In my 26 November 2015 blog, I wrote about the impact on trusts of the EU’s first draft of the Fourth Anti-Money Laundering Directive (4AMLD). It seemed that only if the trust generated ‘tax consequences’ would the trustees have to provide details about the trust to a central register, which would not be publicly available. However, a revised version of the draft 4AMLD was published by the European Commission on 5 July and it envisages public access to trust beneficial ownership information for certain trusts only. The coming into force of the 4AMLD is brought forward to 1 January 2017, from 26 June 2017.
Thursday, 14 July 2016
With the summer holiday season upon us, it’s time to dust down those dreams of owning a bolthole in your favourite part of the world, where summer means summer and the sky is always blue. It’s not uncommon for Brits to own assets outside the UK these days and not just the infamous holiday home in the sun. In acquiring assets abroad, though, the last thing usually considered is what happens to those assets on death and is an English Will any use in getting them sorted out?
Thursday, 30 June 2016
Brexit uncertainties may be giving fresh impetus to many UK resident non-UK domiciliaries who are thinking about their residency plans. However, for res non-doms, it’s important not to lose sight of another key tax change now on the horizon – the change in the Inheritance Tax (IHT) deemed domiciled rules.
Thursday, 16 June 2016
Second marriage spouses sometimes have Wills that do not leave their assets to their second spouse outright. This is particularly the case when there are children from the first marriage and the intention is to ensure that everyone – the second wife and the children from the first marriage – receive something. For some clients, this can be a hard balancing trick to get right but careless will drafting can make the situation a lot worse.
Thursday, 2 June 2016
In my last blog, I looked at automatic exchange of information regimes and this blog carries on the transparency theme but in the sphere of corporate transparency.
Britain is ‘having a transparency moment’, as some might say. Regular readers of this blog will know that Britain has already introduced a public register of beneficial ownership and control of UK companies and Limited Liability Partnerships (see my blog of 24 March 2016), being the first of the G20 countries to do so. However, it appears that matters will not stop there.
Thursday, 19 May 2016
As if FATCA wasn’t enough, UK trustees will have to get to grips with two new reporting regimes next year – the CRS and the European Directive on Administrative Cooperation, or DAC. The DAC is how the OECD’s Common Reporting Standard (CRS) will be implemented by the EU.
Thursday, 5 May 2016
April 2015 saw another radical overhaul of the taxation of UK pensions on death. Gone is the 55% tax charge on payment of a lump sum death benefit after death, if the pension member either died after their 75th birthday or died pre-75 having already entered into drawdown. Instead, pension payments from a money purchase pension can now be paid to the member’s nominated beneficiary in the form of either a lump sum, annuity or flexi-access drawdown and no 55% charge is payable at that time. The nominated beneficiary is taxed at their highest marginal rate of Income Tax in respect of any benefits received. In addition, the nominated beneficiary can pass on any remaining funds tax free on their death.
Many defined contribution private pension schemes are set up as trusts so that, on a pension member’s death, the pension trustees decide whom to pay any lump sum death benefit to. Members are encouraged to sign a letter of nomination – slightly misnamed as the letter is not binding on the pension trustees in any sense. The rules of certain pension schemes permit the lump sum benefit to be paid to a trust set up by a member in lifetime, often referred to as a spousal bypass trust. This is also, on its face, a misnomer because it is commonplace for the spouse to be a potential beneficiary of the trust, along with the children, and usually the intention was that the spouse would benefit from it during their lifetime.