STEP UK News Digest wrap-up – fourth quarter 2015 top stories

A_very_small_house

Will disputes and tax matters, often involving property, were at the forefront of our readers’ minds, according to the top ten news items from the UK. Here they are again:

Lost challenge to will costs litigant dearly: A Berkshire woman who lost her legal challenge to her natural father’s will may have to pay legal costs far higher than the amount she was left in the will.

Charities defeat family’s claim for probate of home-made will: Four charities named as Dorothy Whelen’s residuary beneficiaries have defeated a claim that she executed a second home-made will leaving her entire estate to a friend.

UK Autumn Statement may target tax reliefs: Most tax specialists predict it will be harsher than previously expected, for two reasons. First, the Chancellor has failed to push through legislation cutting tax credits for the low-paid, so that the public sector borrowing requirement will be larger than planned at the time that Finance Bill (no.2) 2015 was drafted.

Cash extracted from wound-up firms to be taxed as income: Next year’s Finance Bill will impose an income tax charge on owners of close companies who liquidate the company in order to share out its assets. At the moment, distributions on liquidation and similar events are taxed as capital gains rather than income.

Inheritance tax (‘IHT’) and trusts – tips and traps: Discretionary trusts, whenever created, and most other forms of lifetime trusts (other than bare trusts and qualifying trusts for disabled persons) established on or after 22 March 2006 are subject to what is known as the ‘relevant property’ regime which imposes a charge to IHT on the capital value of the trust assets on each 10 year anniversary of the creation of the trust and ‘exit’ charges when capital is distributed or property otherwise ceases to be relevant property.

Survey says competition leads to lower price of basic wills and estate administration: A survey of 60 will-writers has found that the average price of a standard single will in the UK fell to GBP83 this year, with the average price quoted by law firms and solicitors at GBP118 (falling from GBP124 in the last year).

Judge bars ex-wife from further litigation: An English family court judge has imposed an extended civil restraint order on an ex-wife to stop her bringing further ‘bitter and intense’ litigation against her former spouse.

HMRC waives ‘correct and complete’ declaration for agents’ online IHT returns: Practitioners who submit an online inheritance tax (IHT) return on behalf of a client no longer need to provide a declaration that the information is ‘correct and complete to the best of their knowledge and belief’.

Second home buyers hit with stamp duty surcharge: Yesterday’s Autumn Statement announced that buyers of ‘additional properties’ will be charged an extra 3 per cent rate of stamp duty land tax (SDLT) from next April. The phrase ‘additional properties’ explicitly includes second homes as well as residential lets. The 3 per cent surcharge will be added to the usual SDLT rate for the property’s price band.

Inheritance Tax: main residence nil-rate band and the existing nil-rate band: Individuals with direct descendants who have an estate (including a main residence) with total assets above the Inheritance Tax (IHT) threshold (or nil-rate band) of £325,000 and personal representatives of deceased persons.
 

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: www.step.org/register.

Follow @STEPSociety for regular updates.

STEP International News Digest wrap-up – fourth quarter 2015 top stories

transparency
Readers of our STEP International News Digests showed a marked interest in the OECD’s Common Reporting Standard (CRS) during the fourth quarter of 2015. In case you missed them, here are the top ten items:

Barclays fined heavily for due diligence failure: The UK’s Financial Conduct Authority (FCA) has fined Barclays Bank GBP72 million for failing to conduct proper due diligence checks on a group of ultra-high-net-worth clients who used the bank to move GBP1.88 billion of funds in 2011 –2012.

UK sets out beneficial ownership register demands on territories: The UK Foreign and Commonwealth Office (FCO) has set out exactly what it requires of its Overseas Territories regarding transparency of company beneficial ownership. The demands stop short of a public central register, but do require that companies or their beneficial owners must not be alerted to the fact that an investigation is under way.

UK professional bodies challenge new benefits charges on non-doms: A group of professional associations have questioned the UK government’s plans for significant reform of the taxation of non-domiciled residents, in particular the ‘dry benefits’ charge to be imposed on settlors of offshore trusts.

CRS by jurisdiction: A jurisdiction-specific overview of the steps taken and choices made by jurisdictions in the context of implementing the Standard. The overview table below will show the current state of implementation of all committed jurisdictions in a single table. In case you would like to have more detailed information about the current state of implementation of the Standard in a particular jurisdiction, you will be able to access jurisdiction-specific legislation by clicking on the green tick relating to that jurisdiction.

