Mon06262017

Last updateTue, 24 Feb 2015 5pm

Sarah Clune considers the timetable for the introduction of the regulator’s new powers under the Charities (Protection and Social Investment) Act 2016

The UK government published a timetable during the summer explaining when the different sections of the newly enacted Charities Act will come into effect in England and Wales. The Charities (Protection and Social Investment) Act 2016 (Commencement No 1 and Transitional Provision) Regulations 2016 were made on 27 July 2016.

Deborah Pennington and James Bromley give the lowdown on tax changes for private clients

UK residential property is a valuable asset, properties in London particularly so. Historically, the advantageous tax treatment available to both non-residents and non-domiciled clients holding UK residential property has only increased the attractiveness of this asset class for clients, whether it is for personal occupation or as part of a rental business.

Lisa Feng examines the implications of Swift v Ahmed [2015]

The case of Swift Advances Plc v Ahmed [2016] is an example of what was referred to by Norris J in the case as the ‘deed in the drawer’ phenomenon. This is the situation where a person (in this case, Mr Ahmed) appears to be the owner of a property on the land register but when enforcement proceedings are issued, a deed is produced and relied upon to show that the entire beneficial interest in the property is actually held on trust for someone else (in this case, for Mr Ahmed’s wife).

Gillian Christian highlights a landmark Isle of Man judgment that casts doubt on Pitt v Holt [2013]

In the first ever decision in the Isle of Man courts on the Hastings-Bass principle and on the law relating to equitable mistake following Pitt v Holt [2013], Deemster Doyle delivered a judgment that demonstrates clearly that UK and Isle of Man law are not one and the same, in a trusts case that explicitly recognises differences in approach and outcome between the two legal systems. The judgment has substantial implications for professional trustees, as well as for those who advise them, as it puts the onus on trustees to take tax advice or face claims for breach of duty, but gives comfort to settlors and beneficiaries who are keen to maintain the confidentiality of their family trust structures.

A new consultation document from HMRC has important ramifications for the practitioner. Geoffrey Shindler reports

August used to be known as ‘the silly season’ where nothing much happened in the world of politics, the major summer season in Britain for the socialites having ended and they had all fled to Tuscany or the South of France. All we used to be left with were shock horror stories about the sighting of the Loch Ness Monster and spiders leaping out of packs of bananas and devouring lower middle class housewives whole, or the good news about how students are becoming increasingly cleverer because they get better A level and GCSE results (although as we all know this is just a matter of where you choose to draw the line on the pyramid between A star, A and the rest).

Imogen Buchan-Smith provides an update on changes to the UK tax treatment of non-doms and their structures

The Budget of 8 July 2015 saw the announcement by the Chancellor of many proposed changes to the UK tax regime for non-UK domiciled individuals and the trust structures of which they are settlors and/or beneficiaries, with the intention that these changes will come into effect from 6 April 2017. The rationale behind the alteration of the existing tax regime is the equalisation of the tax treatment of three key categories of person – long-term-resident non-domiciled individuals, formerly UK-domiciled residents, and investors in the UK residential property market – with that of UK resident and domiciled individuals. The government, however, declared its intention that the measures that would be introduced would be ‘carefully targeted to address some unfairness in the current rules in a way that will not deter those [non-domiciled] individuals who might be considering a move to the UK’. Non-domiciled individuals planning to reside in the UK in the short and medium term would therefore not be affected by the new rules.

Patel v Mirza [2016] establishes a flexible approach towards the illegality defence. Gareth Keillor and Rosanna Pinker analyse the pros and cons

It has been established for almost 250 years that ‘no court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act’ (Holman v Johnson [1775]). However, the courts have been grappling ever since with the extent to which this maxim applies and precisely what it means. While public policy considerations have always underpinned this defence, the 1993 House of Lords decision in Tinsley v Milligan [1995] introduced a new ‘reliance test’, effectively putting to one side considerations of public policy and instead focusing on whether the claimant is required to rely on their illegality in order to establish their claim. The decision in Tinsley has been much criticised and has ushered in a prolonged period of uncertainty and division regarding the correct approach to the defence. Conflicting approaches by the Supreme Court in cases such as Allen v Hounga [2014] and Les Laboratoires Servier & Anor v Apotex Inc [2014] have left this area of law in a state of confusion and disarray, and created what has been described as a ‘schism’.

Peter Steen and Bethan Byrne consider firewall legislation and analyse the continued conflict with the English Family Division

The current buzzwords of the offshore worlds are ‘transparency’ and ‘accountability’. In that context, asset protection legislation, commonly known as ‘firewall’ legislation, can increasingly seem something of an anomaly. Firewall legislation seeks to defend and protect offshore trusts from attack – whether from creditors, spouses or heirs – and from pressure from the onshore world. Matters concerning trusts established in offshore jurisdictions are, instead, for the local court applying local law. The message from jurisdictions in which such legislation has been enacted is that local courts will not simply kowtow to orders made by onshore courts.