Consultant and Tax Specialist at Wilkes Philip Harrison writes for Finance Monthly about how a global outlook when it comes to tax planning is essential in a modern, and increasingly globalised world.

With the number of people emigrating from the UK tipping over 400,000 a quarter for the first time ever in 2019 and immigration rates comfortably over 600,000 a quarter, the movement of people out of and into the UK is high and once normality post-coronavirus returns so will the movement of people. The knock on effect for tax specialists is a vast and varied flow of inheritance money going across borders and a need for today’s skilled financial advisers to have access to knowledge of the tax laws in more than just their own country.

Over the course of more than three decades in private client work I have seen that as globalisation impacted the lives of many (if not most) clients, the work in tax changed. The frictionless trade borders coming in and then hardening as protectionism was enacted by some of the world’s major economic powers has seen families spread across borders and then get locked in by them. This has made cross-border transactions yet more difficult and convoluted.

A consequence of this movement of people is the increased movement of personal funds. Cross-border remittances are now worth more than foreign direct investment to lower middle-income countries with an estimated $689bn transferred across the globe in 2018, according to the World Bank.

The picture created is a complex web of currency passing over borderlines and weaving economies deeper into each other. This is before inheritance, which is usually the largest one-off transfer of assets made by a person, comes into question. And lifetime wealth transfers – for example through trusts – add another layer of complexity again.

This world in constant flux with borders opening and tightening and generations of families having migrated across borders leaves tax advisers in a difficult position. Unable to apply one strategy to a single estate planning case, we have to take account of multi-jurisdictional factors which mean that sensible measures in one place can cause problems in another.

The potential pitfalls became very apparent when I was advising on a trust structure for a family originally from the UK where the main beneficiaries had emigrated to Canada. In structuring distributions to the beneficiaries, it transpired that sensible planning for Canadian tax purposes was inefficient for UK purposes and vice versa.

This is where having the experience to seek out the right knowledge is vital. Personally, through years working in the international sector of the market, I have gained knowledge of a variety of tax systems and have to spot where foreign tax issues arise even though I do not advise on them. But as tax lawyers we know that knowledge is an entirely different thing to expertise and the ability to advise on the intricacies of tax models built over years.

It is because of this that I believe that one of the most useful aspects of working internationally isn’t just spotting an issue, but developing the overseas networks of trusted talent to rely upon for advice and collaboration.

The traditional model of being part of an international firm or an international network, surprisingly, can be no real advantage when it comes to taking overseas advice. In fact, it can be a disadvantage or a restriction as there is an obligation to use the offices of your own firm or network and they may or may not be the best people for the job. In this case, working with a UK-based firm such as The Wilkes Partnership is a liberation as I am free to involve whoever I think is right for the client and the advice required.

Having the knowledge to spot an issue and seek out the right expertise from within a jurisdiction is the skill when creating the right, sensible succession plan for clients.

Some of those issues can arise:

  • Where a UK client (without other overseas connections) has overseas assets
  • Where an overseas client (without other UK connections) has UK assets
  • Where an overseas client coming to the UK, or already here but only for a relatively short time, plans to remain for the longer term
  • Where an overseas client from certain countries (especially India and Pakistan) has been in the UK for a long time and has overseas assets or assets that can be transferred overseas
  • Where a UK client is emigrating or has already emigrated

It’s not just certain scenarios to be aware of when working internationally. There are, of course, some foreign tax systems that are especially difficult to navigate. For example, the USA has its estate or gift tax (like its income tax) based on citizenship not residence or domicile. And the taxes in some jurisdictions work on a very different basis to our inheritance tax and can be difficult to understand. For instance, the capital acquisitions tax in the Republic of Ireland falls into this category and given large numbers of UK residents have families in the Republic of Ireland this is an area that tax specialists must be aware of.

In contrast there are some are helpful jurisdictions like India and Pakistan, whose domestic tax laws give rise to tax planning opportunities in the UK.

The UK has a small number of estate taxes treaties with other countries (separate from the normal double tax treaties) but there are only ten of these.  Their main purpose is to prevent double taxation where the same assets could be subject to tax here and abroad.  Where there is no treaty, the UK gives unilateral relief for foreign tax but the conditions which have to be satisfied mean that it does not always work perfectly.

Four of the treaties are “old” (India, Pakistan, France and Italy) and in theory give rise to tax planning opportunities but in the light of the countries’ domestic tax systems, it is often only Indian and Pakistani clients who can avail themselves of these.

