Legal News

Rupert Grint v HMRC [2024] UKFTT 956 ( TC). In 2011, a decade after filming began on the first Harry Potter film, Clay 10 Ltd was incorporated to supply Mr Grint’s acting services. Mr Grint was the only shareholder, while his father, who was also his manager, acted as the sole director. The company received the actor’s existing and future rights, together with business information and goodwill, for consideration of £8.5m. That consideration was left outstanding on a shareholder loan account, with £4.5m treated as consideration for goodwill, records and rights. In his 2011–12 tax return, Mr Grint returned that sum as a capital gain and claimed entrepreneurs’ relief. HMRC opened an enquiry and, by closure notice, charged the £4.5m to income tax rather than capital gains tax, on the basis that the ‘sale of occupation income’ provisions in Chapter 4 of Part 13 of the...

In this issue Court of Protection UK taxation for private clients Updates to HMRC Manuals Tax avoidance, evasion and non-compliance Budgets and Finance Bills Private client insolvency Digital and crypto assets Charity and philanthropy Disputed trusts and estates Pensions, insurance and tax‑efficient investments International Further Private Client updates this week Question of the week News alerts—daily and weekly 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 rules that an anonymity application under CPR 39.2(4) and section 6 of the Human Rights Act 1998 must proceed on a statutory basis ( PMC (a child by his mother and litigation friend FLR) v Local Health Board) The claimant, a boy born in 2012,...

See Q& A: Where a claim under the Inheritance ( Provision for Family and Dependants) Act 1975 is notified against an estate with two beneficiaries, and one is prepared to pursue alternative dispute resolution and weigh up settlement, but the other will not entertain either option, can the first conclude a deal with the Claimant ( C) limited to the share said to be 'their half' of the estate, leaving C to continue the contest with the remaining beneficiary? Further, could such an arrangement be structured so that any subsequent costs order in C's favour does not reduce the entitlement of the beneficiary who has compromised? This is a thought-provoking point......

HMRC v The Taxpayer and others [2024] UKUT 364 ( TCC) Absent any appeal to the Court of Appeal, the decision will be republished without anonymisation on 11 December 2024. In September 2021, the First-tier Tax Tribunal ( FTT), by way of an unpublished ruling, ordered that preliminary steps on the taxpayer’s substantive appeal be conducted in private. That appeal related to HMRC’s refusal of certain tax deductions, and HMRC challenged that privacy direction. In January 2024, the UT set aside the FTT’s order ( HMRC v The Taxpayer [2024] UKUT 12 ( TCC)), concluding there were material errors of law. That subsequent ruling was itself anonymised while any further appeal was in prospect. In April 2024, the taxpayer appealed to the UT against the January 2024 decision, seeking a direction that, if the taxpayer’s bid for anonymity were refused, the...

Background to the consultation Between 22 March and 29 April 2022, the Organisation for Economic Co-operation and Development ( OECD) undertook a public consultation, concluding with a meeting on 23 May 2022. This led to OECD-level finalisation of the rules and commentary for both the CARF and updates to the CRS, promoting consistency across jurisdictions. In November 2023, the UK, together with 47 other countries and territories—including the Crown Dependencies of Guernsey, Jersey and the Isle of Man, and the UK’s Overseas Territories of the Cayman Islands and Gibraltar—signed a Joint Statement committing to swiftly transpose the CARF into domestic law and to activate exchange agreements so that exchanges can commence by 2027. Although the OECD CARF/ CRS suite followed a public consultation, it includes optional components and does not prescribe detailed practical implementation. Consequently, HMRC held a consultation from 6 March 2024 to 29 May 2024 to...

Al- Thani and another v Al Thani and others ( Virgin Islands) [2024] UKPC 35 What are the practical implications? The Privy Council rejected an interpretation of section 245 which it considered would amount to a ‘radical change’ to the BVI’s private international law rules. Had the appellants succeeded, foreign‑domiciled owners of shares in BVI registered companies who wished to transfer those shares on death would have been obliged to execute a separate will compliant with the BVI Wills Act, rather than relying on a will valid under the law of their domicile. That interpretation would have required that step and created a ‘trap for the foreign investor’. The decision avoids that inconvenient result by confirming that, in the BVI, shares continue to be treated as movable property, with succession governed by the law of the owner’s domicile, thereby maintaining the existing approach as had...

See Q& A: If a claimant has died and there are no personal representatives appointed to administer their estate, who can act to represent the estate of the deceased? Consult the Q& A: If a claimant has passed away and no personal representatives are appointed to manage the estate, who may step in to represent the deceased’s estate?......

