Category: Legal Updates

On 15 March 2023, Jeremy Hunt, Chancellor of the Exchequer, delivered the Spring Budget 2023 setting out his plans to decrease the inflation, grow the economy and ensure debt failing.

Below is a summary of the key announcements for the private client world.

Pension Tax Relief

•  The amount an individual can contribute tax free to their pension will increase from £40,000 to £60,000 per annum from April 2023.
• The Government has suggested that they are going to be looking to abolish the Lifetime Allowance that one can put in their pension in future Budgets. Currently the Lifetime Allowance is £1,073.100

Corporation Tax

•  Confirmation that the main corporation tax rate will increase from 19% to 25% from 1 April 2023.

Simplifications for Trust and Estates

•  Trusts and estates with income up to £500 will not pay tax on this income as it arises.
• The basic rate and the dividend ordinary rate will be removed from the first £1000 of discretionary trust income.
• Beneficiaries of UK estates will not need to pay tax on income distributed to them if the estate income was less than £500.
• The permanent changes will take effect from the 2024–2025 tax year.
• The Government intends to make inheritance tax changes to reduce reporting obligations for trusts.

Capital Gains Tax (CGT)

•  The Government has addressed tax avoidance whereby shares and securities in a non-UK company are acquired in exchange for securities in a UK company, that non-UK company will not be deemed to be located in the UK for tax purposes. This measure will apply to share exchanges carried out on or after 17 November 2022.
• The Government will change the rules that apply to transfers of assets between spouses and civil partners who are separating. The legislation will give more time to couples separating to transfer assets between themselves without incurring a possible charge to CGT.

Restriction of Charitable Relief to only UK Charities

• EU and EEA charities and Community Amateur Sports Clubs will not qualify for charitable relief from 15 March 2023. There will be a transitional period until April 2024 for EU and EEA charities that HMRC has previously accepted as qualifying for relief. UK charity tax reliefs and exemptions will be restricted to UK charities and Community Amateur Sports Clubs (CASCs).
• The taxes that are affected are income tax, CGT, corporation tax, IHT, stamp duty, SDLT, stamp duty reserve tax, ATED and diverted profits tax.

© 2023 GSC Solicitors LLP. All rights reserved.  GSC grants permission for the browsing of this material and for the printing of one copy per person for personal reference. GSC’s written permission must be obtained for any other use of this material. This publication has been prepared only as a guide to provide readers with general information on recent legal developments. It is not formal legal advice and should not be relied on for any purpose. You should not act or refrain from acting based on the information contained in this document without obtaining specific formal advice from suitably qualified advisors.

A new statement of changes to the UK immigration rules was published on 9^th March 2023.

The statement addresses some changes to working visa routes such as Skilled worker visa and Global Business mobility routes, the update on Electronic Travel Authorisations (ETA), the revamp of the Innovator visa route, changes to the Youth Mobility Schemes for New Zealand nationals, changes to EUSS scheme, and update on Global Talent visa routes.

Some key changes for consideration:

Innovator Founder route

From 13^th April 2023

• This route replaces the current Innovator visa scheme.
• It removes the £50,000 minimum funds requirement currently applied to make more flexible provision for founders with a genuine proposal.
• The changes also relax existing restriction on Innovator migrants – they can now engage in employment outside the running of their business as long as the secondary employment is in skilled roles
• The Start-up route will be closed to new applicants from 13^th April 2023.

Salary Changes

From 12^th April 2023

Skilled worker/Global Business Mobility

Minimum salary threshold for Skilled Worker visa’s is now £26,200/£23,580/£20960/£10.75 per hour respectively according to each relevant bracket.

Changes also applies where worker is sponsored to work in different hours each week:

If the applicant is being sponsored to work a pattern where the regular hours are not the same each week, resulting in uneven pay: 

 (a) work in excess of 48 hours in some weeks can be considered towards the salary thresholds, providing the average over a regular cycle (which can be less than, but not more than, 17 weeks) is not more than 48 hours a week; and

 (b) any unpaid rest weeks will count towards the average when considering whether the salary thresholds are met; and

(c) any unpaid rest weeks will not count as absences from employment for the purpose of paragraph 9.30.1 in Part 9 of these rules.  

 For example, an applicant who works a pattern of 60 hours a week for £12 per hour for two weeks, followed by an unpaid rest week, will be considered to work 40 hours a week on average and have a salary of £24,960 (£12 x 40 x 52) per year.

 The changes above will not affect companies that are already paying their employee salaries at above the on-going rate, and the update on the Innovator visa is definitely a welcome update.

Please speak to our Shareena Rahman for enquiry on how we can help you and your business in the UK.

© 2023 GSC Solicitors LLP. All rights reserved.  GSC grants permission for the browsing of this material and for the printing of one copy per person for personal reference. GSC’s written permission must be obtained for any other use of this material. This publication has been prepared only as a guide to provide readers with general information on recent legal developments. It is not formal legal advice and should not be relied on for any purpose. You should not act or refrain from acting based on the information contained in this document without obtaining specific formal advice from suitably qualified advisors.

