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

Finance Bill 2022

Finance Bill 2022 was published on 4 November along with explanatory notes, legislating for tax changes announced at the Autumn Budget. These include:  

  • the 1.25% increase to National Insurance Contributions;
  • income tax rates for 2022/23 (including the 1.25% increase to dividend tax rates);
  • the increase in the normal minimum pension age (from 55 to 57 years);
  • the time limit extension for capital gains tax payments on disposal of land (from 30 to 60 days);
  • provisions in connection with the Dormant Assets Act 2022; and
  • provisions extending HMRC's powers to tackle promoters of tax avoidance schemes.

Autumn 2021 Budget resolutions passed and first Commons reading of Finance Bill 2022 | Practical Law (thomsonreuters.com)

Overseas Entities Register

There has been no update for some time on the introduction of a register of beneficial owners of overseas entities owning land in the UK. A draft Bill was published for consultation in July 2018 with the intent that such a register would be "operational in 2021" but the required primary and secondary legislation has still not been introduced to Parliament. On 2 November, the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy confirmed that the government is still committed to introducing the register and legislation would be introduced "as soon as parliamentary time allows".  Register of Beneficial Owners of Overseas Entities Upd - Hansard - UK Parliament

1975 Act and divorce orders

The recent case of Sismey v Salandron saw a claim under s.11 of the 1975 Act litigated to trial for the first time. Section 11 is intended to limit a testator's ability to make contractual agreements leaving a legacy to another person in order to defeat the 1975 Act's reasonable provision clauses. In this case, the beneficiary of such a legacy (the deceased's son) was successful, meaning that the contract (a Family Court approved divorce agreement) effectively took precedence over the widow's claim for reasonable financial provision. However, the barrister who acted for the son has said that the case brings "an air of uncertainty when it comes to decisions made by the family courts" since, although the divorce settlement was upheld, it is one of the first cases in which a judge has found evidence of collusion when moving assets under the terms of a court-approved divorce order. No5 Barristers Chambers - Landmark case sees Section 11 of Inheritance Act 1975 litigated | No5 Barristers' Chambers

Mental capacity – best interests and international travel

AB v XS [2021] EWCOP 57 is a cross-border mental capacity case involving a Lebanese woman (XS) who had become a UK citizen, and whether it was in her best interests to return to the UK. XS had an LPA, which she made whilst she was living in the UK. There was strong evidence that XS no longer had capacity in respect of where and in what country she lived. The Applicant (XS's cousin) wanted to bring XS back to the UK; however two of XS's nephews disagreed. The Court decided that XS was habitually resident in Lebanon, it did not have inherent jurisdiction to order her return to the UK and it was in her best interests to remain in Lebanon. The case illustrates the importance for the internationally mobile and/ or those with cross-border affairs of setting out clear wishes in their LPA as to which country they would like to be cared for in, after loss of capacity. Later life travel and mental incapacity, Ann Stanyer (wedlakebell.com)