HMRC v Sintra Global Inc & another [2024] UKUT 346 ( TCC) A penalty arose from the company’s purportedly dishonest omission to tell HMRC that it was liable to register for VAT and to file VAT returns, and it rested on a ‘best judgment’ assessment made by HMRC under section 73 of the Value Added Tax Act 1994 ( VATA 1994). The UT sent back to the FTT the questions about the assessment’s validity and amount, remitting those issues for reconsideration and fresh findings. The dispute involved two offshore companies, both directed by the same individual, which HMRC alleged participated in the fraudulent redirection of alcohol into the UK and the subsequent sale of that alcohol in the UK market. The FTT had upheld the appellants’ challenges. HMRC then took the matter to the UT on six grounds, contesting the FTT’s...

Background It is a long-standing rule in England and Wales that disputes over rights and interests in land and other immovables are determined by the law of the place where the asset is located, commonly called the ‘immovables rule’. This appeal concerns the impact, if any, of that rule on a claim by a bankruptcy trustee appointed in foreign bankruptcy proceedings to immovable property located in England. The point arose in respect of a London property owned by the Respondent, Mr Bedzhamov (the ‘ Property’). A Russian national, Mr Bedzhamov left Russia in 2015 and has not resided there since. In 2018, a Russian court adjudicated him bankrupt and appointed the Appellant, Ms Kireeva, as trustee of his bankruptcy estate. Under Russian law, the Property forms part of that estate and Ms Kireeva is obliged to take possession of and sell the...

On 30 October 2024, alongside the Autumn Budget, HMRC launched a consultation on proposals to modernise and reform the UK’s tax administration system. The consultation seeks views on potential changes to HMRC’s powers, intended to make it simpler and quicker for taxpayers to put matters right, while helping HMRC collect tax more effectively and efficiently. What is the background to this consultation? There has been a concentrated effort in recent years to shrink the ‘tax gap’—the difference between what is owed to HMRC and what is actually paid. Through this Budget, the current government have signalled continued commitment to that goal. The latest figures indicate that careless errors—particularly by individuals and small businesses—account for most of the shortfall. Individually small, these mistakes collectively amount to very large sums. A series of consultations in recent years has examined reform of the UK’s tax...

In this issue: Trusts Powers of attorney and advance decisions Older and vulnerable clients UK taxation for private client Updates to HMRC Manuals Tax avoidance, evasion and non‑compliance Budgets and Finance Bills Family businesses and ownership structures Digital assets and cryptoassets Charity and philanthropy Contentious trusts and estates Scotland, Wales and Northern Ireland Question of the 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 Rectification used to validate scheme amendments despite defects in their execution ( Ballard v Buzzard) In Ballard v Buzzard [2024] EWHC 2765 ( Ch), a pensions matter, the High Court concluded that the amending deeds were effective...

DDR v BDR [2024] EWFC 278 What are the practical implications of this case? As well as offering a highly accessible distillation and application of the principles governing disputes over property between a sole legal proprietor and a non-legal claimant asserting a beneficial interest, this judgment underlines the truly basic distinction between the court’s declaratory function in property matters and its redistributive powers under the Matrimonial Causes Act 1973 ( MCA 1973). It also offers a template for the clear, targeted presentation of financial remedy applications. Where questions arise about the scope of a party’s bankruptcy estate, the approach must be equally disciplined. Its structured reasoning demonstrates how to keep such issues sharply defined and tightly analysed throughout the conduct of the application, from start to finish. The judge’s careful, methodical analysis should not mask the 'somewhat unfocused and...

Lumb v Lumb [2023] EWHC 2052 ( Ch) What are the practical implications of this case? This decision is a warning that, in probate proceedings, it is unusual, and an exception, for the court to stray from the default CPR 44 costs regime, which ordinarily governs who pays. The CPR’s costs philosophy, aimed at deterring unproductive contests and promoting compromise, governs probate contests as fully as it does other claims, in practice and in principle. The distinct probate costs provisions operate in tandem with the CPR and its underlying approach, rather than displacing it. Where a defendant requires proof of the Will in solemn form under CPR 57.7(5), the CPR 57.7(5)(b) clause, by which the court withholds a costs order unless there were no reasonable grounds to challenge the Will, must be read restrictively. Bare arguability is not synonymous with...

See Q& A: To what extent does section 27 of the Trustee Act 1925 provide protection for administrators on an intestacy against claims by unknown beneficiaries and creditors? Under section 27 of the Trustee Act 1925 ( TA 1925), personal representatives may publish notice in the Gazette and a local newspaper, inviting anyone with an interest to deliver details of a claim within a period, no shorter than two months......

