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Yearly Archives: 2018
Why giving money to UKIP might give you a large tax bill
Aaron Banks attempted to use the European Convention on Human Rights to argue that HMRC was wrong to charge £163,000 in inheritance tax on certain donations he made to UKIP. Putting to one side the irony of a major backer of UKIP and Brexit using the ECHR to obtain a favourable tax position, the case brings up an interesting facet of the exemption from inheritance tax for donations to political parties. When an individual makes a gift, that gift will be chargeable to inheritance tax unless it benefits from a relief or exemption, for example the gift may fall within an individual’s annual exemption of £3,000 or their nil rate band, currently £325,000. There are several well-known exemptions, such as for gifts to spouses or to charities, however gifts to political parties may also benefit from a complete exemption for inheritance tax.In order for the donor to benefit, the recipient must pass the statutory test for a “qualifying political party”. This test is that, at the last general election prior to the donation, the party either had (1) two MPs elected to the House of Commons, or (2) one MP elected and the party received at least 150,000 votes nationally. At the time of the donation the party did indeed have two MPs, but these were both elected in by-elections following the 2010 general election. This means that UKIP did not satisfy the test and therefore the donation failed.Putting to one side the argument of whether it is correct that a political party should not qualify despite receiving almost 1,000,000 votes at that election, it is not for the First Tier Tribunal to override statute. It is a matter for Parliament to decide whether to update this law and therefore the Tribunal had no option but to side with HMRC.For what it is worth, based on the election data in 2010 Mr Banks could have benefited from the exemption had he given his donation instead to the SNP, the Green Party, Sinn Fein, the DUP or Plaid Cymru, all of whom satisfied one of the two tests for qualifying political parties despite receiving fewer votes overall than UKIP.
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The new Electronic Communications Code – round 1 goes to the Operators
The decision of the Upper Tribunal in Cornerstone Telecommunications Infrastructure Limited v the University of London (2018) permitted the operator to access, inspect and survey the landowner’s premises as a substantive right under paragraph 3(a) or 3(d) of the Electronic …
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Downsizing? You may have no choice.
Now is the time to invest in companies that make small furniture! The City of Westminster in the City Plan 2019- 2040 has suggested that new developments and conversions will (unless necessary to protect a heritage asset) not be allowed to provide units of greater than 150 sq m (1,615 sq ft) to ensure developments provide the number of homes required over the coming years in the area.Whilst this is above the nationally described space standards by a whole 12 sq m (129 sq ft), for a family home, this would hardly be palatial. The City of Westminster has pointed out that it is also 50% larger than the average size of a private market tenure home in Westminster, although presumably this figure includes the large number of pied-à-terres in the area.Without doubt something needs to be done to ensure there are enough decent quality properties at the correct price, however how many ‘average’ buyers could afford even a modestly sized property in Westminster, and will this solve the problem? This does seem like another situation where wealthy foreign buyers are being blamed for a property market that just simply doesn’t allow for affordable homes as everyone on the property ladder wants to pull the ladder up behind them and make money on their own home. Realistically, how many first-time buyers are pushed out of the market by each mansion built in prime residential London?Whilst it has less than most boroughs, Westminster still has brownfield sites suitable for redevelopment, which I would argue would be a good place to start to create a stock of new, and hopefully decently sized, properties.The plans are open to consultation so watch this (lack of) space!
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Commercial Court dismisses allegations of fraud in connection with forex “demo accounts”
In a highly critical Commercial Court judgment, Mr Justice Knowles has described two investment funds’ allegations of fraud against a forex trading firm as “an elaborate and expensive, unmeritorious attempt” to “throw off their responsibility onto the shoulders of the …
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Why you will no longer need to swear when visiting your solicitor
The Government has announced that, from the end of November, executors will no longer need to formally swear an oath before receiving the grant of probate – instead they will be able to make a ‘digital’ statement of truth. This …
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Tagged executor, oaths, probate
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Employment Update: The Real Living Wage
A rise in the real Living Wage was announced this week, with around 180,000 workers set to receive a pay boost as a result. The real Living Wage is a voluntary scheme that pays employees by reference to the real …
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Why you will no longer need to swear when visiting your solicitor
The Government has announced that, from the end of November, executors will no longer need to formally swear an oath before receiving the grant of probate – instead they will be able to make a ‘digital’ statement of truth. This move by the Government will be a welcome relief for executors nationwide, as the requirement that all executors must have their oath sworn in front of an independent solicitor is one of the more arduous aspects of the probate administration process.Coupled with this is the added benefit of being able to apply for probate online, rather than in paper form. This is all part of the Government’s move to make the probate process more modern and simpler.This is likely to be a welcome change for probate administration firms up and down the country. However the authorities are yet to release any guidance on how the new process will work and from when it will go live. It remains to be seen whether such a dramatic change will be plagued by the same technological problems which occurred with the introduction of the Trust Registration Service in 2017.
