Money laundering and bribery

At first sight it may not seem that charities need to be concerned about money laundering, terrorism funding, bribery and such like but they are at threat and failure to observe these threats can incur severe penalties.

’A Report on Abuse of Charities for Money Laundering and Tax Evasion’ published by the Organisation for Economic Cooperation and Development in 2009 found that while tax rules vary around the world for charities, most nations give them a preferential tax status that helps them operate within their budgets. However, this preferential status can sometimes be misused by criminals.

Some charities work in areas or undertake activities which involve greater exposure to risks such as fraud, financial crime, extremism or terrorism. The Charity Commission for England & Wales provides the follow guidance on how trustees can assess the financial risks faced by their charities and what steps they can take to mitigate these risks:

  1. Charities: due diligence, monitoring and verifying the end use of charitable funds (Compliance toolkit chapter 2)

  2. Protect your charity from fraud and cyber crime (Compliance toolkit chapter 3)

Charities and the Bribery Act 2010

The

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All in? Court confirms when a settlement is 'made' for the purposes of excluded property (Accuro Trust (Switzerland) SA v The Commissioners for HMRC)

Private Client analysis: This case considered the meaning of 'relevant property' under the settlements regime of the Inheritance Tax Act 1984 (IHTA 1984) and, in particular, the time at which this definition is to be tested. The question arose as to whether the trustees of an offshore trust established by a non-UK domiciled settlor were subject to the UK settlements regime in respect of property added to the trust after the settlor became deemed domiciled in the UK, or whether they were exempt from such charges as the trust consisted solely of excluded property. The First-tier Tribunal (FTT) held that whether trust property is excluded property is based on the status of the trust at the time that it was established, not at the time that the property in question was added to the settlement. As a result, the trust in this case did consist solely of excluded property and no inheritance tax (IHT) charges arose as a result of either the ten-year anniversary or capital distributions. The FTT was also asked to consider whether their jurisdiction was appellate, or supervisory only. The FTT held that, while their jurisdiction was supervisory, the questions raised by the trustees were relevant in establishing whether HMRC had acted reasonably and that the outcome (ie that the paid IHT should be refunded and that no further IHT was due) would be the same in either case. Written by Katherine Willmott, senior associate solicitor at Foot Anstey LLP.

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