BVI to require compulsory register of directors: British Virgin Islands premier Orlando Smith has announced some legislative amendments to improve the BVI authorities’ access to company beneficial ownership information. In a speech to the Assembly on Monday, Smith noted that the BVI, as well as other British Overseas Territories and Crown Dependencies, are under pressure from London to introduce publicly available central registries of the beneficial owners of companies.

Overseas Territories head off UK’s demand for central registers: Britain’s Overseas Territories appear to have successfully resisted the UK’s demands that they set up central registers of company beneficial ownership, directly accessible by the UK authorities.

Have you sorted your LEIs?: The Financial Stability Board is probably the most powerful body nobody has heard of. It was set up by the G20 after the financial crisis and is drawn largely from central bankers. One of the issues it has focused on is effective monitoring of counterparty risk in financial markets.

CRS-related FAQs (pdf): The OECD has published a summary of 41 jurisdictions’ position regarding the Common Reporting Standard (CRS) for automatic exchange of financial information. It has also issued an updated list of CRS-related frequently asked questions, including one concerning the time allowed to verify a self-certification.

Automatic Exchange: The Automatic Exchange of Information (AEOI) portal provides a comprehensive overview of the work the OECD and the Global Forum on Transparency and Exchange of Information for Tax Purposes in the area of the automatic exchange of information, in particular with respect to the Common Reporting Standard.

Russian Federal Tax Service publishes draft blacklist of states that do not exchange information with Russia (pdf): On October 23, 2015 the Russian Federal Tax Service published on the official web-site for information disclosure (regulation.gov.ru/) the first list of states and territories that do not exchange information for tax purposes with Russia or information exchange with which did not meet Russia’s expectations (the “blacklist”). The blacklist may become effective from January 1, 2016.

 

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: www.step.org/register.

Follow @STEPSociety for regular updates.

STEP England & Wales Biannual Statement – December 2015

Alex ElphinstonSince my last statement we have seen changes on the England and Wales Regional Committee with the retirement of Keith Dudley, George Lyall, Gary Killmister and Carol Cummins. I would like to acknowledge their collective contributions over the years – especially Keith and George who have been so integrally involved in the development of STEP from its origins less than 25 years ago.

As you may be aware, Peter McGeown, Denese Molyneux, Duncan Gardner, Deborah Jude and Amanda Simmonds were elected to either STEP’s worldwide Council or the England and Wales Regional Committee and so will formally be attending their first Committee meeting in January. I am also glad to report that Cheryl Farnham has been co-opted to the Committee. Cheryl has attended in her capacity as chair of the UK Practice Committee from which she will soon be standing down. Cheryl has made a great contribution to both Committees already and we look forward to her continued input.

We have come an enormously long way from our small beginnings in 1991 and the worldwide nature of the organisation is now an enormous strength. It is always tremendously heartening to hear from George Hodgson and Sean Smith in STEP’s policy team on how well-received are the representations made by STEP on fiscal and other issues. The international input and extent of STEP plays its part in this. Recently STEP has been very involved in addressing the potential implications of the proposed Common Reporting Standard with HMRC and other bodies. George Hodgson has visited a number of branches on this topic and members’ feedback has been invaluable.

In this regard I would again like to thank the unsung work of the Technical and Practice Committee members and those on the special interest group committees. Without their commitment and generosity in terms of time and expertise we would not be able to respond to the many consultations and proposals or make the representations that we do as a Society.

Volunteering was an issue that was mentioned at STEP’s Leaders’ Forum, held earlier this month in London and attended by representatives from all over the world. I am conscious how each branch relies heavily on the goodwill of, often, a small number of dedicated members. May I take this opportunity to thank you, and recognise your hard work. The local branch is a vital part of the Society providing regular opportunities for education and networking – making and maintaining friendships. If you are not already involved at some level, please do see if there are ways that you too can be involved: you will almost certainly gain more than you give.

The Leaders’ Forum picked up on the feedback you gave as to the priorities for your branch. There was a general recognition that we need to strengthen the brand and raise the profile of the Society. A variety of suggestions were made ranging from actions individual members can take through to branch and national level. The various ideas and suggestions from the Forum are being collated and will be discussed in part at the Branch Chairs’ Assembly in February.

I trust you all have a good break over the Christmas and New Year period, however long or short this may be. It seems to be the one time of year that our inboxes do not overflow in our absence. Having said that, I read today that, last year, 1,566 people filed their tax return on 25 December and over 17,000 on 24 December! I hope you have more pleasurable things to do!

Alex Elphinston TEP is Chair of STEP’s England and Wales Regional Committee