The US’s status under the CRS

George Hodgson, Deputy Chief Executive, STEPThis week the IRS confirmed that it has begun fulfilling its obligations to those jurisdictions with which the US government has signed a Model 1A inter-governmental agreement. Under the reciprocal exchange accords, it has transmitted information on those who are tax resident outside the US to the relevant national tax authorities. This puts the spotlight on the US’s position under the OECD’s Common Reporting Standard (CRS).

The US has made it clear that it does not intend to adopt the CRS, arguing that FATCA (US Foreign Account Tax Compliance Act ) better fulfils its needs. This leaves the US as a ‘non-participating jurisdiction’ under the CRS regulations. While under the CRS there is no equivalent of the withholding sanction that is the big stick underpinning FATCA, the result of the US being a non-participating jurisdiction is that all Financial Institutions (FIs) in the CRS will need to treat any US Reporting FI as a Non-Financial Foreign Entity (NFFE). In English, what that means is that any CRS FI holding an account for a US FI (such as a trust in Wyoming, South Dakota or wherever) will need to ‘look through’ the US FI and establish – and report if need be – on its controlling persons.

Some will find this perverse given that the US is exchanging information with many CRS jurisdictions, but not via the CRS. It’s a position the OECD seems to be holding, however, and it raises issues that STEP members should be aware of when dealing with US FIs.

George Hodgson, Deputy Chief Executive, STEP

Specialist apprenticeships on the way

Nigel Race, Director Professional Development, STEPThe Private Client industry continues to grow as a legal area and demand for private client legal services will only increase as the UK’s demographics change. It is good news, then, that a new apprenticeship in probate has been approved. The apprenticeships will open the door to a younger and more diverse labour pool than exists at present.

And aside from helping to meet the demand for estate administration, the apprenticeship will ensure a well-qualified group, grounded in practical experience and mentored and supervised by specialists in their firms, will increasingly be handling this sensitive area of work and at a level of complexity to suit their competence. STEP has advocated the regulation of will writing and estate administration for many years but, in the absence of regulation, believe this supervised and controlled development of an appropriately skilled work-force is key.

Developed by a group of employers focused on estate administration, with the support of STEP, CLTI and CLC, the new Probate Technician programme offers an exciting career opportunity for those wishing to work in probate but who do not have a prior legal qualification.

The Probate Technician Standard apprenticeship was developed by a consortium of specialist practitioners led by Andrea Pierce of Kings Court Trust together with input at the designated meetings from Michelmores LLP, Irwin Mitchell LLP, Stratega Law, Withy King LLP, Goodwills, and with the support of STEP as the relevant professional body in the private client sphere. Many other forms supported the project through survey responses.

Those qualifying as a Probate Technician will have proof of achievement of expertise in a specialist area of law – making them more attractive to prospective employers, and helping them get that crucial first step on the career ladder. They will also be able to apply for STEP affiliation.

The apprenticeship is part of the UK government’s Trailblazer scheme and is due to come in for the academic year 2017-18. Employers will be able to apply for assistance with their cost for training apprentices.

Read more

Nigel Race, Director, Professional Development, STEP

New EU rules give UK families more freedom over legacies

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The EU Succession Regulation comes into force today, giving much more freedom to families as to how they pass on assets they own in the EU in their wills.

This could be particularly important for UK families with holiday homes in the EU or for those with parents and grandparents living in the EU.

George Hodgson, Deputy CEO of STEP, the professional body for specialists in family inheritance and related areas commented: “Many European countries have so-called ‘forced heirship’ rules, where the law lays down precisely how someone’s assets have to be passed on within the family after death. Until now, for example, a UK family with a holiday home in France had very limited options as to how that could be passed on through the family. The new regulations change that, and should be a prompt to everyone with EU assets to review their inheritance plans”.

Mr Hodgson cautioned that the new rules are complex, but even though the UK itself has opted out of the Succession Regulation, they still give potentially valuable new rights to those with property or other assets in the EU. Given the complexity, however, it would be wise to seek specialist advice as to how to change any inheritance plans.

The EU Succession Regulation comes into force today, Monday 17 August. It has the potential to affect the estates of any individuals with any connection to any EU Member State in which the Succession Regulation has direct application.