Khan and others v Khan [2024] EWHC 2491 ( Ch) What are the practical implications of this case? This decision contributes to the growing jurisprudence on trusts of family property where there is scant or no paperwork. In such matters, the court must reconstruct intentions and make findings from longstanding, informal family arrangements, often stretching back decades, in the absence of formal written records to clarify how interests were intended to be held. What was the background? The dispute concerned four addresses: 14 Stapleton Road, 7 Essex Grove, 53 Norbury Crescent and 5 Ullswater. Mr Khan was central to acquiring the Properties, although legal ownership and mortgages were, at times, placed in the names of different children from the outset. The children— Ahmed, Sarwar, Muhammed (the ‘ Sons’), together with Shalima, Farhana and Jennifer (the ‘ Daughters’)—each asserted differing stakes in the Properties. Through a series of...

The Executors of KDL Beresford v HMRC [2024] UKFTT 952 ( TC) The deceased, B, held shares in F Ltd, which in turn wholly owned N Ltd. N Ltd owned a six‑storey office building situated in London. Two storeys were let on commercial leases, while the remaining four were run as serviced offices, administered for the company by an agent. At any given time, approximately 42 individual offices in total were in occupation, usually by between seven and 20 separate firms. Clients entered into 12‑month office agreements including a break clause and were required to pay two separate fees. The first, the 'facility fee', related to the office space and a set of standard services, such as utilities, cleaning, telephone answering and reception services, together with access to kitchens and sanitary facilities......

TA v The Public Guardian [2023] EWCOP 63 What are the practical implications of this case? The court regarded this as a discrete yet significant point. In reaching her decision, the judge set out the key Mental Capacity Act 2005 provisions connected to LPAs, alongside the Lasting Power of Attorney etc Regulations 2007, with emphasis on execution and certification requirements. MCA 2005, section 9 (general provisions) MCA 2005, section 22 (powers of the court on LPA validity) MCA 2005, Schedule 1 ( LPA formalities) 2007 Regulations, regulation 9 (execution of instruments, including LPA certificates) Practitioners beyond mental capacity and COP specialisms frequently support clients in putting LPAs in place. They need not be versed in the detail of MCA 2005, Schedule 1 or the 2007 Regulations, as the necessary requirements are clearly set out in Forms LP1F (financial affairs) and LP1H (health care and decisions), which provide clear,...

In this issue: Wills Court of Protection UK taxes for Private Client HMRC Manuals updates Tax avoidance, evasion and non-compliance Budgets and Finance Bills Family businesses and ownership structures Insolvency— Private Client Charity and philanthropy Contentious trusts and estates Pensions, insurance and tax efficient investments International Additional Private Client updates this week Question of the week Daily and weekly news alerts Lex Talk®Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Useful information Wills Will set aside for lack of testamentary capacity and undue influence ( Oliver v Oliver) William Oliver passed away on 25 May 2018, aged 86. A widower, he was survived by five children. His youngest daughter, Jane, sought to have his 2015 will overturned on the bases that: (a) execution failed to meet the formal requirements under section 9 of the Wills Act 1837; (b) he lacked testamentary capacity at the time; or (c) the will was procured through undue influence. The defendant, Rodney, William’s eldest...

Dhoray v Attorney General of Trinidad and Tobago and another ( Trinidad and Tobago) [2024] UKPC 28 What are the practical implications of this case? This ruling clarifies the purpose behind Chapter 9 of the Constitution, which locates in the Public Service Commission the authority to appoint and dismiss those serving in government employment. The Judicial Committee concluded that these constitutional guarantees exist, first, to secure the independence of public officers and shield them from partisan pressure, and, second, to safeguard the wider public against the consequences of political meddling. A key conclusion was that the danger in both respects sprang from the institutional placement of these officers within government, rendering them answerable to ministerial direction. Accordingly, where the relevant function is taken out of government and entrusted to a distinct statutory entity, those particular protections are not required, so long as two...

See Q& A: What is the process to obtain Letters of Administration when the deceased is survived by a minor child, a mother, and a sister, with the surviving parent (father) wishing to renounce their right to administer the estate, and the mother and sister seeking to take out the Letters of Administration? We proceed on the basis that the surviving parent of the minor was neither married to, nor in a civil partnership with, the deceased, with the consequence that on intestacy the minor alone benefits from the estate. Please consult Practice Note: Intestacy—priority to apply for grant— Q& As, and in particular section ‘ Particular relatives and entitlement to grant on intestacy’, looking at the subheadings ‘ Minor children only’ and ‘ Minor children and deceased’s parents’. The following Q& A may prove useful: where a person dies intestate without a...