A summary of key legal updates for the Private Client sector over the past week is as follows.

Finance Bill 2022

Draft legislation for Finance Bill 2022 will be published on 20 July 2021 for technical consultation before being introduced into Parliament following the next Budget (date to be confirmed but likely to be in the autumn). The government have stated that the Bill "will largely cover pre-announced policy changes". https://questions-statements.parliament.uk/written-statements/detail/2021-07-07/HCWS155

Probate fees

On 8 July 2021, the Ministry of Justice launched a consultation on raising the fee for a grant of probate in England and Wales to £273, whether the application is submitted by a professional or lay person. One of the aims is to raise additional income, preventing the service operating at a loss and requiring a public subsidy. Another aim is to remove the "unjustified discrepancy" between the current fees paid by professional applicants (£155) and non-professional applicants (£215). Subject to the outcome of the consultation, the new fee structure will be introduced in early 2022. The consultation is open until 23 September 2021. Proposal for reform: Aligning the Fees for Grants of Probate to Cost Recovery (publishing.service.gov.uk)

HMRC investigations - follower notices

A "follower notice" is broadly an HMRC enquiry into a tax arrangement where there is a final judicial ruling relevant to the arrangement which would deny the taxpayer the tax advantage they are asserting. A follower notice can require the taxpayer to pay the disputed tax upfront or risk penalties. A Supreme Court decision (R (on the application of Haworth v HMRC, 2021 UKSC 25) should now make it easier for taxpayers to challenge these notices. In this judicial review case, a follower notice regarding tax avoidance using an offshore trust was quashed as HMRC had misdirected itself in its analysis of the relevant judicial ruling. The Supreme Court found that HMRC must form the opinion that there is no scope for a reasonable person to disagree that the earlier ruling denies the taxpayer's advantage. This will depend on factors such as whether the earlier ruling was fact sensitive. Follower notice only valid if no scope for a reasonable argument that earlier ruling does not deny the asserted advantage (Supreme Court) | Practical Law (thomsonreuters.com) 

Report on HMRC's relationship with wealthy taxpayers 

On 24 June 2021, HMRC published research on its relationships with wealthy individuals and their tax agents. The aim is to explore ways "to foster greater trust and transparency, reduce the tax gap and increase voluntary compliance." The report highlights the considerable journey that HMRC face in making wealthy individuals and their agents perceive their working relationship as reciprocal or co-operative. Feedback suggests the relationship is more adversarial and HMRC's "default position" is one of mistrust and a perception that wealthy individuals engage in illicit activity in a tax context. Fostering more personalised relationships with wealthy individuals and reducing inefficiencies in HMRC’s processes and systems was identified as one way of improving the situation. www.gov.uk/government/publications/co-operation-with-the-wealthy-and-their-agents