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© Bircham Dyson Bell LLP 2017 50 Broadway London SW1H 0BL | 51 Hills Road Cambridge CB2 1NT
INDIVIDUAL MATTERS AUTUMN 2017It is a pleasure to welcome you to our latest issue of Individual Matters where you will find a mix of articles that is as diverse as the concerns of the individuals who are our clients.
Are texts and emails the future of Will-making? How to answer the questions that the legal aspects of gene technology raise? Are Lasting Powers of Attorney really dangerous? Just how much stamp duty should you pay on a country house? Pitfalls for the Bank of Mum and Dad. The oft-postponed changes for non doms and international ownership of UK property. Swiss connections. Certainly a diverse array of topics in this issue.
A thread that affects all individuals and trustees, both international and UK-based, is increasing global transparency.
The pressure for international tax transparency has been mounting ever since FATCA was first enacted in 2010, later extending to wider practical aspects such as who has control of a company and source of funds. Turn to page 10 to meet the two latest additions, the Legal Entity Identifier and the Trust Register.
Last, but certainly not least, we are delighted on this occasion to welcome (page 7) guest writer James Ratcliffe, now of The Art Loss Register, formerly of BDB.
Simon Weil (Co-head of the Private Wealth International Team)E [email protected] +44 (0)20 7783 3683
Helen Ratcliffe (Co-head of the Private Wealth International Team)E [email protected] +44 (0)20 7783 3661
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MAKE YOUR WILL BY TEXT OR EMAIL? The Law Commission has recently published a consultation paper on Wills. The Consultation looks at concerns which have been expressed about the current law, much of which dates from the nineteenth century.
There are suggestions that the current law discourages some people from making Wills, that it is out of step with social, technological and medical developments, and may not give best effect to a person’s intentions.
Despite the lurid media headlines, there are no immediate plans to introduce Wills made by text, email or video. Instead, what is proposed is that in exceptional circumstances it would be possible to ask the Court to recognise as a valid Will a document or communication that does not comply with the necessary formalities. Whether or not this will prove useful is debatable. At present, if all
parties are adult and in agreement then it is generally possible to implement a deceased’s wishes informally without involving the Court.
There is also a proposal for new legislation that would enable digital Wills to be made in future without a specific Act of Parliament to introduce this. Given that the abolition of land certificates and introduction of a fully electronic Land Registry appears to have resulted in an increased opportunity for fraud, full Parliamentary scrutiny when specific proposals have been drawn up would be preferable.
The Commission also looked at how individuals whose mental
Elizabeth Neale (Partner)E [email protected] +44 (0)20 7783 3696
Sabrina Underwood (Associate)E [email protected] +44 (0)20 7783 3409
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THE GENE IS OUT OF THE BOTTLEWe are accustomed, by making a Will, to having a relatively broad ability to control the disposition of our property following a death. But what about control of what happens to ourself, to our body and genetic tissue? The law is only beginning to catch up with questions relating to the posthumous use of genetic material, to inheritance by posthumously procreated children, and whether exhumation should be allowed for the purpose of genetic testing.
Rapid advances in science have made possible scenarios that were the stuff of science fiction until only recently, bringing difficult cases to prominence in the media. Meanwhile, legislation both in the UK and elsewhere, lags behind.
A high profile case featured in the media recently was the exhumation of Salvador Dali, as colourful in death as in life. The daughter of his former cleaner claimed Dali was her father and the Spanish court gave permission for exhumation. Genetic testing failed to establish paternity, impeding the anticipated claim for an inheritance from what was rumoured to be a very large estate.
It is hard now to believe that until 1969 children born ‘out of wedlock’ would not inherit unless specifically named. Fast forward 50 years and the law has to try decide who is to be
treated as a parent of a child born as a result of a range of fertility treatments, or of a surrogacy arrangement, or in a same sex relationship – in order to determine, among other things, who will be eligible to inherit, whether under a general gift by Will to children or in some other way. And what of inheritance by children conceived after the parent’s death using their stored genetic material? As we all live increasingly global lives it may be the law of another country, not our ‘home’ jurisdiction, that decides some of these life and death questions.
