A summary of key legal updates for the Private Client industry over the past week is as follows.
Tax policy - Finance Bill 2023
On 5 July 2022, the government announced that draft legislation for the Finance Bill 2023 will be published on 20 July 2022 for technical consultation before being introduced to Parliament after the Autumn 2022 Budget. This follows the usual legislative timetable. The Bill will be of measures largely covering pre-announced policy changes. Draft Finance Bill 2023 legislation to be published on 20 July 2022 (L-Day) | Practical Law (thomsonreuters.com)
Tax policy – Tory leadership campaign
It looks like tax policy will be a key battleground in the elections for a new leader of the Conservative party. The tax policies (as announced so far) of the leading candidates are summarised in this article: EPrivateClient - article (paminsight.com).
Residence – statutory residence test case
In Batten v HMRC, 2022 UKFTT 199 TC, the First-tier Tax Tribunal ("FTT") has ruled that Ernest Batten was UK tax resident in 2014/15, despite having left the UK to live and work full-time in Gibraltar more than four years previously. This is an example of a case where both the statutory residence test ("SRT") and the pre-SRT common law rules had to be considered. This was because, although the SRT applied to the tax year in question (having been introduced in 2013/14), it was necessary to consider the "sufficient ties" test and part of this required an analysis of residency in the previous three tax years. The only year in dispute was 2012/13, the last year in which the pre-SRT rules applied. As a result, although the taxpayer would not have been non-UK resident under the SRT in 2012/13, the pre-SRT rules gave the opposite result, meaning that the taxpayer was deemed UK resident for 2014/15 and CGT was due on 34 disposals of UK properties he made in that year. The FTT recognised that the result was "untidy" and although the SRT was designed to generally produce the same result as the preceding common-law, "codification of common law principles will, by nature, produce some differing results". The FTT noted that there was no basis on which they could apply the SRT retrospectively. TC08524.pdf (bailii.org)
Wills – executor charging clause
In Da Silva v Heselton  EWCA Civ 880, the Court of Appeal has confirmed that a trustee or executor can rely on a professional charging clause in a Will to charge for work done in the administration of the estate if that work falls within the scope of their profession or business and is of a type which would attract or incur their usual professional fees. In this case, the executor was not a solicitor and gave limited evidence about her professional qualifications other than saying that she was "engaged in business and in the management of commercial and residential property". The court had to decide whether the clause in question allowed any trustees who happened to be engaged in a profession/ business to charge irrespective of whether the work had any connection with their profession/ business. The court concluded not, saying that it made no obvious sense for the estate to pay an executor for work in which they had no relevant professional skill or business experience. The decision is reassuring for solicitors who are appointed as professional executors/ trustees. Court of Appeal upholds High Court's decision on professional executor charging clause | Practical Law (thomsonreuters.com)
Contentious probate – farmland proprietary estoppel claim
In Williams v Williams, 2022 EWHC 1717 Ch, the claimant failed to establish that farmland and buildings in Wales were assets of the farming partnership set up by himself and his parents and that those assets vest in him following his parents' death rather than passing under his parents' Wills to two of his siblings. His alternative proprietary estoppel claim, based on promises his parents made to him when the farms were purchased and also after that, was found by the court to be not made out: there was no reasonable reliance, and it was not clear that he had suffered detriment. Williams v Williams & Ors  EWHC 1717 (Ch) (04 July 2022) (bailii.org)