Legal News

The court rejected the Upper Tribunal ( UT) and affirmed a First-tier Tribunal ( FTT) ruling which concluded that the woman, identified in the judgment as P, was not a UK resident even though she spent more than 45 days here in the relevant tax year, the benchmark applied for the UK statutory residence test. It accepted the FTT’s assessment that six of the fifty days she was in the UK arose from ‘exceptional circumstances’, and therefore should be disregarded. Excluding those six days from the calculation, the court held HMRC accordingly could not levy tax on £8m of dividend income. The woman relocated from the UK to Ireland in April 2015, shortly ahead of the 2015–16 tax year commencing, while her husband continued to reside in their family home near Manchester......

The court rejected the Upper Tribunal ( UT)’s stance and affirmed a First-tier Tribunal ( FTT) ruling that concluded the woman, identified in the judgment as P, was not UK-resident, even though she spent more than 45 days here in the relevant tax year, the benchmark for the test at issue in the case. It accepted the FTT’s conclusion that 6 of the 50 days she was in the UK arose from ‘exceptional circumstances’. Those six days are excluded from the count, the court held, so HMRC cannot levy tax on the £8m of dividends for that tax year. The woman relocated from the UK to Ireland in April 2015, shortly before the outset of the 2015–16 tax year, while her husband continued still to reside in their family home near Manchester......

In this issue: Trusts Court of Protection UK taxes for Private Client HMRC Manuals updates Tax avoidance, evasion and non-compliance Contentious trusts and estates International Question of the week Additional Private Client updates this week Daily and weekly news alerts Lex Talk®Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Latest Q& As Useful information Trusts Court of Appeal holds that sale of loan assets from insolvent Jersey trusts was void as an improper exercise of a fiduciary power ( FS Capital Ltd v Adams) Private Client analysis: The Court of Appeal determined that the disposal of loan assets from three insolvent Jersey trusts was invalid because the trustees had exercised a fiduciary power improperly. The ruling underscores the need to evidence particular features of the...

The Public Accounts Committee, tasked with assessing whether government plans deliver value for money, said in a newly released report that crucial measures to deter evasion are missing. It warned that overseas traders can still falsely sign up as sellers established in Britain because of lax checks by HMRC and Companies House. The committee said the fresh powers given to Companies House—the official registrar of businesses—under the Economic Crime and Corporate Transparency Act 2023 ( ECCTA 2023) are a move in the right direction, but they will not be fully in place until the end of 2026. HMRC should make sure it works with Companies House and the Insolvency Service, the body tasked with tackling corporate abuse, to gauge how the level of fraud influences the tax gap. In the committee’s view, the slow roll-out and the absence of...

See Q& A: D died without a will, and his widow together with his two daughters executed a deed of variation establishing a discretionary trust. How should the trust be treated for both income tax and capital gains tax if, thereafter, the trustees later confer upon the widow a revocable life interest?......

Hanson v Coleman and another [2025] EWHC 116 ( Ch) What was the background? ...

Ashley v HMRC [2025] EWHC 134 ( KB) The enquiry concerned the claimant’s sales of properties to special purpose vehicles owned by a company that employed him. HMRC issued closure notices with a charge to tax, asserting the transfers were overvalued and that a taxable benefit arose to the claimant under ITEPA 2003, s 201. The High Court reviewed a series of questions about the SAR, namely: as follows Whether the SAR was confined to data handled by WMBC, or extended to information processed more broadly within HMRC, in particular by the Valuation Office Agency ( VOA) in this matter, for the purposes of responding to the request (the ‘ Scope of the SAR Issue’) Whether material concerning HMRC’s evaluation of the claimant’s tax position during an enquiry constitutes ‘personal data’ for UK GDPR purposes, in whole or in part (the ‘ Personal Data...

AAA Oriental Ltd v HMRC [2025] UKFTT 69 ( TC) In March 2023, HMRC opened a compliance review of the company’s books and records for 7 March 2022 to 8 March 2023 to confirm it was meeting its duties as an employer. In October 2023, HMRC served a Schedule 36 taxpayer information notice. The material sought encompassed mileage logs, directors’ loan account details, invoices (including those for company credit card spending), a medical insurance policy, and fuel card statements. The company lodged an appeal. The tribunal’s first question concerned the company’s stance that paragraph 21 of Schedule 36 barred the notice. That provision prevents HMRC from issuing a notice to check a company’s corporation tax position where the company has already filed a tax return, unless one of Conditions A to E is satisfied as claimed......