A topic some individuals have strong views about, while others prefer not to consider it, is what should happen to their body after death. Many will no doubt be surprised to learn that directions, even by Will, as to the disposition of a body are not legally binding. The Executors
Simon Weil (Co-head of the Private Wealth International Team)E [email protected] +44 (0)20 7783 3683
...THE KEY TO SUCCESSFUL WILL-MAKING IS...CLARIFYING THE DIFFICULT PERSONAL CHOICES, UNDERPINNED BY GOOD ESTATE TAX PLANNING...
capacity may be limited or declining can be assisted when making Wills. This is a difficult area and each situation has to be assessed on a case by case basis. It may result in uncomfortable conversations and can, when medical evidence is required, make the Will-making process expensive. Although the proposals may give advisers greater certainty, these practical difficulties cannot be easily overcome.
Whilst it is right that the law is reviewed from time to time and the law should be adapted to take into account changes in circumstances, often the
reasons people fail to make a Will are less about how to comply with precise formalities and more about a reluctance to face their own mortality and to make sometimes difficult decisions about how to benefit their families and who should have care of minor children. Changing the law may make the Will-making process more accessible, although care will need to be taken not to widen the scope for abuse. The key to successful Will-making is good support from empathetic professionals who can assist in clarifying the difficult personal choices, underpinning this with good estate tax planning.
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appointed by a Will are, however, entitled to the body and must take responsibility for its disposal. So for those to whom this is something that matters, the key element is a good choice of Executors who can be relied upon, and who know to step in early enough before, for example, other and possibly irrevocable arrangements may have been made by family members or others who have a relationship that gives them informal status and who feel that they ‘know’ what was wanted.
A recent, widely-reported, court case considered this issue in the context of a teenage girl with terminal cancer, known as JS, who had expressed a firm and certain wish that her body be cryogenically preserved in the US after her death. Mr Justice Jackson ruled that, as she was a minor and therefore unable to execute a valid Will, her parents’ wishes should prevail. As her parents could not agree, he ruled in favour of the mother who wanted to comply with her daughter’s wishes.
This case was considered in the Law Commission consultation paper discussed by Liz and Sabrina in the previous article. The Law Commission’s concern that a person under 18 in this situation cannot currently make a Will extended also to the fact that the young person might have significant assets. This might be the result of a personal injury settlement for example, or they might be a dotcom millionaire. Currently the young person cannot control who receives their assets, or who has control of their body after their death. The Law Commission provisionally recommends reducing the age for Will-making to 16, and asks for views on whether people younger even than 16 who show sufficient maturity (such as the 14 year old JS) should be able to make a Will.
There are no easy answers to any of these questions, but they all cry out for our legislators to face the hard choices and give some certainty.
...IT MAY BE THE LAW OF ANOTHER COUNTRY, NOT OUR ‘HOME’ JURISDICTION, THAT DECIDES SOME OF THESE LIFE AND DEATH QUESTIONS...
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ARE LASTING POWERS OF ATTORNEY SO VERY DANGEROUS? Lasting Powers of Attorney (LPAs) are familiar as the power that an individual can give to a trusted family member, or friend or professional, to deal with their affairs if they develop problems with mental capacity, whether because of a degenerative disease such as dementia, or perhaps the result of an accident. No adult with family or financial responsibilities is ever too young to get advice on creating an LPA.
However anyone who heard Denzil Lush, a former judge of the Court of Protection, on the Today programme on 15 August would have wondered whether they had been right to create an LPA. He painted a picture of widespread abuse of these powers and said that, if he ever lost mental capacity, he would prefer to have a deputy appointed by the Court of Protection (of which he was the leading judge for decades) rather than an LPA.
DELAY AND COST OF A DEPUTYThere are indeed some relatively unusual situations where we would recommend having a deputy appointed by the Court of Protection, particularly cases where cooperation between attorneys (or between attorneys and family members who are not attorneys) would be unusually difficult. Other factual situations can occasionally make this the preferred route.
These are the exception rather than the rule. The high cost of applying to the Court for a deputy to be appointed, and the greater running costs, are a strong deterrent. Even more significant is the delay before a deputy may act – six months is not unusual, and this at a time when vital decisions about care etc often need to be made.
Denzil Lush’s perspective may reflect the fact that LPAs come before a judge if things have gone wrong. The much larger number of cases where everything is properly done in
the best interests of the person who had impaired capacity do not come before the Court. It is true that LPAs aren’t perfect but, provided legal advice is taken when they are made, they are far and away the best option available for most family circumstances.
NOT JUST FINANCESLPAs aren’t just about money and assets. There are also LPAs for health and welfare decisions. Although it is technically possible to get a deputy appointed for health and welfare decisions, in practice the Court will almost never do so.