Finally, it is always essential when undertaking an international estate planning assignment to take account of other taxes as well as inheritance tax – e.g. capital gains tax – or their overseas equivalents.

As remittances increase, generations continue to migrate, and protectionism and globalisation fluctuate, cross-border tax will be a vital part of estate planning. This has created a climate where tax experts need to not only know their own jurisdiction, but also have the knowledge to see barriers and call in expertise from other jurisdictions. The world we now live in, and the one after coronavirus has reshaped the globe, requires tax experts to have access to more than just the knowledge within the confines of our own borders. In this climate, we need the personal connections overseas and the ability to foresee barriers if we are to deliver private and business clients the best service possible.

Philip Harrison is a consultant at Wilkes working across our Birmingham and Solihull offices Philip specialises in advising business owners and high net worth individuals on estate planning, involving the protection of family wealth as well as inheritance tax mitigation.

He helps his clients to devise a comprehensive estate planning strategy with the aim of taking maximum advantage of available tax reliefs, especially for business or agricultural assets.  He also manages the implementation of his clients’ estate planning strategies, which might involve direct gifts to children or grandchildren or the creation of family trusts or family investment companies.

If you have any questions regarding this update you can contact Philip on pharrison@wilkes.co.uk or 0121 233 4333.

Following the COVID-19 outbreak, we have been approached by many clients wishing to prepare or update their existing Wills and put in place Lasting Powers of Attorney (“LPAs”).

Can I still make a Will or LPAs despite the lockdown?

It has been declared that lawyers who prepare Wills are key workers and so we have continued operating during this time. We will initially take instructions for your Wills and LPA’s via telephone or video-streaming services such as Skype and Zoom so that we can fully understand your needs.

We will then send your draft Will or LPAs to you for your approval via email or post. We are on hand to answer any further questions or queries you may have regarding the drafts to ensure you receive the high-quality and tailored legal advice you would in a face-to-face meeting.

How do I sign my Wills and LPAs?

Under Wills Act 1837, a Will must be signed in the presence of two independent witnesses. Whilst the Law Society and the Ministry of Justice are considering relaxing these requirements, there has been no changes yet. We can provide you with detailed instructions about how you must sign your Will to ensure that it is valid whilst complying with government guidance for social distancing.

We are also happy to oversee the Will signing ourselves providing this is outdoors, either at your home, or by advance arrangement, at either our Birmingham or Solihull offices/ other outside spaces, whilst of course, still recognising the social distancing rules.

Similarly, LPAs must be signed in the presence of an independent witness and then certified by a certificate provider of your choice. We are happy to provide information and answer any questions you have regarding how this can be achieved by you independently or in our presence whilst still following the social distancing rules.

Members of our Private Client Team have prepared various video guides which talk about the importance of a Solicitor drafted will and also The Court of Protection & Lasting Powers of Attorney. You can watch these using the links below.

The Importance of a Solicitor Drafted Will – Watch here

The Court of Protection & Lasting Powers of Attorney – Watch here

If you would like to enquire about preparing a Will or Lasting Powers of Attorney please contact Ellie Holland on 0121 733 8000 or eholland@wilkes.co.uk.

In this article Kate Campbell-Gunn, Associate Solicitor in our Birmingham Personal Injury & Clinical Negligence Team discusses the difference between primary and secondary victims.

Personal injury law recognises two sorts of victims, primary and secondary victims.  A person who is injured or even killed by another’s negligence is a primary victim.  In a medical perspective this would be a patient harmed by their medical treatment.  However, a primary victim’s immediate family member may become a secondary victim, if they actually witness the negligence and then suffer psychiatric injury.

The law sets down a strict criteria for secondary victim claims:
  • It was reasonably foreseeable that a person of normal fortitude would suffer from a psychiatric injury
  • The secondary victim has a sufficiently close relationship with the immediate victim
  • There was sufficient proximity to the accident &
  • The psychiatric illness was caused by shock as the result of the sudden appreciation of a horrifying event.

The case law to date has found against secondary victims claiming psychiatric damage when a prolonged period of time has passed on the basis is does not satisfy the proximity test. However, in the recent case of Paul v Royal Wolverhampton NHS Trust, children of a man misdiagnosed some 14 months prior witnessed his death when out on a shopping trip.

At first instance, the Judge held against them however on appeal it was found that the event was sufficiently shocking to them and caused them to suffer psychiatric injury and as there was a direct link between the negligence and them witnessing the death, they could claim.