See Q& A: A and B, a married couple, are on the register as owners of a property as tenants in common. A has passed away and named their adult child ( C) to act as executor. B now lacks capacity, and C also serves as B’s attorney under a registered enduring power of attorney. Can C appoint a co-trustee of the property to enable a sale, or must they first obtain authority from the Court of Protection? Under section 7 of the Trustee Delegation Act 1999 ( TDA 1999), a capital money receipt will only overreach beneficial interests where an attorney acts together with at least one other individual. For a sale of land, overreaching requires either two trustees or a trust corporation (see section 2 of the Law of Property Act 1925). Accordingly, the...

Performance report Management information released by HMCTS indicates continuing progress in cutting the backlog and improving the timeliness of applications. Year to date in 2024, a total of 254,520 grants (digital and paper) have been issued, against 227,560 applications received over the same period. At this pace, 2024 is on track to pass 300,000 grants, with July 2024 setting a single-month record of 32,002. Issued grants have outpaced incoming applications for more than 12 months, leaving 44,852 open cases in September 2024, down from 92,819 in September 2023—the backlog has effectively halved across the last year. Case duration Of the total open cases, 1,238 are 24+ months old; 2,563 are between 12 and 24 months; 6,087 are six to 12 months; and 34,964 are under six months. Practitioners with applications older than six months should email HMCTS to request a telephone appointment with a senior member of staff to...

HMRC v Bluecrest Capital Management ( UK) LLP [2025] EWCA Civ 23. What are the practical implications of this case? This decision is highly consequential and may load considerable extra expense onto investment managers and professional services businesses. Its ultimate reach will not be clear until the FTT re-examines the issues (and any near-inevitable further appeals are resolved), or if the dispute proceeds to the Supreme Court. As a result, numerous professional partnerships remain in prolonged uncertainty about their eventual tax treatment. A great many partnerships depend upon the safe harbours within the salaried members regime to remain outside its ambit. The income tax dimension of those provisions is material yet broadly containable; affected individuals would probably bear a similar tax burden, collected through PAYE rather than self-assessment (and many firms already make income tax reserves in a manner comparable to PAYE). The more...

In this issue: Court of Protection Elderly and vulnerable clients UK taxes for Private Client HMRC Manuals updates Tax avoidance, evasion and non-compliance Budgets and Finance Bills Contentious trusts and estates Art and heritage property, landed estates and farming families Pensions, insurance and tax efficient investments Scotland, Wales and Northern Ireland Question of the week Additional Private Client updates this week Daily and weekly news alerts Lex Talk® Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Latest Q& As Useful information Court of Protection Court of Appeal clarifies proper ordering of mental capacity test in litigation The Court of Appeal, in Mac Pherson v Sunderland City Council [2024] EWCA Civ 1579, has provided firm direction on the correct approach to determining litigation capacity. It underlined that assessments must follow the two-limbed analysis from A Local Authority v JB [2021] UKSC 52, rather than the superseded Mental Capacity Act Code of Practice, which applies the...

Former HM Revenue and Customs tax inspector Simon Emblin, together with lawyers Carl O' Shea and Mark Reid, orchestrated the sale of loan assets to FS Capital Ltd — where Emblin was a director — for what they regarded as 'a fraction of their true value', according to a Court of Appeal judgment handed down on 28 January 2025. O' Shea is a group partner at Hatstone LLC, a boutique Jersey-based law firm, while Reid is a former partner at Gateley Wareing Solicitors, now Gateley Plc. With Emblin, they devised and executed a scheme to exclude the beneficiaries and divert the 'huge commercial opportunity' to themselves, the lower court found. In a concurrence with Justice Sarah Asplin's ruling, Justice Stephen Males noted that this was, in the 'archaic and inaccurate language of equity', 'a fraud on a power', a...

See Q& A: Where the deceased made lifetime gifts in the seven years before their death in excess of the nil rate band, does the annual exemption and the nil rate band apply to the failed PETs before IHT taper relief is calculated? Please consult Practice Note: IHT consequences of lifetime transfers (particularly the section ' Allowances and exemptions') carefully, which sets out how potentially exempt transfers ( PETs) become chargeable to IHT if the donor dies within seven years......

