After long negotiations, the UK and EU Parliament are finally marching to the beat of the same 4th AML Directive drum. However, this was not the only big development in trust and estates around the world last month. Welcome to the wrap-up of the top ten most popular stories in the STEP Wealth Structuring News Digest throughout December. In case you missed them, here are the worldwide industry news stories most viewed by our readers.
Non-resident owners of UK homes can seek relief from new CGT charge: The UK government has published details of its plans to impose capital gains tax (CGT) on disposals of UK property by non-resident individuals, trustees, estates and close companies. Non-resident individuals will be entitled to the same CGT reliefs and exemptions as UK homeowners and all valuations will be rebased to April 2015.
Non-doms’ remittance basis charges increased: The annual fee paid by long-term non-domiciled UK residents for being taxed on the remittance basis is to rise from GBP50,000 to GBP90,000. Non-doms who choose the remittance basis may, in future, be locked into it for a minimum of three years.
British Overseas Territories reject public registries: Britain’s Caribbean dependencies, led by the Cayman Islands, have rejected the UK’s attempts to force them to create publicly accessible registries of private companies’ beneficial owners. They are holding the position that the G20 countries must do it first.
Charges brought against alleged HSBC Geneva ‘data thief’: Switzerland’s attorney-general has charged a former employee of HSBC Private Bank Geneva with stealing client account data between 2006 and 2008 and offering to it to several governments in breach of Swiss bank secrecy laws.
Money laundering directive will protect trust beneficiaries’ privacy: Reports suggest that EU member states have reached agreement with the European Parliament on the Fourth Money Laundering Directive, which mandates the creation of registries of beneficial owners for corporates, trusts and other structures. It appears that the information collected on trust beneficiaries will only be available to competent authorities, with no suggestion of any requirement for broader public access.
Guidance on automatic exchange for UK accountholders: The UK tax authority has published a quick guide for account holders affected by the new international agreements on automatic exchange of information under the Common Reporting Standard.
Trustees must now report ID numbers to public trust registry: Further reporting obligations have been imposed on French-resident trust administrators. Article 1649 AB of the Tax Code requires French-resident trustees to declare by 1 January 2015 any changes in the trust status after 8 December 2013, regardless of the tax residence of the trust’s settlor, beneficiaries or assets. Trustees and beneficiaries’ business identification numbers must be reported to the public registry of trusts.
ATED property tax rises sharply: The UK government is increasing the annual tax on residential property owned via a corporate envelope, this time by about 50 per cent. From 1 April 2015, the charge will be: GBP23,350 for properties worth GBP2-5 million; GBP54,450 for the GBP5-10 million band; GBP109,050 for the GBP10-20 million band; and GBP218,200 for dwellings worth more than GBP20 million.
Final regulations on reporting of foreign financial assets: The US Treasury Department has published final regulations on the reporting of specified foreign financial assets under the Foreign Account Tax Compliance Act. Individuals affected must attach a statement to their income tax return describing foreign assets in which they have an interest.
Deadlines coming up this month: US law firm Foley Hoag has published guidance for managers of US and non-US investment funds regarding FATCA compliance deadlines coming up this month. In particular, managers of non-US funds must determine their fund’s classification under the Foreign Accounts Tax Compliance Act and, if necessary, register it with the Internal Revenue Service by 22 December
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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At one of the regular meetings we had with HMRC, there was a short presentation from the Offshore Evasion strategy team. They are keen to get the message out to taxpayers that automatic exchange of information in the shape of the Common Reporting Standard will be coming in relatively soon, with the first exchange of information between tax authorities due in 2017. At that point tax authorities will start to get a flood of very detailed information on anyone with financial assets overseas. They would much prefer that taxpayers in this situation take action now to regularise their affairs via the disclosure options that are available rather than see a whole raft of taxpayers being faced with enforcement action after tax information exchange has commenced.
