The draft legislation creating new taxes for UK residential properties worth over £2 million was published as promised on 11 December. The government remains determined to stop people from using 'non-natural persons' (or, as we prefer to call them, zombies) to hold high value residential properties, but there have been some significant changes from the original proposals set out in the Budget 2012. 

Although the government has softened its proposals a little - for example narrowing the definition of a zombie, the introduction of new reliefs for "genuine businesses carrying out genuine commercial activity", and an effective rebase to April 2013 for the new CGT charge - the main thrust of the proposals remain. This means that many existing structures will still be affected by the annual charge and the new CGT rules. 

Whether to slay your zombie now, slay later, or stay, will depend upon the particular circumstances of each structure. For new purchasers of property (particularly for investment properties) structuring remains available but there are many complications to understand.

You are invited to a workshop we are holding in January in conjunction with James Quarmby and Emily Osborne from Thomas Eggar. James and Emily will offer a practical guide with case studies and worked examples of how the draft legislation will affect the most commonly encountered structures. Collas Crill's own experts will also be on hand to advise on local issues.

Bring along your own zombie and pick their brains…

Collas Crill’s fiduciary team advises institutional trustees and high net worth individuals on all aspects of Guernsey and Jersey trust law.

The draft legislation creating new taxes for UK residential properties worth over £2 million was published as promised on 11 December. The government remains determined to stop people from using 'non-natural persons' (or, as we prefer to call them, zombies) to hold high value residential properties, but there have been some significant changes from the original proposals set out in the Budget 2012. 

Although the government has softened its proposals a little - for example narrowing the definition of a zombie, the introduction of new reliefs for "genuine businesses carrying out genuine commercial activity", and an effective rebase to April 2013 for the new CGT charge - the main thrust of the proposals remain. This means that many existing structures will still be affected by the annual charge and the new CGT rules. 

Whether to slay your zombie now, slay later, or stay, will depend upon the particular circumstances of each structure. For new purchasers of property (particularly for investment properties) structuring remains available but there are many complications to understand.

You are invited to a workshop we are running in January in conjunction with James Quarmby and Emily Osborne from Thomas Eggar. James and Emily will offer a practical guide with case studies and worked examples of how the draft legislation will affect the most commonly encountered structures. Collas Crill's own experts will also be on hand to advise on local issues.

Bring along your own zombie and pick their brains…

The Foundations (Guernsey) Law, 2012 came into force today, Monday, 7 January 2013.

It will be possible to create a Guernsey Foundation from Wednesday, 9 January 2013.

The Guernsey Registry has announced it will be accepting registration of Foundations from 9 January 2013 following confirmation of its fee proposals which are anticipated to be similar to those applicable to Guernsey companies.

Registration of foundations can only be undertaken by Guernsey licensed fiduciaries and, in anticipation of the Foundations Law coming into effect, the Guernsey Financial Services Commission has issued a consultation on a draft Code of Practice applicable to Foundation Service Providers. The Commission has requested comments on the consultation by 25 January 2013.

Read more about Guernsey Foundations: Guernsey Foundations - Best of Breed?

If you have any queries about the new law, the consultation or the registration and use of Guernsey Foundations, please do not hesitate to contact us:

Edward Stone, Consultant
T: +44 (0)1481 734271 E: edward.stone@collascrill.com

Angela Calnan, Senior Associate
T: +44 (0)1481 734233 E: angela.calnan@collascrill.com

Karen Farman, Senior Associate
T: +44 (0)1481 734295 E: karen.farman@collascrill.com

This guide outlines the legal and regulatory issues related to the carrying on of administration business in or from within Jersey. This is intended as a general guide, however, specific reference to fund structures is included.

This guide outlines the legal issues related to the appointment of a nominee director, subsequent to nomination pursuant to a shareholders agreement or otherwise, and the extent to which such director may be regarded as subject to the wishes of the nominator in addition to or in the place of his fiduciary duties.

This guide outlines the legal and regulatory issues related to the carrying on of investment advisory or management business in or from within Jersey. This is intended as a general guide, however, specific reference to fund structures is included.