The Chancellor of the Exchequer, Kwasi Kwarteng, delivered the Growth Plan 2022 on 23 September 2022. The document is setting out the plans to address energy costs and assist businesses and households.

Below is a summary of the key announcements for the private client world.

Income tax

•  The basic rate of income tax will be reduced from 20% to 19%.
• The additional rate of income tax (currently 45%) will be abolished, leaving a single higher rate of 40%.
• From 6 April 2023 the dividend ordinary rate will be reduced to 7.5%. The dividend upper rate will be reduced to 32.5%. The dividend additional rate will be removed.

 Stamp duty land tax

• The residential nil rate band will be doubled to £250,000.
• The level first time buyers start paying stamp duty will be increased from £300,000 to £425,000.
• First time property buyers will have access the relief when they buy a property costing up to £625,000 instead of £500,000.

National Insurance Contributions

• The 1.25% increase will be reversed from 6 November 2022.
•  Thehealth and social care levy set out in the Health and Social Care Levy (Repeal) Bill and will be cancelled.
• The NICs thresholds that were increased earlier in 2022 will be maintained.

EIS and VCT

• The government will continue to support the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT).

Seed Enterprise Investment Scheme (SEIS)

• The maximum amount a company can raise via SEIS investment will be increased from £150,000 to £250,000
• The gross asset limit will be increased from £200,000 to £350,000.
• The age limit for eligible companies will be increased from two to three years.
• The annual investor limit will be increased from £100,000 to £200,000.

Corporation tax

•  The rise in the main rate of corporation tax from 19% to 25% scheduled for April 2023 has been abolished.

If you have any questions, please do not hesitate to contact James Cohen directly on jcohen@gscsolicitors.com or 0207 822 2257

© 2022 GSC Solicitors LLP. All rights reserved.  GSC grants permission for the browsing of this material and for the printing of one copy per person for personal reference. GSC’s written permission must be obtained for any other use of this material. This publication has been prepared only as a guide to provide readers with general information on recent legal developments. It is not formal legal advice and should not be relied on for any purpose. You should not act or refrain from acting based on the information contained in this document without obtaining specific formal advice from suitably qualified advisors.

Background

All trusts with a UK tax liability have been required to register under the Tax Registration Service (TRS) since March 2018. Following the country’s adoption of the EU’s 5th Money Laundering Directive, the scope of the TRS has been expanded. As a result of the change, all existing UK trusts and some non-UK trusts, irrespective of whether the trust has a UK tax liability, need to now register with HMRC too, unless they fall within the list of excluded trusts.

What are excluded trusts?

 Excluded trusts include but are not limited to:

• charitable trusts;
• will trusts (for the first two years after date of death only);
• co-ownership trusts where legal and beneficial owners are the same person;
• bank accounts for minors;
• trusts for bereaved minors or adults aged 18-25;
• trusts of life policies paying out on death, terminal illness or disability;
• trusts imposed by courts or created by legislation.

It is important to note that bare trusts have not been excluded and, therefore, will be required to register.

What information is required?

The following information will need to be provided:

• trust name;
• status;
• details of assets;
• reference numbers of settlor, trustees and beneficiaries.

Who is the information available to?

 The register can be viewed by HMRC and law enforcement authorities.

What is the registration deadline?

 The deadline for registrations for non-taxable trusts is 1 September 2022.

Are there any other deadlines?

 Both taxable and non-taxable trusts will have 90 days to report any changes.  If the trust is taxable, a declaration that the trust is up to date needs to be made on an annual basis by 31 January.

What to do next?

 Trustees have a legal duty to comply with the HMRC reporting requirements. If you have any questions, please contact us, and we will advise on the above.

If you have any questions, please do not hesitate to contact James Cohen directly on jcohen@gscsolicitors.com or 0207 822 2257, or Alla Stepanyants on astepanyants@gscsolicitors.com or 0207 822 2222.

© 2022 GSC Solicitors LLP. All rights reserved.  GSC grants permission for the browsing of this material and for the printing of one copy per person for personal reference. GSC’s written permission must be obtained for any other use of this material. This publication has been prepared only as a guide to provide readers with general information on recent legal developments. It is not formal legal advice and should not be relied on for any purpose. You should not act or refrain from acting based on the information contained in this document without obtaining specific formal advice from suitably qualified advisors.

LinkedIn has listed Machine Learning Engineer as second place in this year’s 20 most in-demand job titles in the UK. Top locations for this position include London, Cambridge and Edinburgh, and employers are generally asking for around three years of experience. Interestingly, while Data Engineers and Back End Developer roles are also in demand, London and Manchester are the most popular locations.

If you’re thinking of relocating here, the UK is attractive for many reasons; here are just a few:

• The average base pay for a Machine Learning Engineer is £51,487, and it goes up to a six-figure salary for the right person (Glassdoor[1]).
• The UK is ranked third in the world for private venture capital investment into AI companies; in 2019, investment into the UK reached almost £2.5bn. It’s also home to a third of Europe’s total AI companies.
• More and more Unicorn start-ups[2] are making their presence felt in the UK, with three in four of the UK’s unicorn companies based in London. As this includes all 20 fintech unicorns[3], the demand for a skilled workforce couldn’t be higher.
• The UK offers the most flexible visa for specialists and highly skilled individuals. The traditional Skilled Worker visa route is readily available if you qualify to enter the UK market on a sponsored route.
• Alternatively, the Global Talent Visa offers great flexibility if you’re a highly accomplished ML engineer. A successful application will get you through a fast-track route to permanent residency status after three years and you wouldn’t be bonded to any employer throughout the visa duration.

