Thursday, 25 June 2015

The insider’s guide to English Pre-Nuptial Agreements

English pre-nups (PNAs) are now an important consideration for families intent on protecting the family wealth, thanks to the 2010 case of Radmacher v Granatino.  Whilst PNAs do not oust the jurisdiction of the English court to have the final say in the matter, they can be determinative when it comes to splitting up wealth in the event of a divorce, as long as they are freely entered into, with a proper understanding by both parties as to the implications of the agreement and make fair provision for each spouse. 


There is a lot of available information on what PNAs are but much less information on just who is making them and why.  I caught up with our family law partner, Teresa Cullen, to ask her some candid questions about PNAs.  I hope you will find the answers illuminating.

Thursday, 11 June 2015

Pre-Owned Assets Tax: the forgotten tax


Pre-Owned Assets Tax (POAT) was introduced in the Finance Act 2004.  Ten years is a long time but, when it comes to tax statute, ‘age cannot wither her’.  This tax has teeth and is capable of biting, not with a tax bill after death, like Inheritance Tax, but, worse, with an annual Income Tax charge that can be a very real drain on cash flow for the living.  What is this beast?  Read on.

Thursday, 28 May 2015

New CGT rules for non residents: what to do now


This is the first UK tax year in which non UK residents will be subject to Non Resident UK Capital Gains Tax (NRCGT) when disposing of their UK residential property to anyone other than their spouse/civil partner or to charity.  Non resident trustees and personal representatives pay NRCGT at 28% on taxable gains and individuals pay 18% or 28%, depending on their taxable UK income and other UK gains in the tax year in which the gain arises.  If non resident companies are not subject to Annual Tax on Enveloped Dwellings – CGT (ATED-CGT), which always takes precedence, they pay NRCGT at 20% instead.  Only closely held companies are affected by NRCGT.

Thursday, 14 May 2015

The Reluctant Will Maker


When you are surrounded by wills on a daily basis (as I am), it’s easy to forget that, for some of our clients, even the thought of making a will is a stressful business, to be avoided at all costs.  This was brought home to me recently when I met a couple of Family Office bankers.  They explained that some of their clients find the whole will making process a bit daunting.  The lawyer asks a lot of serious and scary questions, such as what should happen to the family business, when should the children inherit, who should be their guardians etc. etc. and then nothing gets done!  As a lawyer, this is exactly what I don’t want to see happening, as I know the profound family heartache and disruption that can arise if someone dies without a will (see my blog: ‘Dying without a will – the hard facts’ 3 July 2014; I’m afraid that might indeed scare you).

Thursday, 30 April 2015

Pension death benefits planning: a question of control

Before the recent pension changes were announced, it made sense, for Inheritance Tax (IHT) planning purposes, to request that any death benefits payable from a money purchase private pension on the pension scheme member’s death were paid into a separate trust (a ‘bypass trust’), usually for the benefit of the member’s spouse and family.  Structuring matters in this way would prevent what could sometimes be significant sums from being paid direct to the surviving spouse, with the potential for any unspent funds to be taxed at 40% IHT on the surviving spouse’s death.  On the other hand, by using the trust route, the spouse could still enjoy full access to the pension funds via loans made from the trust, which have the potential to be deductible for IHT purposes on the survivor’s death.

Thursday, 16 April 2015

Mixed domicile couples


Non-doms are in the news again, with one British political party wanting to scrap non-domiciled status if they are elected to be the next Government on 7 May.  This sort of headline reinforces the casual view that being a non-dom is always advantageous for UK tax purposes.  However, if you are part of a mixed domicile couple, where one of you is UK domiciled and the other isn’t, you might disagree.  Estate planning is not plain sailing for you.

Wednesday, 8 April 2015

ATED tips and traps

Apologies to all my regular Thursday readers but the electrical fire in Kingsway last week disrupted internet connectivity.  Here is last week's blog.  The next post is scheduled for Thursday 16 April.




Financially minded Brits will be focused on the impending end of the British income tax year.  Here in the office, we’re also focused on the start of another one – the 2015/2016 Annual Tax on Enveloped Dwellings (ATED) tax year begins on 1 April 2015 and, for UK residential properties valued for ATED purposes as worth £2 million or over, owned by ‘non-natural persons’ such as companies, the ATED tax returns and any tax due must be in by 30 April 2015.