The UK has opted out of the EU Succession Regulation, but British owners of holiday homes in EU member states such as France should update their wills and draw up French ones to avoid the country’s forced heirship rules.

Details on the new regulation can be found at http://ec.europa.eu/justice/civil/family-matters/successions/index_en.htm and an example of how the new rules might work is attached.

An example:

Clare is a British citizen who is resident in England but has a French holiday home she uses a few weeks each year. French forced heirship rules would oblige her to leave her holiday home to her husband and children, with clear rules as to how it would be divided. She would like instead to leave it to her brother, since it was bought with money from their grandparents.

Until today, the law governing who receives the French house on Clare’s death was generally French law. But as of 17 August 2015, this need no longer be the case.

The new regulations say that someone can generally choose the law applicable to their inheritance. This can either be the law applying where the deceased had their ‘habitual residence’ at the time of death, or the law of the state of nationality at the time of making the choice, or at the time of death.

As a British citizen, therefore,  Clare can now opt to have her French holiday home treated under English law and leave it to her brother.

George Hodgson is STEP Deputy Chief Executive

STEP LatAm News Digest wrap-up – July’s top stories

Argentinian-flag-behind-courtArgentina topped our most read stories from the region last month, with changes to trust law and a succession ruling of most interest. In case you missed them, here are the top five:

Regulation of Argentine trusts under the new Civil and Commercial Code: On August 1, 2015, a new civil and commercial code (the ‘new Code’, Law No. 26.994) will become effective in Argentina which introduces new regulations in connection with trusts in Argentina. The new Code amends existing Argentinian trust law (Law No. 24,441, the “Trust Law”).

Argentine court hands down succession ruling; rules on applicable law: When deciding on the succession of Cesar Joaquin Porto (Porto, Cesar Joaquin s/Sucesion Ab Intestato) on May 10, 2015, Chamber H of the National Civil Appellate Court (hereinafter, the ‘Appellate Court’) ruled that if the assets of a deceased person were located in different countries, the succession regime applicable where those assets are located should be applied (i.e., the applicable succession law is that of the country where property is situated).

Chile: Tax authority issues circulars on tax evasion as part of reform: Chile’s tax authority (Sp: Servicio de Impuestos Internos, SII) has issued a number of circulars on tax evasion which will apply from September 30, 2015 – this is partly to implement the government’s tax reform. These include circular 51 (on the obligation of financial institutions to share information with the SII and other governmental authorities) and circular 55 (on the validity of the rules to combat tax evasion).

Executives of Panamanian Corporation and Aviation Company Arrested in Multi-Million-Dollar Money Laundering Sting: Michael J. Dodd, also known as ‘Michael Stanley,’  Kenneth Ardell Landgaard, and James Robert Shipman, Jr. were arrested today on charges that they conspired to launder over two million dollars of proceeds from what they thought to be a penny stock fraud scheme. The money was, in fact, provided to the defendants by an undercover law enforcement agent who posed as a criminal stock promoter as part of a sting operation.

Brazilian tax policy likely to increase taxes on financial institutions and high net worth individuals: Recent tax policy trends in Brazil are likely to increase taxes on financial institutions, dividends and high net worth individuals. First, a tax on the profits of firms in the financial sector is due to increase by a third, from 15% to 20%. This increase is scheduled to go into effect on 1 September 2015, and will likely affect the financial industry significantly. Second, high net worth individuals are also likely to be subject to higher taxes on their wealth. Specifically, there are discussions in the Brazilian Congress around targeting dividends, as well as proposals for a federal wealth tax.

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 US News Digest wrap-up – July’s top stories

paying-taxes---one-pays-anotherPresidential candidate, Senator Bernie Sanders’ bid to increase estate taxes for the wealthiest proved of particular interest to our US readers. The top five news items for July follow, in case you missed them:

US presidential candidate proposes increasing taxes on wealthiest: Presidential candidate, Senator Bernie Sanders of Vermont, introduced on June 25 the Responsible Estate Tax Act which proposes increasing estate taxes for the wealthiest Americans. Currently, the first USD5.4 million of an individual’s estate (almost the first USD11 million of a married couple’s estate) are exempt from the tax. The Bill, which aims to reduce “skyrocketing income and wealth inequality” recommends that the first USD3.5 million of an individual’s estate (the first USD7 million of a married couple’s estate) should be exempt from estate tax.

