Private Client Legal Updates (7 July 2021)

Published date28 July 2021
Subject MatterFinance and Banking, Litigation, Mediation & Arbitration, Tax, Family and Matrimonial, Debt Capital Markets, Financial Services, Family Law, Arbitration & Dispute Resolution, Trials & Appeals & Compensation, Income Tax, Wills/ Intestacy/ Estate Planning
Law FirmWedlake Bell
AuthorMs Sally Spicer and Jenny Cutts

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

Remittance basis and collateral in respect of relevant debts

HMRC has made a controversial change to its Residence, Domicile and Remittance Basis Manual ("RDRM") regarding collateral in respect of a "relevant debt". This relates to HMRC's previously stated view on the quantification (for remittance basis purposes) of foreign income and gains which are used as collateral for loans where the full value of the loan is remitted to the UK. The RDRM previously provided that the remittance would be capped at the level of the loan; however, this has now been changed so that, if the value of the collateral is higher, the taxable remittance is at the level of the collateral. However, another section of the RDRM still says the opposite. We understand that professional bodies are seeking clarification from HMRC. www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm35270

SDLT refunds

HMRC published updated guidance on 18 June relating to applications for refunds of overpaid Stamp Duty Land Tax ("SDLT"). This is relevant in respect of the higher SDLT rates for additional properties (where a taxpayer can apply for a refund of the higher rate element if their main home is sold/ gifted within three years) and the 2% SDLT surcharge for non-UK residents (where a refund claim can be made within two years if the taxpayer meets certain residence requirements after the purchase). The new guidance states that to process refunds quickly, HMRC will make the refund without checking eligibility; however, they have up to nine months to undertake a compliance check. If the refund is later found to be incorrectly paid, the taxpayer must pay it back with interest. Stamp Duty Land Tax online and paper returns - GOV.UK (www.gov.uk)

Divorce and death of a spouse before adjudication

Hasan v Ul-Hasan (Deceased) & Anor (Rev1) [2021] EWHC 1791 (Fam) is an example of where Private Client and Family law overlap. The case relates to spouses who had obtained a divorce in Pakistan but the wife later alleged that large sums of money were not disclosed in those proceedings. The wife brought proceedings under Part III Matrimonial and Family Proceedings Act 1984 to obtain a financial...

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