Alastair Collett (Partner)E [email protected] +44 (0)20 7783 3661
Judith Morris (Consultant)E [email protected] +44 (0)20 7783 3661
...LPAS AREN’T JUST ABOUT MONEY AND ASSETS. THERE ARE ALSO LPAS FOR HEALTH AND WELFARE DECISIONS...It would be a pity if Denzil Lush’s comments put people off creating health and welfare LPAs. The medical professions are generally now accustomed to working with health LPAs, and Advance Decisions, as part of integrated patient care. If an individual takes no action at all, they can be left with the medical advisers, not their chosen family members or friends, taking the key decisions.
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DO YOU KNOW WHAT YOU OWN?Do you know what you own? Just as important, are others who need to know also in the picture – and up to date?
Our art and cultural property group is often confronted with a wide variety of problems that have arisen because not everyone who needed to know was clear about the ownership of a particular item. These can range from tax mistakes or disappointed expectations, to family disputes, to valuation and commercial questions. With goodwill on all sides problems can sometimes be settled amicably, but sometimes they can end up with litigation – particularly distressing where the parties in disagreement are members of the same family.
Personal possessions are often legitimately in the possession of someone who does not own them. Often a member of the older generation may ‘house’ a large item, such a vintage car or a big piece of furniture, that the younger generation cannot yet fit in. Likewise, if a large house and its chattels are held in trust, the member of the family living in the house will use those chattels pretty much as his or her own. It is easy for the occupant to get muddled and sell a disliked picture on the wall, or a car taking up space in the garage. When the true owner, be it trustees or another family member, comes later to claim what is theirs it may no longer be there. Equally, depending on the ownership, an item may or may not be taxable on the death of the occupant – it is important to know which!
Certain outstanding chattels may in the past have benefitted from ‘conditional exemption’ from inheritance tax. If an item is sold by mistake, not only has
the item gone but the sale may have triggered a tax charge at up to 80%.
Professional trustees in particular will worry not only about the greater responsibility that their professional status places on them, but also that they lack the knowledge of family chattels that family members may have.
Suppose a Will leaves ‘my grandfather’s watercolours’ to a particular beneficiary. Will the Executors and the family be able to agree on which of the watercolours in the house this means? The pictures may have financial value; they may have a greater sentimental value. Fertile ground for a dispute.
WHAT CAN BE DONE?In most situations the twin answers are ‘clarity and communication’. Good record-keeping and identification are vital, and may be a sufficient solution. Adding labels on the back or base may help where possible, though this should only be undertaken with professional advice if there is any risk of damage. If items cannot be labelled, then trustees may want a regular review and clarification in person with the beneficiary of the trust. Where high values or a specific difficulty is present (a dysfunctional relationship for example), trustees may want to consider registering with the Art Loss Register in the way James Ratcliffe outlines in the next article.
Our art and cultural property group integrates expertise from across the firm – trust, private
Susan Johnson (Co-head of Art and Cultural Property Group)E [email protected] +44 (0)20 7783 3539
Hugo Smith (Co-head of Art and Cultural Property Group)E [email protected] +44 (0)20 7783 3698
...WITH GOODWILL ON ALL SIDES PROBLEMS CAN SOMETIMES BE SETTLED AMICABLY, BUT SOMETIMES THEY CAN END UP WITH LITIGATION...
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MORE THAN MEETS THE EYEMost of those who acquire works of art are happy to enjoy them for their aesthetic value. However, beyond that visual appeal there can lie hidden histories that may add interest and value, or cause all kinds of trouble.
As a result the owners of many collections, whether held in trust or in private hands, are starting to take increasingly seriously the question of researching the provenance, or ownership history, of the artworks they already hold, just as much as their acquisitions.
On the plus side, researching the provenance of artworks can provide support for authenticity, or valuable links to historic figures. On the other hand, at the Art Loss Register we work with trusts and private or corporate collections to review provenance in order to identify whether there are any issues that need to be addressed.
