Archive for November, 2013

£6 Million Divorce Impacts on Three Generations

In a telling example of divorce affecting multiple generations, the High Court has cut the Gordian knot of a former couple’s marriage in circumstances where almost the entirety of their wealth – totalling over £6 million – emanated from the generosity of the husband’s father. The husband, aged 62, had never worked in a conventional sense and had relied on financial support from his father, a successful property investor. The wife, aged 46, was a mathematics graduate who had a residual earning capacity although she had devoted herself to the care of their nine-year-old daughter. Both parties had been married before and the husband had three children by his previous wife. The assets of the marriage consisted largely of the husband’s £4 million interest in a Lichtenstein foundation established by his father before his death and the former matrimonial home, a ... Read more

Retired Couple in £5.5 Million Tax Residence Victory

Following a long and ‘hard-fought’ dispute with the tax authorities, a retired property mogul has managed to persuade the First-tier Tribunal that he should be relieved of a £5.5 million income tax burden on the basis that he was non-resident in the UK during the financial year in which he received a £29 million dividend. The businessman insisted that he was resident in Monaco when he received the dividend on the sale of property assets. However, HM Revenue and Customs (HMRC) was equally adamant that his heart had remained in England where his wife, as well as being a high-powered charity boss, was legendary amongst family and friends for her sumptuous home cooking. HMRC pointed to the couple’s regular returns to London during the relevant tax year for Jewish festivals and traditional Friday night suppers with their grown-up children as evidence ... Read more

‘Dream Home’ Builder Hit With Capital Gains Tax Bill

In a case which raised novel issues of potentially wide importance to homeowners and property developers, a man who decided that total demolition and re-building of his home would be a cheaper option than refurbishment must face up to a swingeing capital gains tax (CGT) liability. The First-tier Tribunal found by a majority that the old and new houses were entirely different and, although the man had ‘camped’ in the latter during the building work, it had never become his main residence. On that basis he was not entitled to principal private residence relief under the Taxation of Chargeable Gains Act 1992. The man had bought the house for more than £700,000 and it was not disputed by HM Revenue and Customs (HMRC) that he had intended to live there. However, he formed the view that it made financial sense to ... Read more

Hard-Working Couple Face £600,000 Tax Demands

A hard-working couple are facing retrospective tax demands totalling almost £600,000 after failing to persuade the First-tier Tribunal that they abandoned their UK residence when they departed to the continent in search of an easier life. The middle-aged couple had, from lowly beginnings, established a highly successful network of businesses involved in building, plant hire, property development and the use of a Grade I listed mansion as a restaurant and conference facility. The wife had suffered a breakdown due to over-work and that was the trigger for their decision to ‘tidy up’ their business affairs, escape the stress of it all and make a new life for themselves on the continent. They had built a villa in Portugal for themselves after departing through the Channel Tunnel in 2001. However, their hopes of a relaxed retirement in the sunshine were dashed when HM ... Read more