B.C. Supreme Court cures will that did not comply with legal requirements: In Re Yaremkewich Estate, the Supreme Court of British Columbia held that the testamentary documents the deceased left constituted a valid will under the Wills, Estates and Succession Act 2009 even though they did not comply “with the formal execution requirements” of the Act.

Court renders first decision on provincial residency of a trust: In Discovery Trust v Minister of National Revenue (2015 NLTD(G)86), a trust tax return was reassessed following a finding by an auditor that emigrating the trust to Alberta was abusive. In 2008, the Discovery Trust filed returns as if it was resident in Alberta (as opposed to Newfoundland) and thereby saved CAD9 million approximately in tax.

Presidential candidate to sue US government over foreign bank account reporting rules: Senator of Kentucky and Presidential candidate Rand Paul is to sue the Internal Revenue Service in pursuance of a court declaration that its Foreign Bank Account Reporting (FBAR) regime and the Foreign Account Tax Compliance Act (FATCA) are unconstitutional.

BC Supreme Court declares will invalid after son “failed to show” it was duly executed: In the case of Harshenin v Khadikin (2015 BCSC 1213) the Supreme Court of British Columbia held a will invalid because the defendant had failed to prove that it was “duly executed in compliance with the requisite statutory formalities” and therefore revoked a grant of probate issued to the defendant with regard to his late father’s estate.

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 – July’s top stories

Rope-and-anchorA focus on non-doms and offshore proved especially interesting for readers of our STEP International News Digests for July 2015. In case you missed them, here are the top ten worldwide industry items.

Non-doms’ UK property to be drawn into inheritance tax net: The British government’s summer Budget announced yesterday includes two momentous measures affecting non-domiciled residents from April 2017. The first is an end to the indefinite nature of non-dom status. At the moment, a qualifying non-domiciled resident can elect for the remittance basis of taxation, under which they do not pay tax on income and assets kept offshore.

Jersey fiduciary acquitted of failing to report ‘suspicious’ transaction: Jersey’s Royal Court has acquitted a director of trust and company service provider STM Fiduciaire of charges related to suspicious transaction reports, in the first criminal prosecution of its kind.

Appleby to sell fiduciary business: Offshore legal, fiduciary and administration service provider Appleby has announced ‘the management buyout of its fiduciary business (AFB) for an undisclosed sum, backed by private equity firm Bridgepoint’. AFB provides trust and corporate services (TCS) administering over 10,000 structures for almost 6,000 clients from nine locations.

Cyprus hopes to tempt foreign investors with sweeping tax reforms: Cyprus has announced a series of tax reforms to attract foreign investment. The most revolutionary is the introduction of the new concept of domicile. Foreign individuals classed as tax-resident under the usual day-counting basis can qualify as non-domiciled if they meet certain criteria to be set out in as yet unpublished draft legislation. Non-doms’ income from dividends will be exempted from the 17 per cent special defence contribution, thus capping the effective dividend tax rate at 12.5 per cent.

UK expected to renew pressure on British Overseas Territories over ownership registers: The UK government is expected to resume its pressure on British Overseas Territories to set up registers of company beneficial ownership, at the Joint Ministerial Council meeting in London later this year. Cayman Islands premier Alden McLaughlin made the announcement at a meeting of Overseas Territories (OTs) leaders in Bermuda last week. Although there has been a brief respite in the pressure from London since the UK general election, the matter has not gone away, he said.

UK ‘successful’ in attracting wealthy migrants since 2000: The UK has been far more successful at attracting high-net-worth migrants than any other country in the past 14 years, according to a report from the consultancy New World Wealth. There was a net inflow of 125,000 high-net-worth individuals (HNWIs) into the UK in the 2000-2014 period, the report found. The country’s main attraction is, of course, London, with its language advantage, international nature, ease of travel to EU countries, lack of restrictions on moving money and buying property, and high-quality education system.

European Succession Regulation – Selling French probate property from 17th August 2015: The European Succession Regulation will start to take full effect from 17 August 2015. After this date, French properties being sold by deceased estates will need to be handled with great care. British nationals who die resident in England with French property will, in most cases, have their French estate dealt with under English law. This means that the notaire selling the probate property has to do so under English law.