Using our database and other resources, our research into the past of a picture can identify that it was once stolen or even that it was looted by the Nazis or part of a forced sale during the period 1933-45. Both can cause significant problems for an owner. There
is the obvious risk that a claim will be revealed that forces them to give up the picture, or prevents a future sale; but for those with significant collections, and the wealth to support them, it is often the reputational risk that they face in holding or selling such art that is of more concern. Who wants to be named as holding a stolen picture, even if they have acquired legal title to it, let alone Nazi looted art?
client, tax, litigation, real estate, commercial and intellectual property. The group advises private individuals (be they collectors, philanthropists,
artists, authors or other creative individuals as well as their Executors and Trustees); charities and not for profits; museums, galleries, and
national art institutions; partnerships, corporate entities and online businesses operating in the arts, music industry and entertainment sectors.
James Ratcliffe (General Counsel and Director of Recoveries at the Art Loss Register)W www.artloss.comE [email protected] +44 (0)20 7841 5780
Attributed to Valentin de Boulogne (1591-1632) Concert with four people and a drinker Oil on canvas, 103 x 148cm
This large painting was stolen in Rome in 1994. Details were logged with the Art Loss Register and it was identified and returned to Italy in 2016.
...WHO WANTS TO BE NAMED AS HOLDING A STOLEN PICTURE, EVEN IF THEY HAVE ACQUIRED LEGAL TITLE TO IT...
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DO I REALLY HAVE TO PAY STAMP DUTY AT 15% ON MY NEW COUNTRY HOUSE?The top rate of SDLT (Stamp Duty Land Tax, often referred to as Stamp Duty) rose to 12% for residential property in March 2016, with an additional 3% if the purchaser already owns another residential property.
This produces a hefty 15%. If, however, a proper analysis of the facts shows that ‘Mixed Use’ can be identified, then this rate will reduce to a relatively benign 5% payable on the whole of the property.
In order to claim that SDLT is payable at this reduced rate, some part of the property in question must be ‘non-residential’. ‘Residential Property’ is, in essence, defined as a building that is used (or suitable for use) as a dwelling and its garden, grounds and outbuildings. There is nothing in the legislation imposing any other requirements for property to be non-residential, such as commercial use – although clearly this has evidential value. Any claim to pay tax at the mixed use rate relies on the factual position and situation of the property on the day of completion.
Examples of non-residential property may include commercial property (such as shops or offices), agricultural
land, forests, or land that is subject to commercial or agricultural occupancies. Everything depends upon careful analysis of the facts on the ground in the light of the precise definition of ‘residential property’.
If you believe that you are entitled to pay SDLT at the mixed use rate, it may be worth making a voluntary disclosure to HMRC setting out the justification of the claim. This
Henry Cecil (Partner)E [email protected] +44 (0)20 7783 3612
Patrick Lynam (Senior Associate)E [email protected] +44 (0)20 7783 3765
...IN ORDER TO CLAIM THAT SDLT IS PAYABLE AT THIS REDUCED RATE, SOME PART OF THE PROPERTY IN QUESTION MUST BE ‘NON-RESIDENTIAL’...
Such research into existing collections often takes place on inheritance, as sadly that is the moment when the driving force behind the collection is no longer with us and the artworks themselves often begin to be assessed as much for their financial value as anything else.
For trustees in particular, another area of risk that increasing numbers are looking to minimise is in protecting artworks that are held in trust yet in the hands of a beneficiary. It is not unheard of for such beneficiaries to fail to realise that the pictures on their walls are not theirs to do what they will with, or worse.
We are registering trusts’ interests in such pictures on our database so that if they appear on the market the trustees are able to intervene and prevent a sale.
Looking away from the picture and towards its history can sometimes be far more revealing than you might think.
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means that HMRC cannot apply higher financial penalties even if they subsequently argue that the higher rate applies.
Another angle that may help reduce the impact of the SDLT bill is to check whether Multiple Dwellings Relief for SDLT applies – where the property comprises of a main house and, say, further additional cottages. This relief allows a buyer to apply SDLT to the
mean value of the dwellings they have purchased, as opposed to paying the SDLT on the actual cumulative value of each dwelling.
Often, when buying a country estate, both mixed-use and multiple dwellings relief are in principle available. As only one rate can be applied, careful calculations and analysis will be needed to identify the lower of the two potential tax exposures.
BoMaD – INHERITANCE COMING EARLY?It is a sign of the times that many parents are passing an inheritance to their children early to help the children on to the property ladder. The media now use the term ‘BoMaD’ – the Bank of Mum and Dad.
A recent report by Legal and General, in association with the Centre for Economics and Business Research, has suggested that BoMaD contributed £5 billion in 2016 to property purchases totalling £77 billion overall. This made BoMaD the equivalent of a top ten lender.