Situations where this may occur are:
  • A patient is given emergency treatment and on returning to ICU, where their wife is waiting, the wrong injection is administered negligently and causes a fatal allergic reaction.  Witnessing that tragic event caused the wife psychological injury who may pursue a claim as a secondary victim.
  • A patient is given negligent treatment which causes their condition to deteriorate and possibly death or severe disability.  Witnessing a loved one worsen over time may be sufficiently traumatic to trigger a recognised psychiatric disorder.
Birth and Secondary Victims

Secondary victim claims occur more commonly in the labour and delivery suite.  Where an expectant Mother or new born baby is injured or sadly dies due to a hospital’s negligence, the consequences are devastating for the whole family.

Often new Mums choose a birthing partner to be with them every step of the way in their labour.  This is usually a partner or parent and if they witness a horrifying event leading to their psychological injury, they can become secondary victims.

Kate comments; ‘The case of Paul very much turned on the specific facts and there still exists a strict criteria for establishing a secondary victim claim, however this case goes some way into recognising that, particularly in relation to medical treatment, often there can be some time passed between the negligence and the loss. This allows for more scope when considering secondary victim claims.

Kate has advanced and successfully concluded various secondary victim claims including a claim by a daughter after witnessing her mother shortly after death following a fall from a bed and a claim by two parents and a close aunt in a claim for the mis-diagnosis death of a child from sepsis.

If you have any questions in relation to this article or have any other Personal Injury related queries please contact Kate Campbell Gunn on 0121 733 4314 or email kcampbell-gunn@wilkes.co.uk.

Our Personal Injury Team are on hand and working across both our Birmingham & Solihull Offices. In light of the current situation surrounding COVID-19 The Wilkes Partnership Solicitors are offering a complimentary, no obligation initial consultation designed to help you understand any issues facing you or your business and help you map out the best route forward.

To take advantage of this offer please call 0121 733 4303 or email helpline@wilkes.co.uk

In this video Ann-Marie Aston, Partner & Court of Protection Lead and Sophie Fenn, Associate Solicitor at Wilkes answer some frequently asked questions about The Court of Protection and Lasting Powers of Attorney.

If you have any questions in relation to any matter arising from this video update please contact aaston@wilkes.co.uk or call us on 0121 233 4333.

As part of our COVID-19 Helpline & Resource Centre we are offering a no cost, no obligation, initial consultation to businesses and individuals affected by COVID-19. Please email helpline@wilkes.co.uk to take advantage of this offer or call us on 0121 733 4303.

In this video Kevin Lynch, Head of the Probate Litigation team at Wilkes answers some frequently asked questions around probate litigation including the Inheritance Act and Caveats.

If you have any questions in relation to any matter arising from this video update please contact klynch@wilkes.co.uk

For the duration of the coronavirus pandemic, a large number of working people in the UK have seen their income decrease and the future of their jobs uncertain. This has been a particularly unsettling time for those who are self-employed who do not have the protection of an employer to lean on in this time of need.

As of 13 May 2020, the government has launched a significant support package to help self-employed workers known as the ‘Self Employed Income Support Scheme’ (SEISS).

The SEISS scheme allows for self-employed workers to apply for a grant worth 80% of their average monthly trading profits to help them cope with the financial impact of coronavirus. This is averaged over the last 3 tax years and subject to a maximum of £7,500 per month.

The rules for working out average pay are complicated. But if you are potentially eligible for the grant HMRC will make contact directly and invite those who qualify to submit a claim. HMRC will also work out your average monthly profits for the purposes of the scheme.

The SEISS scheme is now a part of package of measures target to assist the self-employed. Those measures include:

  • Suspending the minimum income threshold to gain access to Universal Credit
  • Deferring Self-Assessment income tax payments
  • Deferring VAT payments
  • Emergency business loans in the form of:
    • the Business Interruption Loan Scheme
    • the Bounce Back Loan

HMRC estimates that 3.8 million self-employed workers could qualify under the SEISS scheme.There are useful on-line guidance notes produced by HMRC which you can read here.

There is also an online tool for self-employed individuals to check whether they are eligible.

Jas Dubb comments “The SEISS scheme comes as part of a raft of measures taken by government to try and stabilise the economic fallout from the COVID 19 pandemic.  Sensibly the government has had to look at the full spectrum of the UK workforce to provide targeted support to prop up the economy.”.

