January 30, 2023

Tax 101: Is Crypto Growing Up?

January 30, 2023/ Ruchelman P.L.L.C.

Crypto assets are rarely out of the news these days, and the last months have been no exception. The well-publicized troubles of the FTX exchange have made crypto headline news again. Depending on one’s point of view, The FTX bankruptcy will underscore everything that some people think about the subject matter. Some will say the FTX bankruptcy is exactly what was to be expected and confirms the view that crypto assets are some sort of Ponzi scheme. Others will say this serves to justify the need for much greater regulation. And still others will point to the rise in the power of the exchanges, bemoaning that crypto was created to avoid powerful monopolies. Nonetheless, crypto and its technology are here to stay in the financial world. In his Tax 101 article, Gary Ashford, a Tax Partner (non-lawyer) of attorneys Harbottle & Lewis LLP, London, explains that (i) regulation of exchanges and service providers and (ii) taxation on a global basis are in the works. Will they effectively bring normalcy to a “wild west” asset? Readers should stay tuned.

January 24, 2021

Continued D.A.C.6 Reporting Obligations After Brexit

January 24, 2021/ Ruchelman P.L.L.C.

At midnight on the December 31, 2020, the U.K. left the E.U., having secured a Free Trade Agreement (“F.T.A.”). The farewell headline grabber in the drawn-out departure process relates to D.A.C. 6, the Mandatory Disclosure Reporting (“M.D.R.”) rule that applies to Intermediaries. Beginning in 2021, the only reporting that will be required in the U.K. will involve the Category D Hallmark. It applies to fact patterns that are designed to hide ownership. Here, reporting will be required to maintain the integrity of the O.E.C.D. M.D.R. Gary Ashford, a Partner (non-lawyer) of Harbottle and Lewis L.L.P., London, explains the Category D Hallmark and the ongoing reporting requirements that apply to U.K.-based intermediaries after Brexit.

June 02, 2020

U.K. Mandatory Disclosure Regime (DAC6)

June 02, 2020/ Ruchelman P.L.L.C.

DAC6, adopted by the European Commission and enacted into law in the U.K., imposes a mandatory obligation on intermediaries, or individual or corporate taxpayers, to make disclosures to H.M.R.C. of certain cross-border arrangements and structures that could be used to avoid or evade tax. It also provides for automatic exchanges of information among E.U. Member States. Intermediaries know a cross-border arrangement is reportable when it meets certain hallmarks. In his article, Gary Ashford, a non-lawyer partner of Harbottle & Lewis, London, explains in plain English all the key terms and obligations. The European Commission has proposed that Member States defer the start date for reporting, however, the U.K. Government has not made any public announcement. This article is timely for those who are intermediaries in a reportable transaction.

July 30, 2018

U.K. Requirement to Correct

July 30, 2018/ Ruchelman P.L.L.C.

The “Requirement to Correct” (“R.T.C.”) rules for offshore tax affairs in the U.K. threaten steep penalties if noncompliant taxpayers at April 5, 2017, do not take action to correct the relevant noncompliance by September 30, 2018. In a detailed look at the R.T.C. rules, Gary Ashford of Harbottle & Lewis L.L.P., London, explains the ins and outs of the provisions, including (i) the definition of offshore noncompliance, (ii) covered taxes, (iii) penalties, (iv) the reasonable cause defense, (v) disqualified advice that cannot be reasonable cause, (v) the method that must be followed to implement a valid correction, (vi) the statute of limitations, and (vi) recent guidance from H.M.R.C. regarding last minute notifications by noncompliant taxpayers. The final date for completing a correction is December 29, 2018.

May 09, 2018

Failure to Prevent – The Future of Adviser Obligations

May 09, 2018/ Ruchelman P.L.L.C.

The concept of failure to prevent has grown from its roots in the U.S. Foreign Corrupt Practices Act and is making inroads into the responsibilities of tax advisers. The recent trend begs the question, do advisors have a duty to prevent the evasion or improper reduction of tax or to report the activity in advance? A team of international advisors looks at the evolution of obligations: Peter Utterström of Peter Utterström Advokat AB, Stockholm, looks at the origin of the concept. Gary Ashford of Harbottle & Lewis, London, looks at recently adopted legislation in the U.K. imposing strict liability on advisers to naughty clients. Lawrence Feld, Attorney at Law, New York, looks at its presence in the U.S. Swiss Bank Program of the Justice Department. Dick Barmentlo of Jaegers & Soons, Amsterdam, addresses a recent case in the Netherlands that imposes civil liability on a Netherlands trust company and its employees for lost taxes suffered by the Dutch tax administration.

April 28, 2017

U.K. Drops Changes to Non-Domicile Regime, But Likely Not for Long

April 28, 2017/ Ruchelman P.L.L.C.

After months of H.M.R.C. consultation, a new regime was put in place for non-domiciled U.K.-resident individuals (“Non-Doms”) on April 6, 2017, only to see the legislation pulled from Finance Bill 2017 on April 25. The snap election in the U.K. put consideration of Non-Dom taxation on hold when 72 of the 135 clauses were removed from the bill. This allowed Parliament to approve the legislation in two hours. Gary Ashford of Harbottle Lewis, London, summarizes the short-lived provisions and those that failed to be enacted on April 6. The proposed regime remains a work in process, and enacting legislation could be back on the table as early as this fall.

January 26, 2017

U.K. Criminal Penalties for Improper Tax Planning – Could You Be Effected?

January 26, 2017/ Ruchelman P.L.L.C.

New powers have been given to H.M.R.C. in recent legislation, and new criminal and civil penalties have been enacted as part of a massive legislative program designed to stop U.K. residents from participating in offshore tax avoidance and evasion schemes. Several criminal penalties are directed to advisory firms that facilitated tax offenses. In certain circumstances, advisory firms based outside the U.K. will be at risk of prosecution. Gary Ashford of Harbottle and Lewis L.L.P., London, and Stanley C. Ruchelman examine the new provisions.

September 29, 2016

Further Developments for U.K. Non-Dom Individuals

September 29, 2016/ Ruchelman P.L.L.C.

A significant claw back of benefits for individuals with Non-Dom status was first announced in the Summer Budget of 2015. In August, H.M.R.C. proposed implementing legislation in a follow-up consultation document. Specific benefits covered included inheritance tax for shares of envelope companies owning U.K. residential real property, deemed domicile rules for long-term U.K. residents, and several provisions to lessen the impact of these changes. Gary Ashford of Harbottle & Lewis, London explains.

December 15, 2015

U.K. Non-Dom Taxation – Where it is and Where it is Going

December 15, 2015/ Web Developer

With the 15-year limit enacted to remittance based tax rules for non-domiciled individuals resident in the U.K., we offer a series of articles this month addressing favorable tax rules for non-domiciled resident individuals in several countries. Gary Ashford of Harbottle and Lewis L.L.P. in London is the lead-off author, explaining the U.K. tax and immigration rules and suggesting strategies for the long-term non-domiciled resident who faces the 15-year ceiling. The ceiling becomes effective in 2017.