay back debt. It appears that these 2 factors helped prevent bigger job

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losses and a quicker deterioration in economic reality. But this is not expected to continue much longer. The USD has already registered quite a comeback and tax rebates have been distributed to the full. Furthermore, a global slowdown is already hurting demand for US exports. What lies ahead? On the one hand, the pessimists see further deterioration on all difficult fronts. They see the real estate sector continuing its fall, a fact that will further impinge on the global financial sector. They expect growth in exports to reverse and US domestic demand to slow, bringing further layoffs and higher unemployment. Some also expect commodity prices to start rising again (due to shortages, geopolitical instability, etc.) a fact which will no doubt weigh on the economy. On the other hand, optimists see the end of the real estate freefall, a fact which will have a very positive effect on financial institutions worldwide. They see the trade deficit continuing to

contract, commodity prices to decline, sentiment to strengthen and domestic demand to grow. We believe that reality will lie somewhere in between. We believe that a turning point in the real estate sector is not too far away (although return to "normality" is). We reckon commodity prices are still on their way down, and expect this to support sentiment and domestic demand. Nevertheless, a European recession means that demand for US exports will contract and the improvement in the trade gap will moderate. The tax rebate plan was designed to be a bridge over the white waters of the credit crisis, to support domestic demand through the eye of the storm. We think that there is a fair chance that this goal has been achieved and that the US will not fall into a deep recession. Q4 2008 is critical because only then will we know whether or not this bridge was long and sturdy enough to do the job. Obviously – it is a delicate balance, and nuances can push the tip either way. In

any event, and even though our outlook is optimistic in its nature, we expect the recovery to be slow. This opinion lies on a few assumptions, including interest rate hikes in the US and interest rate cuts in the Euro Zone, both to materialize only in the beginning of 2009. Global Trading Trends Price levels today represent somber expectations for the future, or a discount on true values of companies. As of today, we believe that the US market has more upside potential than Europe, especially considering the hawkish ECB stance and its crippling effect on the local market. As for emerging markets, there is a preference to those which are not commodities oriented (India and Chinese stocks traded in Hong Kong). The great volatility, which we learned to live with in the past year, is expected to continue to plague the markets for a while still.



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T A2 5

1300

Hedge Funds: Risk-Adjusted Return in a Diversified Portfolio Jérôme Van Loo, CEFA, Bank Leumi (Luxembourg) S.A.

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The purpose of this article is to present Luxembourg as a leading financial center in the world especially in the funds industry, including hedge funds. Alternative investments provide attractive risk-adjusted return potential to traditional asset classes. Such returngenerating strategies attract capital in insecure and very volatile markets and succeeded in obtaining double digit growth last year. Even if there are signs of stabilization in the hardhit housing sector, the subprime and credit crises are not over yet and their consequences will continue to be felt quite strongly. Even if fundamentals are sound, GDP growth figures for mid-2008 seem to be substantially weaker. Downside risk to the economy prevails and risks to price stability over the medium term remain on the upside with higher food and energy prices being major contributors to consumer prices. In a risk-to-growth stagflation and recession environment, it is worth having a global conservative approach, looking for instruments that can generate a positive return regardless of whether asset prices are going up or down. One way of doing it, and in the meantime diversifying a portfolio, can be through hedge funds which have merits as a diversification tool and investment instrument. The first hedge fund was set up in the 1940's by a US-based investment manager (A.W.Jones) but only became popular in the 1990's and especially in the equity bear market in 2000 when investors started to realize hedge funds can offer a strong risk-adjusted return. The main difference with traditional funds is that hedge funds seek positive returns in all market environments while traditional funds will focus on beating a benchmark (even if declining). Indeed one of the main characteristics of hedge funds is the pursuit of “absolute return” and the low correlation to traditional markets hedging against market

volatility. The ability to use leverage, derivatives and short selling give hedge fund managers possibilities to generate gains and growth in falling, rising and highly volatile markets. Hedge fund strategies present a high degree of heterogeneity in terms of assets traded and investment philosophy. For a better understanding we can classify and describe them simply as below: • Convertibles Arbitrage: a typical arbitrage strategy on a product of that kind involves taking a long position on a company’s convertible bond position and a short position on the stock of the same company. The advantage therefore is the income from the bond and the sale of the stock while protecting himself from movements in the market. • Fixed Income Strategy: this strategy involves taking advantage of pricing anomalies between two or more sectors in the fixed income markets. The classic strategy is taking a long position in the undervalued sector or asset, and simultaneously a short position in the overvalued sector or asset. • Equity Market Neutral: the idea is to try to benefit from anomalies in the valuations of stocks, while neutralizing their exposure to the market risk, for example holding a long position on a stock considered to be undervalued and short position in a stock overvalued while conserving a dollar-neutral position (with respect to the currency) and/or betaneutral position (with respect to the market). • Merger Arbitrage: when an acquiring company wishes to gain control over a “target” company it must obtain the support of the majority of shareholders in the “target” offering them a premium relative to the stock market price as encouragement. Since the acquiring company proposes a higher price the market is rarely indifferent to the announcement creating a demand and sudden increase of the stock