For any further guidance in relation to this update, or any other employment law related matter, please contact Jas Dubb on 0121 710  5929 or any member of the Employment Team at The Wilkes Partnership Solicitors at employment@wilkes.co.uk.

In this video Andrew Hasnip & Ellie Holland, Partners in the Private Client Team at Wilkes discuss with Helen Smart, Solicitor in our Corporate Team, the importance of a Solicitor drafted Will. Alongside this we also discuss how you can still make a Will in light of the current social distancing measures taking place due to COVID-19.

If you have any questions in relation to any matter arising from this video update you can contact Andrew Hasnip on 0121 710 5830 or ahasnip@wilkes.co.uk or Ellie Holland on 0121 733 4334 or eholland@wilkes.co.uk.

As part of our COVID-19 Helpline & Resource Centre we are offering a no cost, no obligation, initial consultation to businesses and individuals affected by COVID-19. Please email helpline@wilkes.co.uk to take advantage of this offer or call us on 0121 733 4303.

Here at Wilkes we remain open and ready to support you at this difficult time. Our Family Law Team are offering telephone or video interviews that can take place within 48 hours of initial instruction during the lockdown period.

If you are experiencing difficulties in your relationship during the lockdown, www.relate.org.uk can provide you with advice and tips for keeping relationships healthy during self-isolation and social distancing. If you feel your marriage has irretrievably broken down and you would like a Divorce, you do not have to wait until the lockdown is over as ‘The Family Justice System is continuing to function as normally as possible despite the present pandemic’ – Sir Andrew McFarlane, President of the Family Division 19.3.20.

Our specialist team of solicitors will firstly attempt to resolve your financial issues via correspondence in the most constructive manner and if Court proceedings need to be issued, and this should only be done as a last resort. The First Directions Appointment (FDA) and the Financial Dispute Resolution Appointment (FDR) can be dealt with via Telephone or Video Call if the Court buildings are not open by then due to the government restrictions.

Also, if you are experiencing co-parenting issues, we can help you make new or revised plans to help you get through the next few months by making contact with the other parent on your behalf. Alternatively, you may wish to contact a family mediator to help improve the communication between you and work things out. Further guidance on this can be found here.

If necessary and as a last resort, we can assist you in the preparation and submission of an application for a Child Arrangement Order to the Court. CAFCASS are carrying out their initial safeguard checks in the usual way for the First Hearing Dispute Resolution Appointment (FHDRA). The FHDRA can be dealt with via Telephone or Video Call if the Court buildings are not open by then due to the government restrictions. All interviews with the parties, professionals and children are being undertaken remotely.

If you require any help or advice in relation to any of the above please contact Jackie Lee on jwlee@wilkes.co.uk or 0121 784 4443.

 

 

 

In this video Aaron Keene, Partner & Head of the Family Law Team at Wilkes discusses with Helen Smart, Solicitor in our Corporate Team, some important updates in relation to Family law in light of COVID-19.

If you have any questions in relation to any matter arising from this video update you can contact Aaron Keene on 0121 710 5947 or abkeene@wilkes.co.uk.

As part of our COVID-19 Helpline & Resource Centre we are offering a no cost, no obligation, initial consultation to businesses and individuals affected by COVID-19. You can also stay up-to-date with our latest legal updates by clicking the button below.

The evolving situation surrounding COVID-19 is causing unprecedented disruption to businesses and individuals around the globe. Every business is having to make swift and decisive decisions on a daily basis to protect jobs and ensure the future success and ultimately the survival of their businesses.

Being an owner-managed business ourselves we are feeling the impact in the same way as many of our clients. At times like these business owners and leaders must pull together to proactively plan a sustainable route forward.

Our lawyers are working around the clock to service clients, providing them with proactive advice across the full spectrum of legal services.

COVID-19 Helpline

With this is mind we are offering clients a no cost, no obligation, initial consultation designed to help you understand any issues facing you or your business and help you map out the best route forward.

To take advantage of this offer please contact our COVID-19 Helpline which will be manned Monday – Friday between the hours of 9am-5pm.

Calls made outside of these hours will go to voicemail and a member of the team will be in touch as soon as possible the next working day.

Once your initial requirements have been identified, we will then schedule a convenient time for your consultation with the relevant legal specialist.

Please call 0121 733 4303 or email helpline@wilkes.co.uk

Resource Centre

Our newly launched COVID-19 Resource Centre is there to provide you with our latest thinking and commentary on issues relevant to you and your business.