STEP Wealth Structuring News Digest wrap-up – August’s top stories


Need to put all the pieces of trust and estate industry news together? Welcome to the wrap-up of the top ten most popular stories in the STEP Wealth Structuring News Digest throughout August. In case you missed them, here are the worldwide industry news stories most viewed by our readers.

Anger at UK’s listing of Cayman as high-risk jurisdiction: The Cayman Islands government has expressed astonishment and horror at its inclusion on the UK financial regulator’s list of jurisdictions with a high risk of money laundering. The list does not include any other British Overseas Territories or Crown Dependencies.

Surprise move against non-doms’ loans backed by foreign income: In an overnight change of policy, HM Revenue & Customs has announced that non-domiciled UK residents must now pay UK tax on offshore income used as security for a loan. The change is effective immediately, although non-doms are being given a grace period to re-finance their existing borrowings.

Amended guidance on UK-US IGA: STEP, The Law Society and ICAEW have amended the UK-US FATCA IGA Guidance and corresponding flowchart to incorporate some new wording from HMRC. This is not a change of substance, simply a clarification that only affects the wording in questions 3, 4 and 5 (on p12 of this guidance). The core message remains the same – practitioners need to take action now to ensure their obligations under FATCA are met.

Pensioner convicted for banking his life savings: A retired nurse became a money launderer when he paid his life savings and pension into his Mauritius bank account, although he had lawfully earned all of it while working for the UK National Health Service, the Privy Council has ruled. Toolsy Beezadhur could not prove that his 45 years’ work as an NHS nurse constituted a lawful business activity under the Financial and Anti-Money Laundering Act 2002, and was duly fined MUR50,000 (EUR1,250).

Clients may sue Standard Chartered over account closures: Standard Chartered Bank may be forced to close 8,000 accounts held by clients in Dubai, as a result of money laundering enforcement action by the New York State regulatory authorities. Some of the clients are reported to be preparing to sue the bank.

Amendments to withholding foreign trust agreements: The US Internal Revenue Service has updated the text of the standard withholding foreign partnership and trust agreements on the FATCA website.

Industry ordered to report tax planning schemes to regulator: From 1 October, Jersey financial firms will have to report any new business connected to tax-planning schemes that are registered under the UK’s Disclosure of Tax Avoidance Scheme (DOTAS) regime.

Canadian government sued over disclosure provisions: Two Canadian-American dual citizens are challenging the Ottawa government’s implementation of the US Foreign Account Tax Compliance Act, which requires banks to report US clients to the US Internal Revenue Service.

Artist’s trustees earn millions in fees: A US court has ordered the Rauschenberg Foundation to pay three of its trustees a total of USD24.6 million for the “extraordinary services” they rendered. The trustees originally charged the artistic foundation more than USD50 million in “reasonable compensation” for their success in increasing the value of the estate, while the foundation had offered to pay them USD375,000.

US authority seizes Abacha funds: The US Department of Justice has seized USD480 million hidden in bank accounts around the world by the former Nigerian head of state Sani Abacha and his colleagues. Abacha embezzled billions of dollars from Nigeria’s central bank while in power from 1993-1998, and laundered it through bank accounts in Jersey, France and the UK before investing it in US securities.

The STEP Industry News Digests provide a round-up of relevant industry news for trust and estate practitioners and other professionals in the wealth management sector. They provide brief summaries of topical news stories gathered from news providers internationally, providing a quick reference for busy practitioners to all the relevant news and issues. The News Digests also feature job listings from our recruitment site and list local STEP branch events and conferences. STEP’s digest services include twice weekly UK and Wealth Structuring (international) editions as well as a bi-weekly North America Digest focusing on the US, Canada and Mexico, and a Latin America Digest.

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