There are a range of options available to parents wishing to help their children, each with practical and taxation consequences.
If you do not have capital to help with a loan or gift, it may unlock a better mortgage deal for your child if you were able to act as guarantor, though the obvious risk is that you could be liable for repayments if your child defaults.
You may have sufficient funds to provide the child with a gift. A gift of cash will not prompt an immediate inheritance tax (IHT) cost, but raising funds from other sources such as an investment portfolio could trigger a capital gains tax (CGT)
charge. If you survive seven years from the date of the gift, the value falls out of your estate for IHT purposes.
Some parents might consider raising cash for a gift by mortgaging an existing property of their own. We have found some lenders to be inflexible on this due to age, failing to consider the parent’s individual circumstances such as income, savings or the loan to value ratio on the property being mortgaged.
Alternatively, you could make a loan and take a charge over the property as security. The value of the loan remains in your estate but the capital growth in the property would accrue to your child. The loan can later be released as a gift if you wish.
If mortgage finance is being used by your child as well as a loan from you, we find that in practice some lenders will not lend. Others will lend but will require a first charge over the property, so that they have first priority on any sale proceeds if
Hema Anand (Partner)E [email protected] +44 (0)20 7783 3567
Owen Byrne (Senior Associate)E [email protected] +44 (0)20 7783 3721
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there was any default in repaying the mortgage.
You may consider buying a property for your child to live in and later gifting it or a percentage. Whilst control of the property would rest with you, you would face an additional 3% stamp duty on the purchase price and higher CGT on a disposal (by sale or
gifting) as it is not your principal residence.
Another aspect to keep under review is how any lifetime provision relates to the shares of your estate children might receive under your Will.
There are many possibilities and unless good advice is taken it is too often not made sufficiently clear beforehand
exactly which of the arrangements is being entered into, and the position is not properly protected if the house is to be shared with a partner or friends. It is vital that the legal position is fully documented in order to secure BoMaD’s interests and to allow all parties to know where they stand.
...TRUSTS MUST PROVIDE CERTAIN INFORMATION SUCH AS THE NAMES OF THE TRUSTEES AND SETTLOR...
GLOBAL TRANSPARENCY AND TRUSTSThe drive towards global transparency to tackle terrorism, money laundering and tax evasion moves forward increasingly quickly.
Whilst the fight against these activities is to be welcomed, what is perhaps less welcome is the compliance burden which trustees now face.
As reported by Helen Ratcliffe in our last issue of Individual Matters this drive has resulted in recent years in many new disclosure initiatives which affect trusts including FATCA, trust reporting for trusts with a French connection, and PSC Registers. All this has resulted in a plethora of acronyms!
Here we look at two further developments which impact on trusts: the need to obtain an LEI (which gives us yet another
acronym), and the implementation of the new Trust Register with HMRC.
In order to enable the London Stock Exchange to verify the source of funds entering the market, from 3 January 2018 entities (including trusts) must have a Legal Entity Identifier (LEI) in place or they will not be able to buy, sell or transfer listed shares. In order to obtain an LEI, trusts must provide certain information such as the names of the trustees and settlor. There is an initial application fee of £115 plus VAT. The LEI must be renewed each year and any changes noted for an annual renewal fee of (currently) £70 plus VAT. Bare trusts do not have to obtain an LEI.
Many investment managers are offering to provide this service for their clients and this is likely to be the easiest option for many, but trustees should liaise with them regarding the information that is to be provided.
In order to meet its obligations under the fourth Anti-Money
Carolyn O’Sullivan (Consultant)E [email protected] +44 (0)20 7783 3661
Hamish Frost (Senior Trust Manager)E [email protected] +44 (0)20 7783 3683
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Laundering Directive the UK has introduced an online Trust Register. Trusts with a ‘UK tax consequence’ during a tax year will need to be registered. Trustees are now obliged to gather information to identify the settlor, the trustees, the protector (if any) and the beneficiaries and provide this to HMRC. This is not a ‘one off’ event. If there is a change of
trustee for example, the Register will need to be updated.
There have been delays in its implementation, but the current timetable is that existing trusts must register by 31 January 2018.
At the time of writing, there are still many outstanding questions on how exactly trustees must comply with
these obligations. The professional bodies are seeking clarification on these and it is hoped that more detailed guidance from HMRC will be forthcoming.