The idea of introducing an anti-avoidance rule was first mooted by Gordon Brown but dropped, and then resurrected by the coalition in December 2010 when it asked Graham Aaronson QC to consider whether a general anti-avoidance rule (a GAAR) should be introduced in the UK. The Channel Islands take a zero tolerance stance on tax abuse and both the Jersey and Guernsey Financial Services Commissions have been effective in closing down abusive schemes. Jersey and Guernsey should therefore welcome the GAAR, says Edward Stone in this article, provided that once finalised and the promised guidance has been published, it does bring clarity and certainty to the often complex UK tax laws.

Although yesterday's Autumn Statement did not include any further details about the proposed new tax charges on UK residential property worth more than £2 million, the UK Chancellor did confirm that the draft legislation will be published next Monday 11^th December.

We are counting down the hours until then, eager to find out how 'non-natural' owners (or Zombies, as we have come to know them) of such high value residential properties will be affected. 

The new Stamp Duty Land Tax (SDLT) thresholds of 7% for individuals and 15% for Zombies on residential property above £2 million were introduced with effect from April 2012 but the proposed introduction of an annual charge and the extension of capital gains tax on such properties were the subject of consultation and will not bite until April 2013. 

Will the awaited draft legislation effectively slay all Zombies or only prevent new Zombies from being created?

We know that many of you have been reviewing your property portfolios in order to identify any residential property that might be worth over £2 million. You should also consider any properties that are just below this threshold (or potentially likely to exceed this threshold in the near future). 

Collas Crill's checklist is a tool to help you assess structures in which the UK property is held in a company with an overlying trust.

There is one for Guernsey: CHECKLIST FOR TRUST AND CORPORATE SERVICE PROVIDERS: HIGH VALUE UK PROPERTY RESIDENTIAL STRUCTURES

and one for Jersey: CHECKLIST FOR TRUST AND CORPORATE SERVICE PROVIDERS: HIGH VALUE UK PROPERTY RESIDENTIAL STRUCTURES

Earlier this year we presented a seminar with UK experts Thomas Eggar addressing the UK Government's proposed new taxes on high value UK residential property. The event covered the nature of the tax changes, effects on client structures holding property through an offshore company and how those might be mitigated.    

Look out for details of a follow up event in the new year, again in conjunction with Thomas Eggar, in both Guernsey and Jersey.

With our expertise in corporate, fiduciary and UK property law, Collas Crill are uniquely placed to assist you with property structuring - so please don't hesitate to contact us.

Although the Euro crisis appears to be more stable, it still appears far from resolved, and so stable, but critical. Jersey investors with Euro portfolios may therefore eye our Continental neighbours increasingly nervously, thinking the previously unthinkable: will the Euro survive? If not, of immediate importance amid the chaos will be what happens to debts they have or are owed in Euros, says Richard Holden.

You may often hear of someone waiting too long to bring a claim of unfair dismissal and then discovering the window of opportunity has passed, causing the claim to be “timebarred”. However, you rarely hear about not enough time passing before you can bring a claim. Simon Hurry looks at Article 73(1) of the Employment (Jersey) Law 2003, in which the remedy of unfair dismissal is not available unless the employee has been continuously employed for 26 weeks “ending with the effective date of termination”.

On 5 January 2012 the Royal Court of Jersey held In the matter of the Bird Trusts [2012] JRC006 that an outgoing trustee is normally under an obligation to hand over all documentation and information (including legal advice) concerning the administration of a trust to the new trustee. However, it should be noted that the Royal Court retains and exercises a supervisory discretion to refuse such disclosure; in such circumstances the onus is on the outgoing trustee to show why the normal rule should not apply.

In the matter of HHH [2011] JRC235 the Royal Court of Jersey discussed beneficiaries right to disclosure of trust documents from the trustee and also the settlor, contrasting the position of disclosure in civil proceedings. However, the Court also examined the question of disclosure between a private trust, with a limited group of beneficiaries, and an employee benefit trust with thousands of beneficiaries.

In the matter of HHH [2011] JRC235 the Royal Court of Jersey discussed beneficiaries right to disclosure of trust documents from the trustee and also the settlor, contrasting the position of disclosure in civil proceedings. However, the Court also examined the question of disclosure between a private trust, with a limited group of beneficiaries, and an employee benefit trust with thousands of beneficiaries.