Informing clients of CRS reporting

George HodgsonAt 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.

Many practitioners are probably currently focussed on ensuring FATCA reporting goes smoothly and have not yet given too much thought to the arrival of the CRS, but the message from HMRC is a timely one and highlights the benefits of ensuring that clients are fully aware of the need to regularise their tax affairs if need be, ahead of the new international reporting arrangements coming into force.

George Hodgson is Deputy Chief Executive of STEP.

It’s a good time to be a family business advisor

emma_yeatsA number of STEP seminars on advising family businesses are being held over the coming weeks. Practitioners eager to develop their expertise in advising family businesses and members of STEP’s Business Families Special Interest Group (SIG) should take the opportunity to attend one, if not all, of these expert-led events.

Trustees and the Family Business

Webcast available from 26 January 2015

Dawn Goodman TEP of Withers LLP (winner of the STEP Trusted Advisor of the Year Award 2013/14), examines the trust structures typically used by family businesses, discusses participation by trustees at board level as well as the tensions that can arise, and unveils her top tips for avoiding claims.

This webcast is free to STEP Members, Business Families SIG Members and Contentious Trusts and Estates SIG members.

Structuring the Family Business

27 January 2015

Many aspects of structuring family business will be discussed during this workshop, presented by Jo Summers TEPof PWT Advice, including: what options are available for structuring family businesses; how can the next generation can be brought into the business; and do family partnerships really ‘work’? Delegate numbers are limited for this event so immediate registration is encouraged. This event is worth two accredited CPD hours.

STEP Members — GBP95

Business Families SIG Member — GBP85

Non-Members — GBP125

Family Constitutions – Statements people commit to or something of a pre-packaged product?

3 February 2015

Speakers Ian Marsh and Juliette Johnson examine the mechanics and detail of a family constitution and consider the process and benefits a constitution can bring to a family. There will then be time for a discussion as to whether it is the document itself or the process that is more valuable. This seminar is kindly hosted by Chadwick Lawrence LLP in Leeds.

This event also counts as two and a half hours of accredited CPD. Find out more here.

STEP Members — GBP55

Business Families SIG Member — GBP45

Non-Members — GBP75

Family Businesses, Reputational Risk and Brand Protection

14 April 2015

This STEP Business Families SIG seminar looks to explore the importance of reputation to the family brand and the risks of that reputation and brand being tarnished in any way. Speakers will address what best practices families, in working with their advisors, should put in place to protect businesses from any unwanted exposure and what legal action to take in the event of a crisis. The event will conclude with a networking reception. This seminar is worth two hours of accredited CPD.

STEP Members — GBP65

Business Families SIG Member — GBP55

Non-Members — GBP80

STEP Advanced Certificate in Family Business Advising – Miami enrolment closing in March

Practitioners who are unable to attend any of these seminars but are eager to strengthen their understanding of family business advising should consider studying for the STEP Certificate in Advanced Business Advising (on offer in the UK, US and Switzerland).

This qualification is valuable for any practitioner working with a family business— be they lawyer, banker, accountant, financial planner, trust manager, family office executive or any other related specialist. The course is set at the level of a STEP Diploma paper and applicants should have experience of working with a family enterprise. Intakes for this qualification are scheduled in Miami in March and in London in April as well as two intakes in Switzerland in May and September. Click here for more information and an enrolment form.

Emma Yeats is STEP’s Special Interest Group Executive. Click here for more information on STEP’s SIGs. Click here for more business families and SIG-related events worldwide

Scam Alert: Hotel Room Reservations Services from Exhibitor Housing Services (EHS)

George HodgsonA third-party company, Exhibitor Housing Services (EHS), is contacting our Mauritius conference speakers and exhibitors, introducing themselves as the official ‘housing bureau’ for the event or as a representative from the InterContinental Resort Mauritius or STEP and offering room rates lower than those quoted on our website.  This is not the case. EHS is not affiliated in any way with STEP or with the InterContinental Resort and we believe they will charge you an undisclosed booking fee in addition to the rates they are quoting.

