Monthly Archives: July 2019

FCA publishes final rules on the SMCR

On Friday 26 July the FCA published its final rules on the Senior Managers and Certification Regime; the complete regulations on the extension of the SMCR to FCA solo-regulated firms. The final rules, published on the FCA website, reflect the …

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Changes to Collyer Bristow Management Board

Law firm Collyer Bristow has made changes to its Management Board following a Partnership election to appoint new departmental heads. Joining the Management Board are Michael Grace, previously Head of the Real Estate Litigation team and now Head of Real …

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Brexit -The impact on SMEs, Entrepreneurs and Investors

At our recent Brexited.London seminar, Henk Potts, Director of Global Investment Strategy for Barclays Private Bank gave us his insights on the current and post-Brexit developments on the UK and global markets. Here are some of the key points Henk …

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Office of Tax Simplification publishes recommendations to simplify inheritance tax

While these amendments do not go so far as to shake the foundations of the tax itself, nevertheless the proposals would require all practitioners to come to terms with the amendment of a number of rules that have stood firm …

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Should inheritance tax be simplified?

The Office of Tax Simplification (OTS) has published a number of recommendations for how inheritance tax (IHT) could be amended and simplified. While these amendments do not go so far as to shake the foundations of the tax itself, nevertheless the proposals would require all practitioners to come to terms with the amendment of a number of rules that have stood firm for decades.Some of the key proposals include:1. Reducing the current IHT period during which lifetime gifts are brought into account on death from 7 years down to 5 years and, at the same time, abolishing tapering relief on chargeable lifetime gifts.2. Replacing/reforming some existing lifetime IHT exemptions (such as the annual exemption, the exemption for gifts in consideration of marriage, and the exemption on normal expenditure out of income), with an overall personal gifts allowance.3. Removing the CGT uplift on assets that pass free from IHT due to an exemption. In effect that would mean that the recipient would receive the asset at the deceased’s base cost, akin to hold over relief.4. Making it so that death benefit payments from life insurance policies pass free from IHT without the need for the policies to be written into trust.It will remain to be seen whether any of these proposals are considered any further by the Law Commission or the Government. The Labour Party has already published a policy document suggesting further, more radical amendments to the UK tax code in general and so one suspects that the above proposals will only survive so long as the Conservative Party remains in power.

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British Airways facing record GDPR fine

The fine represents 1.5% of its 2017 worldwide turnover, and whilst below the maximin possible 4% fines represents the largest single fine handed down by the Information Commissioner’s Office (ICO). Patrick Wheeler, Partner and Head of Intellectual Property and Data …

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Protecting crypto consumers from themselves?

The Financial Conduct Authority (FCA) has proposed a ban on financial instruments linked to cryptocurrencies, warning that such products could cause huge losses for consumers unlikely to understand their risks or value. The FCA said products such as derivatives and …

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AI: It’s time to ExplAIn

The ICO and The Turing conducted public research to gather information about the views held on AI. The ICO has said that they are working on the project as they believe that AI presents ‘some of the biggest risks related …

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Overview of the UK Gig economy

The gig economy as a labour market is characterised by short-term contracts or freelance work rather than permanent jobs. It is very much a product of the IT revolution enabling agile working and alternative business models such as Uber or …

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Which parent died first and why does it matter?

Whilst the Evening Standard is correct that the law that is being relied on in this case is “little-used”, prudent Will-drafters should always take care to consider the impact of the commorientes rule on clients and, where possible, take advantage of the potential tax benefits.The commorientes rule determines the ownership of assets where two (or more) people die in circumstances where it is impossible to determine who died first, for example in a car accident or (as here) in an accident in the home. The rule states that the younger individual is deemed to have survived the elder individual and, consequently, the elder individual’s estate passes to the younger individual. However if it can be determined which individual died first, even if only by a single second, then the commorientes rule will not apply.There are several important consequences arising out of the application of the commorientes rule that practitioners should consider:Firstly, the rule only governs the law of succession and does not address any inheritance tax issues as, for inheritance tax purposes, couples are deemed to have died at the same time. Drafted correctly, a Will can allow the elder spouse’s estate to pass to the younger spouse and then on to the younger spouse’s beneficiaries completely free from inheritance tax. This is at the very least a thin, silver lining on what is otherwise a tragic event.Secondly, a survivorship clause may inadvertently override the commorientes rule, which would have the effect of disapplying the inheritance tax advantage above. The Will should allow for the younger spouse to inherit if they survive for a certain period (for example 30 days), but also if he or she survives under the commorientes rule.Finally, the commorientes rule applies to gifts in Wills and through the automatic provision of jointly-held property to the surviving joint owner. It does not however apply to inheritances under the intestacy rules if, for example, the deceased did not have a Will.This is yet another reason why individuals, and particularly spouses, are strongly encouraged to make Wills.

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