After a long journey, and much campaigning over the years, it seems like the wait for no-fault divorces will finally be over on 6 April 2022. The government had originally planned for the Divorce, Dissolution and Separation Act to be implemented in Autumn 2021. While the delay is disappointing, particularly for separating couples that are waiting for the no-fault regime to come into play in order to avoid an acrimonious process, the clarity that a set date provides is welcome.
This article provides an introduction to family philanthropy, outlining the key issues that need to be considered in order to ensure a successful charitable project. These include charitable themes, funding, ways of operating, jurisdiction, the role of the family and ethical issues.
If, for whatever reason, a trust or a simple outright gift to children is inappropriate, what are the alternatives? Some years ago, much was made of so-called 'family limited partnerships' and while they remain the right vehicle for some, they are appropriate only for those with at least £10 million to spare because of the financial regulations to which they are subject. Enter the family investment company.
Making a will is a vital part of any estate planning exercise. Sharing wealth with family and other loved ones in the most tax-efficient way possible is a priority for most people. Their aim is to provide for partners and ensure that children are supported financially to achieve their goals, whether those include buying a property or starting a family or business. Given this strong desire to share their wealth, it is concerning that nearly two-thirds of adults in the United Kingdom do not have a valid will in place.
Unmarried, cohabiting couples are the fastest-growing type of family, with an increase of more than 25% in the past decade. As house prices continue to rise faster than average incomes, many young people are turning to the 'bank of mum and dad' to help with their first property purchase. While such scenarios are increasingly common, they give rise to a number of legal issues.
Governments recognise that encouraging people to start businesses and employ others is important for the economy, and that any charge to tax on disposal should be mitigated to recognise the years of work involved in building a business and the financial risk that people take in doing so. This was the principle behind business asset disposal relief when it was introduced in 2008 to replace the earlier business asset taper relief.
The reporting requirements under the EU Directive on Administrative Cooperation in the Field of Taxation (DAC6) as it applies in the United Kingdom are now restricted to cross-border arrangements falling within one specific category of hallmark, Category D, rather than all of Categories A to E listed in DAC6. This is welcome news for lawyers, accountants and other professionals in the United Kingdom working on cross-border transactions and other arrangements, and for their clients.
UK-residents who are US citizens and beneficiaries of US trusts may be taxed twice on the trust's income or capital gains because of the overlapping scope of UK and US taxation. The UK-US Double Taxation Convention may not serve as the desired panacea where there is a mismatch in both the timing of tax liabilities and the taxpayer's identity under the domestic laws of each jurisdiction. However, UK residents can mitigate this exposure.
Directors of non-UK-incorporated, non-UK tax resident companies which have some connection with the United Kingdom have an important role in ensuring that the company in question does not become UK tax resident. The Court of Appeal recently held that a Jersey-incorporated company with a majority of Jersey-based directors was UK resident. Although the facts of the case were unusual, the judgment provides some useful pointers as to what went wrong for the company and how it could have done better.
It is often easy to assume that only parties which live in the United Kingdom are required to pay UK value added tax (VAT). However, UK VAT is often paid by individuals, trustees and companies which are resident outside the United Kingdom but use the services of professionals which are based in the United Kingdom. The extent to which VAT is or is not chargeable has changed as a result of Brexit and the end of the transition period on 31 December 2020.
Capital gains tax (CGT) is a tax on the gain in value made when an individual disposes of a capital asset such as a residential property. Most people's homes are exempted from the charge due to principal private residence relief (PPR), which relieves any charge on an individual's only or main residence. However, individuals must be wary of unexpected CGT bills on their main home. The most likely cause of this is the property not being the main residence for a period, meaning that PPR has to be pro-rated.
The issue of sustainability for the charitable sector takes many guises, including in the way in which charities invest funds, but also in the activities which charities undertake and, by implication, fund. Sustainability as a theme can be observed through a number of different lenses; this article deals with the investment of funds and charitable activities in this context.
The EU Fifth Anti-money Laundering Directive was enacted into UK law with effect from 10 January 2020. It requires art businesses to implement systems intended to prevent their potential use in money laundering or for various other offences. The rules apply to those trading, storing or acting as intermediaries in works of art, where the value involved is more than €10,000. This is a significant extension to the existing rules.
The Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2020 were laid before Parliament on 15 September 2020. Among other things, this statutory instrument (SI) implements the new Trust Registration Service (TRS) rules, as extended by the EU Fifth Money Laundering Directive, which came into force on 10 January 2020. The SI is expected to be implemented as drafted.
The Office of the Public Guardian recently launched its online service "Use a lasting power of attorney". This service enables attorneys to prove their status to service providers, such as banks or healthcare providers, by providing them with online access to a summary of the relevant lasting power of attorney (LPA). The principal benefit of the service is that it will speed up the process of verifying an LPA so that it can be used by an attorney to support a donor.
The government has announced that it will introduce a temporary change in the law to allow wills to be witnessed using video technology during the COVID-19 pandemic. The announcement has been welcomed as a necessary response to the pandemic. Some wills are being made with a particular sense of urgency and social distancing measures have meant that the requirement for witnesses to be physically present can be an obstacle.
The government has published its response to the technical consultation on the implementation of the EU Fifth Money Laundering Directive (5MLD) and the Trust Registration Service (TRS). The government appreciated that the broad scope of the changes to the TRS proposed in 5MLD raised concerns in the United Kingdom, and this understanding was reflected in its technical consultation.
The COVID-19 pandemic has had two major implications for family governance structures. In the short term, travel restrictions and health risks have prevented business as usual for the foreseeable future. In the long term, the increasing use of digital communication by families and their professional advisers is disrupting governance structures in some cases. This article provides a practical checklist for family governance in the post-COVID-19 world.
The implementation of the Common Reporting Standard and other data exchange regimes means that Her Majesty's Revenue and Customs (HMRC) is receiving substantial information about the global tax affairs of persons with connections to the United Kingdom, which will enable it to target those who may have failed to declare all of their tax liabilities accurately. One way in which HMRC is following up on the information obtained is through nudge letters, which it continues to issue despite the COVID-19 crisis.
The EU Fifth Anti-money Laundering Directive (5AMLD) has been enacted into UK law with effect from 10 January 2020, with the exception of proposed changes to the Trust Registration Service (TRS). These changes were delayed to permit a technical consultation on the draft legislation to take place between 24 January 2020 and 21 February 2020. The proposed changes to the TRS resulting from 5AMLD would significantly increase the scope of trusts that require registration.