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DECEMBER 2010

2010 has been a year of considerable instability – in the economy, in government, in tax laws and in relationships. There is no sign that this uncertainty will decrease in 2011.  Where there is instability, we need to provide as much flexibility as possible to adjust to circumstances and to anticipate potential problems. To that end, the Private Client team recommends:

• With the confidence of recent judicial backing, consider pre-nuptial agreements.  If it is too late for that, then post-nuptial agreements can be made within a year or two of the marriage.
• Trusts still have their place in providing flexibility for both families and businesses while giving tax advantages.
• Make sure you have in place up to date Wills.  Disputes over Wills (or the lack of them) are hugely on the increase.
• Maximise the use of valuable tax reliefs such as business property relief and exemptions such as regular expenditure out of income exemption.
• Put in place Lasting Powers of Attorney to allow for proper management of your affairs in case you should become incapable of looking after yourself. These have proven so popular in 2010 that the Office of the Public Guardian is currently taking twice as long as intended to register Lasting Powers of Attorney!
• Review opportunities open to you for inheritance tax planning.
• There are also several legislative changes that may have an effect in 2011 and any possible impact of these needs to be considered.
  

Introduction of the new Charitable Incorporated Organisations (CIOs)

It will be possible to opt to be registered with the Charity Commission as a CIO from early 2011 and this will significantly affect the options available to new and existing charities. CIOs have been introduced as a result of the need for a charitable organisation that has a separate legal entity and with the benefit of limited liability but without the duplication of reporting requirements which was increasing administrative costs significantly for those charities set up as companies limited by guarantee. It will be possible to convert an existing charity to a CIO and we would be very happy to advise on this.

Effect of the new regulations on tax avoidance schemes

The Tax Avoidance Schemes (Information) (Amendment) (No.2) Regulations 2010 come into effect on 1st January 2011 and provides increased disclosure requirements for both promoters of and introducers to certain tax avoidance schemes which are covered by the disclosure regime. Changes include increased powers to require promoters to provide HMRC with lists of clients partaking in one of their schemes with the aim of shutting down schemes more quickly.

Impact of the Draft Finance Bill 2011 on pension provisions

The Finance Bill 2011 will be published on 31st March 2011 and is expected to make significant changes in relation to annual and lifetime allowances, anti-avoidance schemes and annuities.

So in the light of all these changes there has never been a better time than your Christmas break to sit down and review the arrangements you currently have in place!

If you would like any further information about the issues raised in this article please contact Ian Bradshaw or any other member of Goodman Derrick LLP’S private client team on 0207 404 0606.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice.