HMRC powers and enquiries

FORTHCOMING CHANGE: On the 27 April 2023 Tax Administration and Maintenance Day, the government published a call for evidence on how HMRC’s information and data-gathering powers could be updated to enable digital transformation of taxpayer services, improve HMRC’s compliance capabilities, and reduce administrative burden. With a closing date of 20 July 2023, the call for evidence seeks views on, among other things: (i) how to reform and improve information and data-gathering from third parties, drawing on international best practice; (ii) opportunities to update HMRC’s third party information and data-gathering powers and safeguards; and (iii) improvements to the process by which HMRC issues information notices requiring a taxpayer or third party to provide information, data or documents.

In a related development (and following a consultation which closed on 12 October 2022, an announcement on 27 April 2023, the publication of draft legislation on 18 July 2023 and confirmation at Autumn Statement 2023) the Finance Act 2024 contains measures to require additional information from employers, as well as in personal, trustee and partnership tax returns, for the purpose of the collection and management of tax. These measures, which

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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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