Our highly experienced trust management team will be able to assist if you have any queries about obtaining an LEI or the new online Trust Register.
INTERNATIONAL OWNERSHIP OF UK PROPERTY BLOG You can remain up to date with all things international by subscribing to our International Owners of UK Property blog, run by partner, Matt Braithwaite.
Now in its fourth year, the blog has become a popular go-to resource for clients and professional contacts to keep up to date with not only the myriad of changes around the taxation of residential property owners, particularly for those from outside the UK, but also
the wider non dom changes which have had a less than smooth passage onto the statute books since their proposal back in the summer of 2015. To subscribe to the blog please visit our website or email [email protected]
Matthew Braithwaite (Partner)E [email protected] +44 (0)20 7783 3421
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SWISS CONNECTIONSWith an established UK-Swiss client base and a third of global private wealth under management there, Switzerland remains a key jurisdiction for us.
Working with colleagues across the firm, including French and German speakers, we have long been advising clients with Swiss connections on their cross-border tax and succession planning and have provided fiduciary and trust advice to families and institutions. As English lawyers we cannot advise on Swiss law, but we have a strong network of Swiss advisers, and our role is often to coordinate matters between the two jurisdictions.
The recent reforms to the taxation of non-UK domiciled individuals have necessitated a review of a number of clients’ domicile positions, having regard to their existing and historic international connections, as their places of residence and intentions have changed. For one client who was proposing to move to the UK from Switzerland, we needed to go as far back as the early nineteenth century to construct the requisite chronology of family events
and movements. This mattered because the client could then be confident that he was non-UK domiciled and, on becoming UK-resident, could claim the remittance basis of taxation for UK income and capital gains tax purposes (only available to UK-resident, non-UK domiciled individuals).
Other cases have involved clients making a lifestyle choice and moving from the UK to Switzerland. They have
Judith Millar (Partner)E [email protected] +44 (0)20 7783 3816
Lewis Edwards (Senior Associate)E [email protected] +44 (0)20 7783 3643
...WE HAVE LONG BEEN ADVISING CLIENTS WITH SWISS CONNECTIONS ON THEIR CROSS-BORDER TAX AND SUCCESSION PLANNING...
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WHEN WILL THE DUST SETTLE ON THE NON DOM CHANGES?The proposed changes to the legislation affecting those individuals who are resident in the UK but who retain a non-UK domicile (non doms) are having a long and somewhat chequered journey to the statute book.
Originally announced in outline by the then Chancellor, George Osborne, in July 2015, with a start date of 6 April 2017, the proposals have been delayed by political storms (the EU referendum and the May 2017 General Election) and by the sheer time needed to prepare the draft legislation. Such draft legislation as was included in the Finance (No 2) Bill 2017 was dropped in April 2017. Then on 13 July 2017 it was announced that the dropped proposals would be reintroduced in a Finance Bill in the autumn and the other planned changes would be introduced later in the year. In quick succession a new Finance Bill was published on 8 September 2017 and a policy paper and draft clauses were published on 13 September 2017.
There are three significant elements to the changes. The first element is that with effect from 6 April 2017 inheritance tax (IHT) applies to shares in offshore companies and
partnerships holding UK residential property, and is chargeable on the shareholder or partner be it a trust or individual. The policy driver is to encourage the removal of UK property from corporate ownership by taking the IHT advantage away, and indeed the period leading up to 5 April 2017 saw the ‘de-enveloping’ of property on a much larger scale than hitherto. The proposals also apply IHT to loan creditors and those providing guarantees, collateral or security for loans in connection with such UK residential property interests.
The second element is to expand the deemed domicile test which has long existed for IHT into income tax and capital gains tax and to use one common period (broadly 15 years) for all three taxes, again with effect from 5 April 2017. At the same time, a subset of the non doms, formerly domiciled residents (FDRs), were singled out for particularly harsh treatment.
Helen Ratcliffe (Co-head of the Private Wealth International Team)E [email protected] +44 (0)20 7783 3661
required advice on the number of days it is possible for a leaver to spend in the UK in these circumstances, as well as advice from Swiss lawyers on the availability of the ‘forfait’ basis of taxation (ie a Swiss taxation regime based on an individual’s expenditure rather than income). For those travelling in the opposite direction from Switzerland to the UK, our clients have included nationals from outside
the European Economic Area and our immigration law specialists have advised on visa requirements.