Facebook lets users appoint ‘heir’ to manage account when they die: Facebook users in the UK can now hand over administration of their profile to a friend or family member after their death.

Tackling offshore evasion: The UK government announced four consultations as part of its publication Tackling Evasion and Avoidance. These take forward HMRC’s strategy for tackling offshore evasion, No Safe Havens. An update on this strategy was published in April 2014.

Indian Revenue sets conditions of Black Money Act amnesty: The Indian federal government has set out exactly how the Black Money Act and its associated disclosure opportunity will work.

 

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 UK News Digest wrap-up – July’s top stories

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The UK Budget delivered by Chancellor George Osborne MP on 8 July provided a focus for many of the stories of most interest to our readers. In case you missed them, here are the top ten most viewed items.

Non-doms’ UK property to be drawn into inheritance tax net: The British government’s summer Budget includes two momentous measures affecting non-domiciled residents from April 2017. The first is an end to the indefinite nature of non-dom status. At the moment, a qualifying non-domiciled resident can elect for the remittance basis of taxation, under which they do not pay tax on income and assets kept offshore. After a certain length of time as resident they must pay an annual remittance basis charge (from GBP30,000 to GBP90,000) but they retain the offshore tax exemption. The only exception to this is inheritance tax (IHT), to which they become liable after 17 years of UK residence.

Jersey fiduciary acquitted of failing to report ‘suspicious’ transaction: Jersey’s Royal Court has acquitted a director of trust and company service provider STM Fiduciaire of charges related to suspicious transaction reports, in the first criminal prosecution of its kind. Michelle Jardine was the Money Laundering Reporting Officer at STM in May and June 2011, when the offences were alleged to have taken place. She was accused of failing to report a suspicious transaction where funds were remitted by an unknown third party to a politically exposed person (PEP) in a high-risk jurisdiction.

Appleby to sell fiduciary business: Offshore legal, fiduciary and administration service provider Appleby has announced ‘the management buyout of its fiduciary business (AFB) for an undisclosed sum, backed by private equity firm Bridgepoint’.

Scrutiny of IHT-driven deeds of variation begins: The government has launched a consultation on the use of deeds of variation (DoV) for tax purposes, to ensure that they are not being abused. The consultation was promised by Chancellor George Osborne in the Budget immediately preceding the May general election.

More IHT planning brought under DOTAS rules: HM Revenue & Customs is proposing to strengthen the ‘hallmarks’ it uses to identify inheritance tax (IHT) planning arrangements that must be notified by promoters and users under the Disclosure of Tax Avoidance Schemes (DOTAS) regime.

Small business owners to pay higher dividend taxes: From April 2016 the dividend tax rate will be increased to 7.5 per cent for basic-rate taxpayers, 32.5 per cent for higher-rate taxpayers and 38.1 per cent for additional-rate taxpayers. The measure, included in the summer Budget statement, will change the economics of operating a small business as a limited company.

Finance Bill 2015 Explanatory Notes: HM Treasury’s explanatory notes relate to the Finance Bill 2015 as introduced into Parliament on 14 July 2015. They have been prepared jointly by the HM Revenue & Customs and HM Treasury in order to assist the reader in understanding the Bill. They do not form part of the Bill and have not been endorsed by Parliament.

Summer Finance Bill: The Summer Budget provided the Chancellor with the opportunity to indicate a direction of travel for taxation over the five year life of the present Parliament. This includes reform in a number of areas with a Business Tax Road Map and over 30 consultations promised. EY.

Summer Finance Bill 2015: A collection of supporting documents for Summer Finance Bill 2015 from Gov.uk. The Finance Bill is the vehicle for renewing annual taxes, delivering new tax proposals and maintaining administration of the tax system. Finance Bill 2015 supporting documents.

Guidance for accountants: Guidance from the Legal Ombudsman provides ICAEW Chartered Accountancy firms, that have become authorised providers of probate services, under the provisions of the Legal Services Act 2007, with an overview of the Legal Ombudsman scheme.