Court of Protection issues anticipatory declarations on care where capacity fluctuates ( Oldham MBC v KZ & Others) Oldham Metropolitan Borough Council v KZ (by his litigation friend the Official Solicitor) and others [2024] EWCOP 72 What are the practical implications of this case? The Court of Protection has, once more, considered how best to respond when an individual is assessed as having ‘fluctuating capacity’. Under section 2(1) of the Mental Capacity Act 2005 ( MCA 2005), capacity is decision-specific and must be evaluated at the point the decision is taken. Fluctuation in capacity creates practical challenges. For instance, a care provider may need, in demanding circumstances, to judge whether a significant choice about care has been made with capacity. Where distinct periods of incapacity can be identified, the courts have been prepared to make anticipatory declarations authorising future measures, eg a care plan, which would...

Bryan Robson Ltd v HMRC [2025] UKFTT 56 ( TC) Bryan Robson Ltd functioned as the personal service company for the former Manchester United and England footballer, Bryan Robson. For many years he served as club ambassador under a succession of agreements. It was accepted before the FTT that the only issue in dispute concerned the 2019 agreement between the club and the company; earlier deals had been made between the club and Mr Robson personally. Under the 2019 agreement, the club was granted a licence to use and exploit Mr Robson’s image worldwide, for any purpose. The agreement also obliged the company to ensure that Mr Robson undertook personal appearances on no fewer than 35 days in each six‑month period. These duties covered hosting at matches and attending events held by the club’s sponsors. The company was paid a flat fee. The...

Hirachand ( Appellant) v Hirachand and another ( Respondents) [2024] UKSC 43 What are the practical implications of this case? Applications under the I( PFD) A 1975 are frequently issued by individuals requiring financial support. On that basis, numerous claimants lack the funds to meet continuing legal expenses personally from their own pockets. As a result, CFAs are commonly adopted and relied upon. In addition, determining a maintenance award involves evaluating a person’s financial position and requirements in detail. Success fees cannot be recovered from the opposing party under section 58A of the Courts and Legal Services Act 1990. Yet they remain a monetary obligation of a winning claimant. Prior to this ruling, the success fee could be factored in when assessing financial need and, in turn, when fixing the substantive award. That approach no longer applies, so successful parties must satisfy the success fee from their own...

Demetriou and another v Revenue and Customs Commissioners [2024] UKFTT 830 ( TC) What are the practical implications of this case? It serves as a reminder that the onus lies with the taxpayer to prove, with evidence, that the activities on the non‑investment side are sufficient to stop the enterprise being characterised primarily as one of holding investments. Where revenue stems from the ‘exploitation of land’, in whatever guise, there must be more than mere rent or letting receipts. Numerous cases indicate that such services must be substantial for relief to be available. Moreover, the services must be of a calibre and kind that goes beyond complimentary offerings or routine steps required to maintain and secure the property, irrespective of how they are delivered and how involved the owner is. In this matter the court made it clear that the bar was not...

Re XY (withdrawal of treatment) [2024] EWCA Civ 1466 What are the practical implications of this case? Information concerning an individual’s wishes and feelings linked to their faith must be assessed in the context of their actual medical situation and circumstances. Judges are entitled to weigh the family’s accounts of P’s wishes and feelings against the backdrop of the family’s own beliefs, including as to their beliefs about the efficacy of treatment and the prospect of recovery. Compliance with the principles set out in the Mental Capacity Act 2005 ( MCA 2005) and the Code of Practice, together with the professional guidance available to doctors, is sufficient to meet the procedural safeguards required by Articles 2, 3 and 8 of the European Convention on Human Rights ( ECHR). What was the background? XY, aged 54, developed a prolonged disorder of consciousness following two cardiac arrests. She had...

In this issue: Court of Protection Elderly and vulnerable clients UK taxes for Private Client HMRC Manuals tracker Tax avoidance, evasion and non-compliance Insolvency— Private Client Contentious trusts and estates Pensions, insurance and tax efficient investments Scotland, Wales and Northern Ireland International Question of the week Additional Private Client updates this week Daily and weekly news alerts Lex Talk®Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Latest Q& As Useful information Court of Protection Court of Protection determines it has jurisdiction to consider whether P’s mother should continue as property and affairs deputy ( P, Re ( Property & Affairs Deputyship: Jurisdiction)) This matter involved P, an adult who suffered a brain injury in an accident and was entitled to a...