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Trusts and Estates Law and Tax Journal: June 2014

Alexander Learmonth weighs up the latest edition of Risk and Negligence in Wills, Estates, and Trusts

Risk and Negligence in Wills, Estates, and Trusts

Miranda Allardice and Ruth Hughes consider the problem of provision for the adult child under s2 of I(PFD)A 1975

The decision as to quantum in Ilott v Mitson was handed down on the 3 March 2014. The purpose of this article is to assist private client practitioners who are engaged in drafting a will for the parent of independent, but poor, adult children and considering the impact of a claimant’s entitlement to state benefits on a claim under the 1975 Act.

The scope of the retainer is in question in Mehjoo v Harben Barker. Kate Rees-Doherty explores the implications

This case caused considerable concern among accountancy firms and other professionals in the summer of 2013 over the extent of their obligations to clients. It prompted numerous articles and commentary over the scope of professional advice. The concern arose from the High Court decision that the duties of the defendants – an accountancy firm – included advising the claimant of his likely non-domicile status which carried with it significant tax benefits, so there might be appropriate tax mitigation steps or schemes available to him and that he should consider consulting a non-domicile specialist. However, much to the relief of many professional advisers, the Court of Appeal has just reversed the decision. This has resolved the conflict for solicitors between the Solicitors Regulation Authority’s warning issued on 16 February 2012 not to become involved in schemes to reduce or eliminate clients’ SDLT liability, but can we all breathe a sigh of relief?

Withers LLP

Suzanne Todd and Luca Del Panta examine the future of pre-nups in the light of the Law Commission’s report

When, in October 2010, the Supreme Court handed down its judgment in Radmacher v Granatino [2010] dismissing the appeal of the husband, Nicolas Granatino, against the Court of Appeal’s decision which effectively upheld the terms of his prenuptial agreement with his much wealthier former wife, the German heiress Katrin Radmacher, her press release read:

Marilyn McKeever gives the lowdown on the Fourth Money Laundering Directive

Trustees these days could be forgiven for developing a persecution complex. It seems to be assumed, certainly by those who do not know any better, and sometimes by those who should, that the only reason for establishing a trust is to evade tax, launder money or worse. As a consequence, a rising tide of domestic legislation and international treaties is placing ever more burdensome disclosure obligations on trustees. While it is inevitable that some trusts (and some companies, foundations and other entities) may be used to conceal criminal activity, the vast majority of trusts are used for perfectly legitimate reasons such as family succession planning and tax mitigation. The vast majority of trustees, settlors and beneficiaries file their tax returns dutifully and pay their proper amount of tax.

Geoffrey Shindler finds the idea that HMRC is allowed access to bank accounts without a court order incompatible with our parliamentary democracy

Nobody likes paying taxes; nobody likes those who evade payment of their due tax liability. Somewhere in the middle of that spectrum lies civilisation. ‘Taxes are what we pay for a civilised society’, Compania General de Tabacos v Collector [1927] (at 100 per Holmes J). Taxes have been raised by the state since the dawn of time. Ancient Egypt had a tax structure; no doubt some Egyptians avoided the taxes levied, some of them illegally and so became evaders.

Pullan v Wilson clarifies what is reasonable and proper charging by the professional trustee. Aimee West and Tamasin Perkins investigate

The recent judgment in the matter of Pullan v Wilson [2014] is an important warning to professional trustees who charge for acting in that capacity and to trust beneficiaries. In the case His Honour Judge Hodge QC had to consider the reasonableness of the remuneration charged by a professional trustee to a number of family trusts and whether a beneficiary was debarred from raising a challenge if he had acquiesced to the rates charged.