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The Dog Ate Your Assets? HMRC Will Find That Hard to Believe
Property tycoon Scot Young has been jailed following a contempt of court judgement after his ex-wife's claim he did not disclose £400 million that should have been declared as part of their settlement. Young (pictured below) claimed the funds were lost in a Moscow property deal that went wrong.
I am sure I am not the only one, who when called upon in a crisis, can instantly locate:
- my elder daughter's gum shield in the three seconds before the coach leaves for national finals;
- my younger son's school shoe removed from the door step where it was carelessly left on atmospheric re-entry from a hard day at school and re-positioned by the family canine;
- my significant other's vitally important draft board paper;
- and all sorts of similar things.
But how is it that whenever I look for my keys/purse/mobile phone, the said item is never where I left it or has been moved by said elder daughter/younger son/significant other or eaten by the family canine?
I suspect that HMRC or indeed perhaps divorce lawyers often come across the same issues: one person always knows where the missing item is, but it is seldom the person who has mislaid it.
So in the absence of an omniscient but forgetful mother, just how difficult is it to lose or mislay one's possessions - a bank account or an entire house - without someone finding them?
To the layman, the obvious panacea might be the ubiquitous 'offshore trust' - always located in some exotic far-off tax haven, where the 'loser' (and in the context of one who intentionally places his assets beyond the reach of his creditors/about-to-be former spouse/tax authorities I use the term in more than one sense of the word) has no beneficial interest in the assets subject to the trust.
This means, fortunately for him, despite the loss, that these assets cannot be taken into consideration when totting up annual income or total wealth or assets available on divorce, so the 'fair and reasonable' amount of tax to be paid to HMRC or shared with the nearly-former spouse is magically, tragically reduced.
If only life were that simple. HMRC has a wide range of powers it can call upon, depending on what is being sought and why, to ascertain the amount of tax due and then to collect and, if necessary, enforce payment and similarly a broad range of measures it can take when tax fraud is suspected.
These abilities include search and seizure warrants and powers of arrest, not to mention the court's sanctions if the (non)taxpayer is found guilty, including spending time at Her Majesty's pleasure, a fate which can befall others who are unable to provide the court with an adequate explanation of the circumstance surrounding their loss.
Colleagues who practise family law have access to a similar armoury, albeit with different tactics and method of approach, as has been widely reported recently in the case of Scot Young. The end result is the same however: disclosure, then payment.
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In this new anti-tax-avoidance era, when so many tax reliefs have been withdrawn, I've heard that investing in a Business Property Renovation Allowance scheme is one of the few remaining good opportunities for maxing your tax position. Is it true that you can get up to 100 per cent tax relief on the amount invested? And what exactly are these schemes? How do they work? What are the upsides? Downsides?
In this climate, it is a relief to see one potentially attractive tax allowance come through unscathed from recent criticism
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Links to blogs we like
Long or Short Capital
The Wealth Report
Real Time Economics
Iain Dale's Diary
ITA Wealth Management
The Lesperance Letter