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News in brief: May 2014

Seizing assets, avoiding tax and DoLs make the private client headlines

27 May 2014

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ASSET SEIZURE

HMRC has published details of its plan to seize funds from individuals' bank accounts without a court order and without any right of appeal. It expects to take an average of £5,800 from 17,000 people a year, half of whom will have cash assets of less than £20,000. The cross-party Commons Treasury committee said it had "considerable concern" about the chancellor's proposed debt collection powers.

GUERNSEY LLPs

Guernsey has expanded the range of structures available from the jurisdiction by introducing LLPs. The Limited Liability Partnerships (Guernsey) Law, 2013 was approved by the States of Guernsey in December 2013. It was given Royal Assent by the Privy Council in April and registered in the Royal Court of Guernsey on 12 May. The law will come into force with effect from 13 May.

TAX AVOIDANCE

Celebrities are fleeing aggressive tax avoidance schemes for fear of public exposure, according to reports. In May, a court ruled that a partnership in which Take That songwriter Gary Barlow had invested was a tax avoidance scheme, meaning he have to pay millions to HMRC. Barlow, along with bandmates Howard Donald and Mark Owen, and their manager, Jonathan Wild, put money in two music-industry investment schemes.

PERSONAL DATA

HMRC is drafting legislation that would allow it to release "anonymous" personal financial data on millions of taxpayers to private companies, researchers and public bodies. Nigel Green, founder and CEO of deVere Group, said the proposals were "very concerning" because of the risk of mistakes and the tax authority's history of errors.

LIBERTY DEPRIVATION

Sir James Munby has warned of the consequences of a "landmark" Supreme Court ruling on the rights of disabled people living in care facilities. The president of the Family Division of the High Court and president of the Court of Protection suggested that there would be financial implications and "immense burden" for local authorities and significant implications for the administration of justice following the Supreme Court ruling.

PENSION SCHEMES

The High Court, in Briggs v Gleeds, [2014] EWHC 1178 Ch, has refused to uphold the validity of a series of changes to a partnership's final salary pension scheme because the partners signatures on 20-year-old deeds of amendment had not been attested by witnesses. Although the facts of the case are unusual, the changes the employer sought to implement are ones that many other schemes will have made in recent years.

END-OF-LIFE CARE

Care given to people dying in hospital is "deeply concerning", according to doctors who have carried out a review of standards in England. The audit found only a fifth of hospitals provided specialist end-of-life care seven days a week - ten years after
this was recommended. Nearly half of trust boards had not discussed care of the dying in the previous year or conducted a formal audit, despite recommendations this be
carried out annually.

ASSISTED DYING

The Supreme Court has yet to produce a ruling on medically assisted suicide in response to challenges led by the widow of locked-in syndrome sufferer Tony Nicklinson, and Paul Lamb, who is paralysed from the neck down. Nine justices are considering claims that those severely incapacitated from seeking a "dignified and humane" death. The justices have still not produced a ruling and none is listed for the current legal term, which concludes at the end of May.

TAX REBATES

HMRC is rejecting taxpayers' claims for compound interest on rebates of their overpaid tax, despite the High Court's ruling for the taxpayer in Littlewoods Retail Ltd and others v The Commissioner for HMRC [2014] EWHC 868 (Ch). HMRC says the court's 28 March decision was based on 'exceptional' circumstances specific to Littlewoods, whom HMRC now owes £1.2bn in interest, subject to a pending appeal.

CAYMAN ISLANDS

A new bill for regulating charities in the Cayman Islands has been published for consultation. The Charities Bill 2014 is a revised version of the 2010 draft, with an amended definition of public benefit and relaxing some of the audit requirements. If it becomes law, it will not have an impact on those entities that are recognised as 'private charities' and for which the Cayman Islands Monetary Authority has regulatory responsibility.

TAX TRANSPARENCY

Some 47 countries, including Switzerland and Singapore, have formally agreed to the automatic exchange of tax information at the OECD's annual ministerial council meeting in Paris. The declaration obliges jurisdictions to obtain all client information from their financial institutions from 2017, and automatically copy it to the other signatories each year. The Swiss Federal Council's will only agree to tax transparency standards that have a 'truly global' nature, and that reciprocity in the exchange of tax data must be guaranteed.

CORPORATE TAX

A group of activist investors are calling on other Google shareholders to press the company to adopt a code of conduct on tax that would bring its corporate structures back in line with its 'Don't be evil' motto. Google paid £3.4m in tax in Britain in 2012 despite its UK revenues amounting to £3.2bn. Google is one of a number of US firms that, through ad hoc umbrella body the Digital Economy Group, has been aggressively lobbying OECD tax experts against targeting tech firms with new tax rules.

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