price. • Distressed Securities: when a company is placed in receivership, we observe a sharp fall in the price of its shares resulting from the loss of confidence on the part of the shareholders. The shares of certain companies may be unjustly sacrificed by investors. Distressed Securities funds can either decide to play an active role in the company’s turnaround or adopt a passive strategy by buying the stocks of the undervalued securities and waiting for a recovery before selling them. • Global Macro: the objective is to take advantage of major macroeconomic trends while intervening in some or all types of markets (stocks, bonds, interest rates, derivatives and raw materials) following a top/ down process. • Emerging Markets: these funds take positions in all kind of securities quoted in emerging countries (mainly Latin America, Eastern Europe, Africa and Asia). • Long/Short Equity: it involves buying stocks that are expected to appreciate and selling stocks expected to depreciate. • CTA/Managed Futures: Commodity Trading Advisors invested historically in commodity markets via futures. They take advantage of a large leverage effect. The estimated assets of hedge funds globally amount to approx. $3 trillion according to a new report conducted by HedgeFund.net. Large funds appear to have attracted enough capital to grow the hedge fund industry at an organic growth rate (total assets excluding performance) of 11.06% last year. Hedge funds located in Europe saw the largest rate of growth with new allocations of $21.5 billion (increased by 2.62%) while funds operating in Asia fell about $3 billion.

Despite the ongoing global financial crisis, the Luxembourg financial sector continues to be an attractive place for doing business given the niche and sophisticated nature of our service industry, especially in the mutual funds industry. Fortunately, Luxembourg financial institutions have experienced fewer problems than some other banks elsewhere. More and more customers are coming from outside Europe (currently about 21% of the customer deposits). Being so small, Luxembourg has to aim its financial services at the international community to the extent that the analysis of opportunities is part of the law-making process. The aforementioned, coupled with its multicultural working process, knowhow, and reputation as one of the leading financial center in the world, makes Luxembourg ideal for investors all over the world. We are able to provide clients with a truly global working relationship, serving clients who have cross-border activities with cross-border solutions and offering a platform to win new clients looking for discretion and confidentiality through a reliable structure. In conclusion, hedge funds present a diversified and attractive investment opportunity for private investors but involve investor awareness in several aspects. Such alternative investments are complex instruments and can be risky as the funds are hard to control, they outsource many functions like accountants, administrators or give themselves many discretions in valuing assets, they are located in offshore jurisdictions and are less liquid compared to traditional instruments. We can remain confident about the future of the banking sector in Luxembourg with its progressive legislation, attractive tax framework, innovative atmosphere and its stable and strong laws and regulations protecting the investor.

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Trusts - Action Required by October 31, 2008 Leon Harris, CPA, Ernst & Young

Recently, there have been numerous developments affecting trusts and foundations for Israeli tax purposes.

New Trust Regime 2006

Before 2006, irrevocable trusts* were considered exempt on non-Israeli source income. A new tax regime targets Israeli and foreign trusts and foundations, commencing January 1, 2006. However, its implementation is postponed until October 31, 2008. Four main types of trust are specified in the new regime: 1. Israeli Residents’ Trust – generally subject to Israeli tax on all its income if the settlor is an Israeli resident; 2. Foreign Resident Settlor Trust – potentially exempt from Israeli tax on foreign source income (Note: settlor = grantor); 3. Foreign Resident Beneficiary Trust - potentially exempt from Israeli tax on foreign source income if all the beneficiaries are non-Israeli residents; 4. Testamentary Trust – regarded as Israeli resident and subject to Israeli tax on all its income if the deceased settlor and any of the beneficiaries are Israeli residents. Trustees in Israel and abroad are generally “assessable and chargeable to tax” on trust income. In 2008, extra measures were introduced with retroactive effect from 2006, as outlined below.

