Monthly Archives: November 2017

Will Meghan join the queue at the new US Embassy?

It is probably right that, patriotic as she might be, Meghan Markle will join the increasing numbers of US citizens forking out the $2,350 fee to give up US citizenship and escape the requirement to fork out more on annual US tax reporting (and also ease their ability to deal with banks in the places they may be living). I am also sure the UK government will do whatever is necessary to bend the normal rules and award Meghan immediate British citizenship following her marriage to Prince Harry. Even if Meghan decides to keep her US citizenship (what if the marriage doesn’t work out?), I am sure the Royal family’s wealth can be insulated from her personal position, meaning it does not need to be disclosed to the US authorities, but this may not be so easy for any future children.

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Christmas has come early for first time buyers!

At today’s budget, Chancellor Philip Hammond announced that stamp duty will be abolished for first time buyers where the home’s value is up to £300,000. In more expensive areas (such as London), where a home is worth up to £500,000, the first £300,000 will be SDLT-free. 

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Keep Britain Tidy

Philip Hammond’s Budget of Autumn 2017 isn’t daring, it may disappoint some, it could be said to take boringness to an art form, but I think it does for the first time in many years contain a vision about the country which can be seen to be shaping the tax announcements. Other than for the fortunate few super rich, UK Budgets and Autumn Statements have been increasingly boring, more memorable for cock ups than any great policy announcement. There has been a growing sense that in the field of personal taxation, tax policy is dead. Chancellors haven’t had any overriding vision guiding and shaping the tax system other perhaps than a consensus that the least well-off should not be burdened by tax. In the main, personal tax policy has been a mess created by a stealth tax here, a raid on the wealthy there, layers of anti-avoidance legislation and investment in compliance. With each passing year it has had less and less of an intelligible overall design and coherence.I think this Budget does contain measures which are consistent with a coherent vision of the country and does suggest the Chancellor believes that tax policy has a role to play in shaping society. The centrepiece of this Budget is undoubtedly the pledge to build 300,000 new homes a year, alongside an SDLT break for first-time buyers, and a promise of extra funding for the NHS. There are a smattering of measures which represent investment in a modern green digital economy. And what all this represents is a small “c” conservative vision of the country. A land of family homes in leafy suburbs and what’s more a freeze on fuel duty and a freeze on alcohol duty so we can enjoy our cars and a Peroni or glass of chardonnay (preferably not at the same time).There are rail cards for millennials because before you graduate to proper motorised family living you need to use the train. Foreigners will be taxed more and tax avoiders and tax evaders will continue to be pursued. As I read through the announcements and thought of what this Budget represents, what came to mind was John Major’s famous description of the UK as “the country of long shadows on county grounds, warm beer, invincible green suburbs, dog lovers and pools fillers and, as George Orwell said, ‘Old maids bicycling to holy communion through the morning mist’”. This feels a lot like the country of my childhood or slightly earlier, pre-Thatcherite, maybe public-minded, possibly wholesome, not very international. The land of Postman Pat.Philip Hammond may have been surprisingly politically astute with this Budget, crafting something which is both a non-event and makes people feel a slight glow inside, like Major’s warm beer. I find it reassuring that there is some sign of direction in tax policy. But if the Chancellor gets to deliver another Budget I think he needs to think harder about what that direction should be, and whether he can take our progress up a gear or two, and how a really imaginative tax policy could assist with that. In 1993, John Major was delivering a pro-European speech but reassuring his audience that traditional English ways would continue unchanged. Philip Hammond, one of the great Remainers of this Government, is looking at Brexit Britain and he is faced with forecasts of feeble growth. Unless something dramatic changes, the beautiful new green suburbs he builds are going to be eerily quiet.

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Be careful what you wish for

A significant amount of tomorrow’s UK Budget is likely to be devoted to addressing the housing crisis. This may include a stamp duty break of some sort for first time buyers. However the mutterings in the property industry about a broader reduction in SDLT are surely wishful thinking and if this lobbying did one day result in the current SDLT regime coming crashing down then it would probably be replaced by an even greater bogeyman of the rich, a wealth tax. Even more likely is that the Government will keep SDLT and introduce a wealth tax. In the private wealth industry our firms and our professional bodies are increasingly keen to be seen as influential and agenda setting, but on which clients’ behalf are we lobbying and what are the consequences? More often than not they are unintended. Our time is better spent helping clients make difficult choices. More and more often I come across elderly clients who find too much of their wealth has become tied up in their main home and/or other properties. This means they lack the liquidity to properly provide for themselves or pass their wealth to their children in a tax efficient manner. It was said in a recent report that SDLT is a major barrier to older house-owners down-sizing. They are discouraged from moving to a smaller or at least less valuable property by the SDLT cost of acquiring the new property. This may be the case but taking everything into account is not rational, and rather than encouraging the false hope that the SDLT regime will change we should help clients make wise decisions within the regime which exists. 

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Tribunal to consider employment status of former GB Olympian Jess Varnish

At a Preliminary Hearing in April 2018 the Employment Tribunal will determine whether Jess Varnish, former GB Olympian, is an employee of UK Sport & British Cycling, and therefore entitled to bring claims of sex discrimination, detriment for whistleblowing, victimisation and unfair dismissal.This is a further example of where employee status is being challenged in the tribunal, with potentially huge ramifications.