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. STEP’s news digest services include twice weekly UK and 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

Recognise excellence, cast your vote

pswpAs many of you are aware, the 10th annual STEP Private Client Awards will soon be upon us. As Chair of the Presiding Judges I help review entries from around the world and coordinate the difficult task of helping choose the winners. There is, however, one category that is decided solely by STEP members. The Trusted Advisor of the Year category recognises an outstanding individual practitioner in any discipline serving private clients or an advisor who stands out as an expert in the field. The nominees for Trusted Advisor of the Year are:

jawp Julia Abrey TEP, Withers

Julia is Partner and head of the Withers’ multi-jurisdictional elder law team in London. She is a specialist in international elder law and capacity issues and is highly rated in Legal 500 2014 and Chambers 2015. Julia also chairs STEP’s Mental Capacity Special Interest Group.

bawp William Ahern TEP, Family Capital Conservation 

William (or Bill as he is more commonly known) is based in Hong Kong having been admitted as a solicitor in Australia, Hong Kong and England and Wales. He is the Principal of Family Capital Conservation, which assists intermediaries and wealthy families in the areas of complex succession, cross-border tax and family legacy. Bill is a former Chair of STEP Hong Kong and a member of the STEP Worldwide Council.

jbwp Jonathan Burt TEP, Harcus Sinclair

Jonathan is a partner with the law firm Harcus Sinclair. Previously, he was a partner with Baker & McKenzie and a managing director of Barclays Wealth. He specialises in advising clients on complex international matters typically involving cross-border tax and trusts, multi-jurisdictional succession planning and conflict of law issues.

walidwp Walid S. Chiniara TEP, Deloitte Middle East

Walid is a Partner at Deloitte Middle East, and leads Deloitte Private across the GCC and MENA region. He is a leading family business advisor, a corporate finance lawyer, and an accredited mediator specialised in managing intergenerational conflicts, with 35 years’ experience working across five continents.

mgwp Martyn Gowar TEP, McDermott Will & Emery

Martyn is senior counsel at McDermott Will & Emery UK LLP and an Executive Committee Member of the Society for Advanced Legal Studies; Chairman of the Succession Sub-Committee of the Chartered Institute of Taxation; Vice President (Europe) of the International Academy of Estate & Trust Law; Chairman of the Estates Business Group; and a member of the STEP Journal Editorial Board.

qcwp Christopher McCall QC TEP, Maitland Chambers

Christopher specialises in trusts, tax and charity matters at Maitland Chambers.  Over a long and distinguished career, he has acted extensively for and against HMRC and for the Attorney‑General in charity matters. He has fought numerous complex appeals in the Privy Council, House of Lords and Court of Appeal. Legal directories consistently rate him in the front rank for private client work.

The PCAs are an occasion to recognise and celebrate outstanding work in the field by our fellow practitioners. Voting is open to STEP members until 31 July 2015. I hope all of you will take the time to vote and show the high regard in which you hold your peers.PCA logo 2015

Paul Stibbard TEP is Executive Vice Chairman with Rothschild Trust in London. He sits on STEP’s International Committee, Business Families Special Interest Group Steering Committee and has been Chair of the Presiding Judges for the STEP Private Client Awards three times.

The post-election UK Budget was radical — but only with a small r

Wendy WaltonWith five years before the next UK General Election, many predicted the Chancellor would make radical tax changes, but the announcements fell short of hitting that mark.

In his March 2015 Budget, George Osborne stated that he intended to review non-UK domicile status and whether it should be harder to obtain. Changes were expected to the period for which a remittance basis election must be made, but instead the Chancellor has chosen a more direct method of chipping away at the tax advantages of non-UK domicile status. Non-dom status survives but, from April 2017, anybody resident in the UK for more than 15 of the past 20 tax years will be deemed UK domiciled for all tax purposes ‒ there are no grandfathering rules. This will mean that they will no longer be able to use the remittance basis from their 16th year of UK residence and they will also be deemed domiciled for inheritance tax (IHT) purposes. A child’s domicile under general law and deemed domicile for tax purposes will be tested by reference to each child’s own individual circumstances. In future, those who had a domicile in the UK at birth will revert to it whenever they are resident in the UK.

Once a non-UK domiciled individual has acquired deemed domiciled status under the 15-year rule they will need to spend over five tax years outside the UK to lose it. UK domiciliaries who leave the UK after 5 April 2017 having been here for over 15 years will also be subject to the five-year rule even if they intend to emigrate permanently.