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Amnesty for pre-2006 trusts

The Israeli Tax Authority claims that the irrevocability

of some pre-2006 trusts may sometimes be doubtful. Under an amnesty, the trustees of irrevocable “Qualifying Trusts” may settle their pre-2006 tax liability by paying tax at a flat – generally at a rate of 4% - 10% of the value of trust assets. The Israeli cost basis of such assets is then “stepped up” to the above value for future Israeli tax purposes. Amnesty applications must be submitted to the Israeli Tax Authority by October 31, 2008. Non Israeli resident beneficiaries

Limited relief is available for beneficiaries living outside Israel, if an irrevocable trust has an Israeli resident settlor, as follows: • Upon a distribution: the trustees may claim an exemption for non-Israeli income distributed to nonIsraeli resident beneficiaries. Tax paid in the previous 4 years may be recovered. Opting the first time has an entry price - tax at rates of up to 47% on all unrealized capital gains of the trust. • Upfront allocation: the trustees may avoid Israeli tax on non-Israeli source income by allocating non-Israeli assets and income upfront to designated non-Israeli resident beneficiaries. The upfront allocation has an entry price - tax on unrealized capital gains on the allocated assets at rates of up to 47%. Furthermore, every 4 years, the trustees must check that the nonIsraeli beneficiaries actually received income allocated to them – any shortfall is taxed at 70%!! Reporting

Reporting measures include the following: • Notices may be submitted to the Israeli tax authority

*Irrevocable Trusts – a trust in which the trustees are unable to influence and/or control and/or change the trust arrangement, including everything relating to its asset distribution.

instead of full tax returns, in certain instances. • A non-Israeli trustee may pass the “assessable and chargeable to tax” obligation to an Israeli resident settlor in the case of an Israeli Residents’ Trust or a beneficiary in the case of an Israeli resident Testamentary Trust. Reporting deadlines

Where applicable, annual tax returns must be filed by April 30 (subject to any extension) by the trustee – or by the settlor or beneficiary if they agree to be “assessable and chargeable.” With regard to the years 2006 and 2007, the deadline for submitting notices, declarations and annual tax returns relating to trusts is postponed to October 31, 2008. Non-Compliance

The question of whether the State of Israel can compel foreign residents to comply with the new trust tax regime raises complex issues. Nevertheless, Israeli tax law contains sanctions in the case of non-compliance, including the collection of tax from a settlor or from a beneficiary – in the latter case, up to the amount distributed to the beneficiary. Conclusion and action plan

By October 31, 2008, trustees, professionals and other interested parties should take appropriate action including a review of the following: • Which type of trust exists under pre-1.1.06 Israeli tax law • Which type of trust exists under post 1.1.06 Israeli

tax law • Tax treaty relief availability, if any • Whether the 4%-10% amnesty is worthwhile • Whether the trustee can/should transfer post 1.1.06 “assessable and chargeable to tax” responsibility to the settlor or a beneficiary. • Should an exemption be elected for distributions or allocations to non-Israeli resident beneficiaries? • Interaction with foreign taxes Many alternatives may be worth considering. Detailed optimization calculations will often be needed. As always, consult experienced tax advisors in each country at an early stage in specific cases. For more information please contact: [email protected] The writer is an International Tax Partner at Ernst & Young Israel and an external advisor to Leumi Private Banking.

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Leumi Private Banking *Bank Leumi (UK) plc is authorised and regulated by the Financial Services Authority Leumi Private Banking Bank Leumi (UK) plc 020 7907 8008 [email protected] www.bankleumi.co.uk

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This product is most applicable for UK residents who are not domiciled for tax purposes in the UK and who have foreign earnings. These clients may purchase residential or investment property in the UK using a

Fiduciary Services

The formation and administration of Trusts, Foundations and Companies is at the core of our service. Whether the goal is to is to provide an orderly transfer of assets to future generations, to maximise returns by investing within a tax-efficient structure, or any other aspect of international planning, we can assist in the establishing and managing the most appropriate holding vehicle.

Family Office Services

The idea of having one overall focal point for many areas of planning and investment is appealing to many clients and we are able to provide this service from one office. As an enhancement, we are able to provide Private Trust Company services, where family members may be closely involved in the trustee decision making – giving an element of control if required.

Wealth Planning Solutions

Working in conjunction with tax advisors, we can provide a wide range of solutions for families or companies looking to efficiently manage and protect assets whilst planning for the future. Wherever there is a requirement for fiduciary services from an experienced team, in a reputable and stable jurisdiction, we will be able to assist.

Bank Leumi (Jersey) Limited **Bank Leumi (Jersey) Limited is regulated by the Jersey Financial Services Commission in the conduct of Investment Business and to carry on Deposit Taking Business under the Banking Business (Jersey) Law 1991. For more information phone: 01534 702 525 ***Leumi Overseas Trust Corporation Limited is regulated by the Jersey Financial Services Commission in the conduct of Trust Company Business. For more information phone: 01534 702 500 [email protected] www.bankleumi.co.uk

indicative of future results. We are not acting as your financial adviser or in a fiduciary capacity in respect of any transaction with you unless otherwise expressly agreed by us in writing. Before entering into any transaction you should take steps to ensure that you understand the transaction and have made an independent assessment of the appropriateness of the transaction in the light of your own objectives and circumstances, including the possible risks and benefits of entering into such transaction. You should also seek advice from your own advisers in making this assessment. The information contained in or attached to this message is privileged and confidential. The information is intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by telephone or e-mail and delete this message.

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