We would strongly recommend that you do not give any personal information, including credit card details to EHS or any other unknown vendor.  If you receive an e-mail from EHS, please forward to it to events@step.org

In order to guarantee your hotel reservation, please go to the venue page on the STEP Mauritius Conference website http://www.step.org/venue-mauritius for full details of rates and how to book.

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

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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.

To subscribe to STEP’s digest services you will need to first register here: http://www.step.org/register

STEP UK News Digest wrap-up – December’s top stories

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Feeling a bit foggy after the holiday break? It’s time to get back up to speed with the latest trust and estate developments. Welcome to the wrap-up of the top ten most popular stories in STEP’s online UK Digests throughout December as clicked by our readers.

Draft legislation to block multiple-trust IHT planning: The government has published new legislation to deter inheritance tax mitigation through the use of multiple trusts, and to simplify the periodic IHT charges imposed on relevant property trusts.

Single settlement nil-rate band proposal dropped in Autumn Statement: The Treasury has abandoned its plan to introduce a single inheritance tax (IHT) nil-rate band to be divided among all of an individual settlor’s trusts. Instead it will introduce new targeted rules to prevent the use of multiple trusts to avoid inheritance tax.

Gifting home into ‘asset protection trust’ was a tax disaster: Practitioners discuss a case in which a married couple each placed their share of the matrimonial home in a so-called asset protection trust, to protect it from means-testing for local authority care home fees. HM Revenue and Customs now says the parties have used up most of their nil-rate bands creating the trust, which is in any case ineffective for inheritance tax purposes.

High Court dismisses MCA as test for testamentary capacity: The recent England and Wales High Court case of Walker v Badmin establishes that the long-held Banks v Goodfellow test for testamentary capacity overrides the capacity test set out in the Mental Capacity Act 2005. However, some practitioners still want to see the matter confirmed by appeal to a higher court.

Court agrees to reverse mistake that triggered big CGT bill: The England and Wales High Court has agreed to set aside a clause in a trust deed that accidentally created a GBP650,000 capital gains tax liability (Kennedy v Kennedy, 2014 EWHC 4129 Ch).

How to decide whether to challenge a will: An expert at New Square Chambers examines the issues charities face when deciding whether to litigate over a legacy or residuary gift contained in a will. He looks at a number of recent cases where the charity got it wrong – notably the RSPCA in the Sharp case, and the Woodland Trust in the more recent case of Loring.

Beware of these bogus HMRC documents: HM Revenue and Customs has published some examples of the highly ingenious bogus emails, websites letters, text messages, and phone calls used by fraudsters to steal taxpayers’ personal information.

Supreme Court considers long-divorced wife’s claim on husband’s business assets: This week the UK Supreme Court will hear Kathleen Wyatt’s appeal for financial remedy against her ex-husband. When they divorced 22 years ago, the couple had neither assets nor income. Dale Vince later started a wind power business that made him rich.

Deceased’s ISA benefits can be passed to surviving spouse: The rules on individual savings accounts are changing to allow a spouse to inherit their deceased partner’s ISA-related income tax and capital gains tax benefits via an additional ISA allowance. The surviving partner will be able to save as much into their own ISA as their spouse used to have, in addition to their normal annual ISA limit, with effect from 6 April 2014. Also, people who die before age 75 with a joint life or guaranteed term annuity can now pass on the benefit tax-free, and from 6 April 2015 the 55 per cent special charge on pension funds at death is abolished.

Autumn statement preview: The Chancellor’s annual Autumn Statement will be published on Wednesday, 3 December. In addition to tax measures already consulted upon, there are predictions on various (unannounced) measures, including: increased council tax bands for higher-value properties; the abolition of higher-rate tax relief on pension contributions; a lifetime cap on ISA investments; and an increase of the IHT nil-rate band to GBP1 million per couple.

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.

To subscribe to STEP’s digest services you will need to first register here: http://www.step.org/register