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Inform: Private Client
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I would like to begin by welcoming our new head of Contentious Trusts, Graeme Kleiner. Graeme joins us from Withers and will be a tremendous asset to our team and will enhance our reputation for high value contentious private client work. He has an outstanding track record and brings with him a wealth of experience in high value domestic and international trust and succession disputes. His appointment presents us with an exciting opportunity to continue to expand our capacity to undertake high quality international work.
On the tax and legal front, the Pre-Budget Report brought some significant announcements for trusts and offshore financial centres which will require careful consideration by taxpayers and their advisers and trustees. The issue of taxpayer residence has also hit the headlines again with judgments issued in the Gaines-Cooper appeal to the House of Lords, Grace and Abramovich. The cases are all significant and those taxpayers and their advisers who rely on being non-resident or not ordinarily resident should review their position in light of these cases.
Richard Kirby
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Pre-Budget Report: 45% tax, trusts attacked again!
As well as announcing a new 45% rate of income tax for individuals earning more than £150,000 from April 2011, the government have also increased the tax rate applicable to trusts from 40% to 45% from April 2011. In both cases of course this is subject to the Labour Government's re-election. This significance of this increase for trusts will depend on the type of trust, the source of its income and who receives or is entitled to receive the trust's income. Read more...
Pre-Budget Report: Offshore financial centres under review
Another announcement of significance in the Pre-Budget Report was the decision to review the "long term opportunities and challenges for the UK's crown dependencies and overseas territories as offshore financial centres". This would include the islands of Jersey, Guernsey and the Isle of Man, as well as Bermuda, the British Virgin Islands and the Cayman Islands. Read more...
Residence: Grace
For determining whether a taxpayer is resident in the UK for tax purposes, it has generally been accepted that a day count test applies: an individual who spends 183 days or more in the UK in a tax year is deemed to be UK resident. Furthermore, HMRC will regard an individual as UK ordinarily resident if he or she spends 91 days or more on average over a four year period.
However, the recent High Court decision in the case of HMRC v Grace illustrates that determining whether a taxpayer is resident in the UK for tax purposes may not be as straightforward as a simple day count test, and that other factors will be taken into account. Read more...
Residence: Abramovich
In the recent case of OJSC Oil Company v Roman Abramovich residency was considered in the context of jurisdiction as Mr Abramovich contested that he was not UK resident at the time of the issue of the claim form in the case. However, it was stated in the judgment that "residence for jurisdiction purposes but not resident for tax purposes is a distinction to be avoided if possible" and so this case is relevant when considering residency not only in the context of jurisdiction but also in the context of tax. Read more...
White v Withers & Anor
This case concerns use of confidential documents in divorce proceedings. The renowned chef, Marco Pierre White, recently failed to win damages from his ex-wife's divorce solicitors, Withers, in relation to their use of confidential documents during his recent divorce. White claimed that Withers had encouraged his wife to intercept or retain confidential letters and documents, or, at the very least, that they had aquiesced in her actions relating to the documents. Read more...
An obvious conflict for trustees
Conflicts are not always going to be easy to spot or immediately obvious but the trustee In the matter of the E,L,O v R Trusts (a recent Jersey Royal Court case) failed to heed a rather obvious conflict and, as a result of its delay in resigning, substantial costs were awarded against it. Read more...
If you would like to comment on any of these topics, please click here.
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Speechly Bircham LLP is a limited liability partnership registered in England and Wales (registered number OC321620) and is regulated by the Solicitors Regulation Authority. A list of members' names is open to inspection at our registered office, 6 New Street Square, London EC4A 3LX
This information is correct to the best of our knowledge and belief at the time of going to press. It is, however, written as a general guide, so we recommend that specific professional advice is sought before any action is taken.
Speechly Bircham LLP 6 New Street Square, London EC4A 3LX
Tel +44 (0)20 7427 6400 Fax +44 (0)20 7427 6600
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