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How to make friends and influence people … and not get fined!
The Advertising Standards Agency (ASA), in collaboration with the Competition and Markets Authority (CMA) have recently published a new guide to outline the advertising rules which apply to social media ‘influencers’. This came following their investigation into social media advertising …
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Tagged advertising, asa, cap code, influencer marketing, influencers, influencers guide, social media
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(B)R you allowed Council Tax relief on a Holiday Let?
The Ministry of Housing, Communities and Local Government have opened a consultation into the ability for holiday lets to register for business rates, rather than Council Tax which has allowed over 45,000 properties to qualify for small business rate relief and therefore escape a charge completely.Properties are valued for business rates when owners declare their property is available to let as ‘holiday accommodation’ for 140 days or more in a year. There is currently no requirement for any evidence to be adduced as to the property actually being let by third parties, which, some argue, leaves the system open to abuse.A property registered for business rates, rather than Council Tax, may qualify for small business rate relief which means that no tax is due at all. Areas with significant numbers of holiday properties could therefore be missing out on significant income, despite the property owners using the local facilities.Since many councils removed Council Tax discounts for second properties it may be that people looked to business rates to reduce the expenditure on their holiday home. Anyone with a view on this should ensure they respond to the consultation before the January deadline.
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How to make friends and influence people … and not get fined!
The Advertising Standards Agency (ASA), in collaboration with the Competition and Markets Authority (CMA) have recently published a new guide to outline the advertising rules which apply to social media ‘influencers’. This came following their investigation into social media advertising in August 2018, after concerns that celebrities and social media ‘influencers’ do not properly declare when they have been paid or rewarded to promote services or products. Shahriar Coupal, Director of the Committee of Advertising Practice (CAP) said: “Responsible influencer marketing involves being upfront and clear with the audience, so people are not confused or misled and know when they’re being advertised to. The relationship between influencers and their followers relies on trust and authenticity, so transparency is in the interests of all parties. This guide on the standards will help influencers and brands stick to the rules by being upfront with their followers.”Social media is quickly becoming the most important platform for advertising. A recent survey showed that 70% of millennial consumers are influenced by the recommendations of their peers in buying decisions.Instagram is one of the most popular social media platforms for advertising, with 87% of marketers citing Instagram as the most important platform for their influencer marketing programs and this summer it reached a billion active monthly users. It can be a lucrative platform for those with a high volume of followers: celebrities such as Beyonce and Selena Gomez have been recorded as receiving $1 million and $550,000 per post respectively. Others have made a name for themselves through social media influencing alone, with the likes of Jen Selter and Zoella making $15,000 and $14,000 per post.Instagram is also one of the places where influencers have been seen to fall foul of advertising regulations. Over the last few years posts from Louise Thompson, Millie Macintosh, and Marnie Simpson have been subject to ASA action. There are lots of rules that could apply, but the ASA pays particular attention to the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (the CAP Code) and the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). What counts as an ad? Affiliate marketing – if the content you post promotes a product or service, especially if it contains a hyperlink to the product or service or a discount code with commission, that counts as advertising.Advertorial – if you work with a brand to create content and are paid in some way for doing so, this is an ad. There needs to be both payment and control for this to apply. Control is considered to be asserted if the influencer does not have complete freedom to do and or say whatever they want. This includes the brand having final editorial say over the content. What counts as being paid? Being ‘paid’ for this purpose can include receiving goods for free, it is not only a monetary reward. Similarly, any sort of profitable relationship with a brand, such as a being a paid ambassador, receiving gifts, products, trips etc. for free or in return for your services, constitutes a payment. What counts as prohibited content under the CPRs? using ‘editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial);falsely claiming or giving the impression that an individual is acting outside of their business purposes or falsely representing themselves as a consumer;failing to identify a commercial intent behind a social media post;and omitting or hiding ‘material’ information.What does not count as an ad under the CAP code?Posting content for a brand for no gain ie they control the content but you receive nothing in return;Receiving freebies and posting about them but the brand having no control over the content;Discount codes with no commission; orRecommending products or services which you have bought yourself and with no influence from the brand.Key things for influencers to remember:Ads should be recognisable as ads (section 2 CAP code) the code requires it to be ‘obvious’ and the ASA recommends using labels such as ‘ad’ ‘advertisement’ ‘advert’ etc. and notes that just ‘@’ mentioning the brand will not be sufficient;Advertisers must avoid misleading people (section 3 CAP code);Promotion marketing (eg competitions, and giveaways etc) are subject to additional regulations (section 8 CAP code); andPromoting some products may be subject to other rules e.g. food or supplements or age restrictions (for products like gambling or alcohol).The ASA and the CMA are by no means discouraging advertising by influencers or on social media. It is simply important to ensure that any advertising complies with the regulations already in force in the UK. The key is transparency. Consumers should be able to recognise that what they are viewing is advertising and it is the duty of both the poster and the brand to make sure this is clear.
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