For 16 years I have been a sole practitioner in Swains Lane with the aim of providing a City quality of tax service to my community. It is with great pleasure I am writing to say that with effect from 1st April 2021 I have joined Streathers Highgate LLP as a consultant. I can still be found at 6 Swains Lane and can still be reached on 020 7267 5010 or by email at either email@example.com or firstname.lastname@example.org
Tax is architecture. It is often the tax analysis that influences the way something is structured.
Tax is the one area of practice where law and accounting firms meet. Law firms offer tax advice because the best place for tax planning is during the drafting of the contract e.g. the lasting power of attorney finance example below. Accountants are often involved only with tax compliance and reporting: after the event disclosure.
Tax law has ‘blessed’ and ‘non-blessed’ routes. By this I mean those who draft our tax laws deliberately create paths which allow people to arrange their affairs in a way which attract less tax. For example, if you want to share assets with a long term partner, the law encourages you to get married or have a civil partnership in order to do this without paying Inheritance or Capital Gains Tax.
In my time as a sole practitioner the clients whose stories have upset me most are those who tried to mitigate the impact of Inheritance Tax by transferring part of their family home to their children in the hope they would survive the gift by 7 years. Given that for most people their home is their most valuable asset, HMRC has effective legislation to prevent such gifts achieving their objective even if the donor survives the gift by 7 years.
If the client wants to tax plan and involve their home (or second home) there are however 2 ‘blessed routes’. One is for the recipient to pay the donor a market rent until the donor dies/the property is sold. The second is if the donor and gift recipient ‘occupy’ the property together until the donor dies/the property is sold.
A similar area is gifts for tax planning purposes made by an attorney under a lasting power. This means the donor of the lasting power (‘P’) has (i) lost capacity; (ii) has surplus assets in excess of those reasonably needed to fund P’s care; and (iii) P’s attorney(s) wish to try and reduce P’s Inheritance Tax estate by making lifetime gifts. The Court of Protection (‘CoP’) has held that unless P has indicated in P’s lifetime an appetite/interest in tax planning/mitigation it isn’t the job of the CoP to sanction gifts with a tax mitigation purpose. If however in the lasting power finance P has indicated a wish that the CoP look favourably at an application by his attorney(s) to make such gifts the CoP can and will authorise them.
I think I am a rare breed. This is due to the way today (and for the last 20+ years) solicitors who specialise in tax law are trained. Law firm tax advisory work is dominantly a City speciality and training. Almost all these firms have shed their private client groups because for private clients professional costs are not tax deductible and the VAT is irrecoverable. In addition the firm has a conflict of interest if it acts for the controlling family/the founder/the family trusts and the ex-family owned now quoted PLC.
When I trained and worked in the City (1977-2005) we were schooled in both private client and corporate tax with an overlay of how our tax law applies to cross border money flows and investments owned by UK tax resident taxpayers. From 1990-2005 I was an owning corporate tax partner in a large City law firm.
My strength locally has been this familiarity with our tax system as it applies to individuals and other taxpayers including where there is a foreign element. It is a great pleasure to bring this expertise to Streathers; a firm I have known and worked with for a number of years. Should you want to get in touch my contact details are shown.
Consultant to Streathers Highgate LLP
Tel no: 020 7267 5010