Non-UK domiciliaries who set up an excluded property trust before becoming a deemed UK domicile under the 15-year rule will not be taxed on income and gains retained in the trust. However, such long-term residents will, from April 2017, be taxed on any benefits, capital or income received from such trusts on a worldwide basis. Excluded property trusts will now fall within the UK IHT net if they own UK residential property (occupied or let) through an offshore company, partnership or other opaque vehicle.UK Budget Red Briefcase111

The Chancellor also chipped away at the tax breaks for private equity fund managers: carried interest will still be taxed under capital gains tax rules but tax deductions will be significantly restricted in many cases. Similarly, the restriction of mortgage interest relief for buy-to-let investors will make letting less tax-efficient when fully implemented by 2020/21.

The long promised IHT break on family homes duly emerged but will only apply where the home is passed on to a direct descendent and tapered away for estates with a net value of more than GBP2 million (before reliefs and exemptions). The additional relief starts at GBP100,000 for deaths in 2017/18 and only reaches GBP175,000 by 2020/21: the freeze on the main nil band will be maintained. The cut in pension tax relief for high earners that will pay for this is also to be phased in with the transitional rules softening the blow by giving everyone two GBP40,000 annual allowances to use in 2015/16.

Last week’s Budget also confirmed to estate planners that multiple trusts will remain effective for IHT provided they are set up and funded on different days. Individuals who settle multiple trusts will no longer have an unlimited number of IHT nil-rate bands but it will be possible to settle property up to the value of the nil-rate band into trust every seven years.

Perhaps the most radical change was the decoupling of the personal tax regime for dividends from corporation tax. Without the notional credit, the new rates could collect up to 6 per cent more on dividends and, although the GBP5,000 nil band will limit the effective tax increase for many, there will still be an element of double taxation. Those looking to forestall the change by paying out larger dividends this year will save some tax, but will also bring forward any higher rate tax liabilities to boost tax revenues in January 2017.

So, while there were some surprises, their impact was tempered with transitional rules and long lead times: the overall impression was more evolution than revolution.

Wendy Walton TEP is the Chair of the STEP UK Technical Committee and is a Partner and National Head of Private Client Services at BDO LLP. Read her March analysis of the Chancellor’s earlier 2015 Budget.

STEP LatAm News Digest wrap-up – June’s top stories

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Want to know why FIFA and FATCA were big news items in the Latin American private wealth sector last month? Welcome to the wrap-up of the top five most popular stories in the STEP LatAm News Digest throughout June 2015. In case you missed them, here are the worldwide industry news stories most viewed by our readers.

Effect of signing up to US FATCA: Law firm Posse Herrera Ruiz explains the effect of Colombia’s accession to the US’ Foreign Account Tax Compliance Act (FATCA). Starting in June, the two countries will automatically exchange tax information on a monthly basis: the US Internal Revenue Service (IRS) will share tax information about Colombian residents who have bank accounts in the US (including names, tax ID numbers and income or dividends paid into their accounts) to Colombia’s tax authority (Sp: Dirección de Impuestos y Aduanas Nacionales) and Colombian financial institutions will share the same information with the US when the accountholders are US taxpayers.

Latin American countries investigate FIFA officials: Brazil, Costa Rica and Argentina have opened domestic investigations into possible tax evasion, money laundering and bribery allegedly committed by current and former officials of football associations. Costa Rica and Argentina are actively supporting a US investigation into the matter.

Colombia and US sign FATCA IGA: Colombia has signed a Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement (IGA) with the US. The agreement is intended to combat offshore tax evasion by establishing the exchange of information between the two countries. It will also enable information about US taxpayers in Colombia to be referred by financial institutions to the country’s tax authority (Sp: Dirección de Impuestos y Aduanas Nacionales de Colombia, DIAN).

There’s gold offshore: Mark Bridges TEP considers the future of offshore tax planning.

Foreign tax exemptions disallowed: Panama’s Varela government enacted Law 27 in May 2015, introducing important fiscal reforms. Non-residents’ income from Panamanian public bodies, non-taxpayers and loss-making companies are now subject to withholding tax, and there is no exemption from Panamanian withholding tax if the ultimate recipient of the income can claim tax credits in their country of residence.

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. STEP’s news digest services include twice weekly UK and 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

Follow @STEPLatAm for regular industry news across the region.