Other work with a Swiss element has included advising on tax disclosures, investigations and cross-border tax reporting (eg the Common Reporting Standard, the Foreign Account Tax Compliance Act and compliance regimes such as the EU Fourth Anti-Money
Laundering Directive). On 1 January 2017 Switzerland became one of the first jurisdictions to implement the new Automatic Exchange of Information standard, and it considers itself to be at the forefront of enhanced cooperation between tax authorities. We therefore anticipate, and are well-placed to meet, demand from new clients for tax compliance and regulatory advice.
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TEAM NEWSIt is a great pleasure to be able to report a healthy clutch both of new arrivals and of promotions from within the team.
We are delighted that Lara Mardell has joined us as a senior associate. She has most recently been working in Hong Kong and will be part of our international advisory team.
We have also welcomed both Victoria Salter-Galbraith as a
solicitor in our flourishing and always-busy agricultural estates and rural property team, and Alexandra Parris who is newly qualified and will initially gain experience in all aspects of private client work.
The individual who was born in the UK with a UK domicile of origin and who becomes resident in the UK again will be treated as domiciled for all tax purposes straightaway except with regard to IHT where there is a two year deferral. Nor are FDRs eligible for any of the reliefs.
For the non doms who become deemed domiciled on 6 April 2017, there is a silver lining – the ability to rebase assets held at that date and thus wipe out uncrystallised gains (but not any of the income or gains which funded the acquisition of a bought asset). And for all non doms who have been a remittance basis user in at least one year since 2008/9 there is a two year window to 5 April 2019 to
cleanse mixed funds in bank accounts. Some valuable time has been lost on this through the legislative indecision.
The third element which is very much work in progress is the proposed changes to trusts, both the ones to give protections for trusts set up by non doms when they become deemed doms and the changes to counter the perceived abuses in offshore trusts.
It has been a challenging period for non doms, their trustees and their advisers, and it will continue to be so. How UK property is held is a difficult technical area, and the advice for non doms in terms of compliance, wealth planning and access to trusts will need careful consideration.
...THERE IS A SILVER LINING FOR SOME – THE ABILITY TO REBASE ASSETS HELD AT 6 APRIL 2017 AND THUS WIPE OUT UNCRYSTALLISED GAINS...
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Carolyn O’Sullivan, one of the team’s professional support lawyers, has been promoted to consultant.
Owen Byrne, Lewis Edwards and Patrick Lynam have all been promoted to senior associate, and Sabrina Underwood has been promoted to associate.
We were thrilled for Sabrina when she obtained a distinction in her STEP Diploma in Trusts and Estates. The Society of Trusts and Estates Practitioners is the global professional association for practitioners who specialise in family inheritance and succession planning. Sabrina has also featured in eprivateclient’s ‘Top 35 under 35’ private client practitioners for 2017.
Helen Ratcliffe, Judith Morris and Victoria Pursall are contributing authors to the STEP book A Practical Guide to Transfer of Trusteeships and take great satisfaction in the fact that this book, first published by STEP in 2007, has just released its third, revised,
edition. The work reviews the difficulties that can arise on the transfer of trusteeships, particularly in the negotiation of indemnities, and sets out a suggested approach including precedents contributed by the BDB team.
Awards and accolades have come thick and fast over the last year, with the firm winning the Solicitors Journal award for Private Client Team of the Year.
Amongst the recognition received by individual members of the team, Simon Weil was named as Philanthropist Advisor of the Year at the Spear’s Wealth Management Awards, Helen Ratcliffe was listed both as one of Legal Week’s Global Elite and as one of the Citywealth Top 20 Power Women and Liz Neale featured in eprivateclient’s ‘50 Most Influential’ list.
Geoff Kertesz, head of our Will and Trust Disputes Team, won a Citywealth Outstanding Individual of the Year award and was named as one of Legal Week’s 2017 Global Elite.
Meanwhile Matt Braithwaite has been nominated for Inspirational Individual of the Year in the Citywealth Future Leaders awards (results not announced until November), and he and Lewis Edwards won Partner and Associate of the Year, respectively, at the Citywealth awards last year.
In addition Geoff, Matt and Lewis are all included in the Citywealth ‘Future Leaders 100’ list 2017.
Helen Ratcliffe | Owen Byrne | Liz Neale | Simon Weil | Sabrina Underwood | Patrick Lynam | Lewis Edwards
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