OCTOBER 2014 JERSEY
Reputation matters [ AMBER MELVILLE-BROWN AND TESSA LORIMER ]
NEGATIVE PUBLICITY HAS FALL-OUT. TAX PLANNING is now not so private. HMRC does not like schemes, nor do the media. The media may seem to take pleasure in destroying reputation. They have a commercial imperative in publishing material that may damage reputations. Blogs and tweeting spread stories more widely. The tax man needs to be treated with caution and respect. The privacy lawyer can help to preserve a reputation. The very successful client who participates in a tax scheme is a potential subject of media attention. It is better if he is well-prepared. Information is power; the privacy lawyer and tax adviser need to be well-informed. To respond to a media
An update on UK residential property [ CHARLES GOTHARD ]
HOLDING RESIDENTIAL property through a
non-UK company facilitated avoidance of inheritance tax on death and stamp duty land tax (SDLT) on sale. An annual tax on ‘enveloped’ property (ATED) was intended to discourage this avoidance. The ATED charge has brought in more tax than expected: this may indicate further changes. The charge applies to non-natural persons owning a dwelling of a value more than the specified amount – £1m from April 2015, £500,000 from 6 April 2016. Capital gains tax will apply to all non-residents after 6 April 2015, apparently unless personal property relief applies. The changes have been made piecemeal and are complicated. De-enveloping can be expensive and is made more difficult by the General Anti-Avoidance Rule and measures against
marketed schemes. There are traps for the unwary. The SDLT rules on ‘higher
threshold interests’ are badly drafted. This is particularly relevant where a country estate is to be purchased. There are strategies for
investment. There is no ‘one size fits all’ solution. The tendency is for the purchaser to buy personally with a substantial mortgage, taking insurance to cover inheritance tax liability. Parents may buy jointly with the children – avoiding the ‘reservation of benefit’ rules – with a governing agreement between them. Investment properties are not within the ATED regime. A non-UK company resident in the UK may be liable only to the 20% corporate tax and not the 28% capital gain tax. A foreign company may own the land and lease to a forming subsidiary.
De-enveloping can be expensive and is made more difficult by the General Anti-Avoidance Rule and measures against marketed schemes.
016
The ITPA Green Book 2016
www.itpa.org
storm, the client needs a media crisis team. A press statement needs to be prepared. It is also important to know when not to make a statement. An inaccurate or inappropriate statement can also be damaging. The publication of, for example, participation in a marketed scheme can cause adverse comment. So can inadequate internet security and conversation in public places. Untrue statements can be challenged, but less so true ones, unless they include personal and private material. It is not a good idea to fail to answer an unexpected media phone call. It is better to deal with the call when you are prepared. It is not wise to attempt to speak ‘off the record’ or to say “no comment”. It is better to request an email to know precisely what the media intends to say. An online audit can be useful. Mistakes need to be
It’s important to know when not to make a statement.
corrected; sometimes, a quick call can bring an apology and correction, if you have the right and respected relationship with the media. Anonymous allegations are also damaging. The client may want to give out corrective statements. The media love appeals in open court. International exchange of information is going to increase the likelihood of media attention.
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