Editor's note: Boodle Hatfield’s Eleanor Sepanski takes a look at some of the things that will keep private client practitioners and wealth managers occupied in the closing months of the year.
The summer is over. The warm feeling of late summer, the Queen's Diamond Jubilee celebrations and the haul of Olympic medals will soon fade as reminders of continuing economic uncertainty and the deepening euro crisis once again dominate the headlines.
The legal landscape is also changing as the reality of "Tesco law" hits home, with the Co-Operative Bank, for example, set to become the largest provider of consumer legal services in the country. We also have the continued, and not always coherent, debate about tax avoidance and evasion.
But what is likely to occupy private client practitioners? The short answer is consultation. On its website, HM Revenue & Customs lists 18 current consultations, of which at least eight are of interest to the private client practitioner. At last count, a further nine open consultations are under way, led by HM Treasury. Again, not all of these are private client specific, but it will be interesting to see how many areas of private client practice are affected by current consultations.
The consultation approach to developing new legislation can work well. The development of the new statutory residence test is a good example of that. At other times, the process can lead to a good deal of uncertainty, most typically when changes are announced but implementation lags far behind. Whatever the outcome, it all takes up an enormous amount of practitioner time.
The tax avoidance/tax evasion debate will continue to attract public, political and media attention, not all of which will be helpful. The General Anti-Avoidance Rule consultation closes on 14 September and we also have the announcement on Disclosure of Tax Avoidance Schemes (DOTAS) to look forward to. The government proposes that the GAAR should apply to tax advantages arising from arrangements carried out on or after 1 April 2013.
The consultation paper clearly states that the GAAR is intended to be narrowly focused, targeting artificial and abusive schemes and that it is not intended to affect what it describes as “the centre ground of tax planning”. However, as matters stand there is no clear demarcation in the draft GAAR legislation to distinguish between the two ends of the spectrum. Instead, the current proposal is that the legislation will be backed up by HMRC non-statutory guidance which will not in itself be binding. It will be left to the courts to consider the guidance in the event of a dispute about the application of the GAAR and it may be a while before there is a reasonable amount of certainty on these issues.