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Special treatment – how can I get a “quickie divorce” like Billie?

Pretty much every celebrity divorce story talks about their “quickie divorce”, granted in just 50 seconds. How can it be that celebrities can fast-track their way through the process when everyone else has to slog it out for months or years?Fortunately, at Collyer Bristow we’re used to doing divorces for the rich and the famous, so we know all the tricks to get you on that fast train to separation, oh yes we can!*********And there could end the sales pitch, except unlike the Mail we’re not here to wow or mislead you. Today, we’re myth-busting. Oh yes.And the reality is this: the “quickie” process is the standard procedure used in all undefended cases, which make up 98% of divorces.98%!So pretty much anyone you know who is divorced had a quickie divorce. Not so superstar after all. In fact, the only time you don’t get to have a quickie divorce is when the respondent disputes the divorce (or the evidence relied on in support). That is almost never a fight worth having.So chin up if you’re getting divorced – it turns out you’re probably getting the Billie Piper service after all!

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Bank fraud compensation scheme floated

Concerns about authorised “push” payment frauds have prompted the Payment Services Regulator to suggest that a compensation scheme could be put in place next year. 

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Maternity Action reports huge increase in maternity discrimination

The charity Maternity Action has just published a report on pregnant women and new mothers being at increased risk of redundancy.  The report quotes statistics that show that 77% of pregnant women and new mothers surveyed in 2016 complained of suffering discrimination.  This compared to 45% in a similar study from 2005.  So the problem seems to be getting worse, not better.Of course, it is already unlawful to make a woman redundant for reasons connected to maternity.  But legal claims can be difficult to pursue, so the report makes some recommendations of what more could be done to protect women.  Currently, employers must put women on maternity leave who are at risk of redundancy to the front of the queue for any suitable vacancies, without having to compete with other colleagues at risk (Regulation 10, Maternity and Parental Leave regulations 1999).  But this only applies during maternity leave.  Women who are pregnant, and those who have recently returned from maternity leave, do not get this advantage.  This is despite the fact that the statistics quoted in the report show that they are also very vulnerable to being made redundant.  The report suggest that, as an interim measure, Reg 10 protection could be extended to pregnant women and to those who have returned from maternity leave in the past 6 months.   However, the report concludes that this would be insufficient to tackle the problem.  It recommends the German model, where it is unlawful for employer to make women redundant at all while they are pregnant, on maternity leave, or have just returned to work.  There are only limited exceptions to this, such as where the business is closing.  It seems unlikely that the Government is going to opt for this German model.  But if the statistics around maternity discrimination keep getting worse, then the pressure to take action might becoming overwhelming.  In that case, extending Reg 10 protection would seem like a logical first step. A link to the full report: https://www.maternityaction.org.uk/wp-content/uploads/RedundancyReportFinal.compressed.pdf

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Crying wolf

All of us who work in finance and private wealth should be concerned about corruption and money-laundering still taking place in the industry. Most of us believe that promoting artificial avoidance schemes doesn’t do anyone any favours and some of us may even think the wealthy can afford to pay a little more tax! The problem with the BBC story is that it encourages moral panic based on superficial and ill-informed reporting. If cross border finance in itself is the evil then this doesn’t bode well for prosperity! The story about the Duchy of Lancaster in itself is ridiculous because the Duchy is under Government control, the investments were ultimately in UK businesses, they were structured through jurisdictions (the Cayman Islands and Bermuda) under indirect UK government control and with the Queen as head of state, and the Duchy and Queen have a unique tax status. As for Appleby, the leaks seem to have shown the firm in rather a good light, with a concern that structures were managed properly and due diligence processes adhered to. 

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The Boiling Frog and Sustainability

The big ‘S’ word, ‘sustainability’, is the new ‘it’ word in the lexicon of big business. It doesn’t matter why businesses are improving their sustainability practices so long as they are doing something about them. Companies who have made inroads in this area include Starbucks, Walmart, Disney, Gap and McDonalds. Boards have come to realise that sustainability efforts rather than hurt profits, drive them. As consumers, especially millennials, become more informed about environmental issues, fair trade and social justice, they expect the companies they give their custom to prioritise sustainability. They want to spend their money and feel that they are making a difference at the same time.  Initiatives by businesses to promote the big ‘S’ include partnering with those who are like minded to reinforce the message to customers, investing in research and development to change accepted practices, making sustainability part of business strategy as well as getting employees on board through active engagement. This will impact agreements businesses enter into and also the policies they write. Some may even create additional assets if they come up with innovations that are protectable as intellectual property. The current state of things reminds me of the story of the boiling frog. If a frog is put suddenly in boiling water, it will jump out but if the frog is put in tepid water which is then brought to a boil slowly, it will not sense the danger and will be cooked to death*. This parable may be used in two ways here – it acts as a warning to businesses that doing nothing to prioritise sustainability will leave them behind. Or, more optimistically, this way of thinking and doing will become the ‘new normal’ as sustainability becomes part of the DNA of all businesses. There is hope for the big ‘S’.*Apparently this is a myth as this is not the way that frogs actually behave.

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