The UK also offers a fantastic work-life balance for professionals with a family. With excellent commuting routes, you wouldn’t necessarily have to live in London. With access to an exceptional school system and being strategically located geographically, it’s a smooth ride for your family members if they relocate to the UK with you.

At GSC Solicitors LLP, we advise clients on all aspects of Immigration, UK tax, and UK employment law. If you’re considering moving to the UK for work, get in touch with our specialist immigration team to discuss your options. Call our Private & Corporate Immigration expert Shareena Rahman on +44 (0)20 7822 2222 or email srahman@gscsolicitors.com

[1] https://www.glassdoor.co.uk/Salaries/machine-learning-engineer-salary-SRCH_KO0,25.htm

[2] https://startupsoflondon.com/the-complete-list-of-unicorn-startups-in-the-uk-2021/

[3] https://www.beauhurst.com/research/unicorn-companies/

© 2022 GSC Solicitors LLP. All rights reserved.  GSC grants permission for the browsing of this material and for the printing of one copy per person for personal reference. GSC’s written permission must be obtained for any other use of this material. This publication has been prepared only as a guide to provide readers with general information on recent legal developments. It is not formal legal advice and should not be relied on for any purpose. You should not act or refrain from acting based on the information contained in this document without obtaining specific formal advice from suitably qualified advisors.

Why is the Register of Overseas Entities being introduced?

The UK government is introducing a ‘Register of Overseas Entities’ to achieve transparency of property ownership where any UK property is held by an overseas entity. The government is looking to disincentivise foreign criminals from using UK property to launder money while continuing to provide legitimate businesses with an opportunity to invest in the United Kingdom.

The deadline for registration will be 6 months from the commencement of this new law.

Who will the measures apply to?

 The measures will apply to the following foreign owners of UK property:

• any companies or legal entities governed by the law of a country or territory outside the United Kingdom
• individuals who have significant influence or control over the entity.

 What property will the measures apply to?

 The measures will apply to property bought since January 1999 in England and Wales and since December 2014 in Scotland.

 What will the Register do?

The ‘Register of Overseas Entities’ will:

• provide more information for law enforcement to assist with identifying criminals who use UK property to launder money
• require anonymous foreign owners of UK property to reveal their identity
• bring the regulations in line with those for UK companies owning property in the United Kingdom who are already obliged to disclose their beneficial owners to Companies House
• impose sanctions for non-compliance.

What will foreign property owners have to do?

 This regime is modelled on the “People with Significant Control” (PSC) regime which is already in place for UK Companies. Foreign entities will now have to register their beneficial owners at Companies House.

Beneficial owners include those individuals who own more than 25% of the shares or have significant influence or control over the foreign entity.

 What will the sanctions for noncompliance be?

 There will be civil sanctions in the form of financial penalties of up to £500 per day, restrictions on dealing with property as well as criminal sanctions for both owners and managing officers.

 Review

 Currently there are approximately 90,000 properties in the UK that are owned by offshore companies and this new legislation has been sitting on the shelve for 4 years. However, it has taken the crisis in Ukraine to put this now on the top of the political agenda.

It is doubtful how this new legislation will succeed in dealing with those criminals or individuals on the Sanction list who use UK property to launder their funds. The flaws of the new legislation is the same as those being faced by the current PSC regime for UK Companies. The main disadvantages being that it is still possible to create structures so that the real individual is hidden from the register and that there is no mechanism to check that the information that is provided is true.

If you have any questions, please do not hesitate to contact James Cohen directly on jcohen@gscsolicitors.com or 0207 822 2257.

© 2022 GSC Solicitors LLP. All rights reserved.  GSC grants permission for the browsing of this material and for the printing of one copy per person for personal reference. GSC’s written permission must be obtained for any other use of this material. This publication has been prepared only as a guide to provide readers with general information on recent legal developments. It is not formal legal advice and should not be relied on for any purpose. You should not act or refrain from acting based on the information contained in this document without obtaining specific formal advice from suitably qualified advisors.

The Home Office announced last week that they are shutting the ‘Golden visa’ Investor visa route with immediate effect. This is amid pressure on ministers to cut UK ties to Russia over the threat of invasion to Ukraine.

The UK investor visa was first introduced in 2008, and while the visa traditionally attracts Russian, Chinese and the Middle Eastern investors, it has recently attracted western investors post-Brexit.

In 2020, a total of 216 visas were issued; in 2019, the figure was 360. Figures show that mainland China was the largest source of successful applicants (23), followed by Russia (12), the US (10), Canada (8) and Hong Kong (5), Switzerland (2) and France (1).

The Home Office has announced that they will be making reforms to the Innovator route as part of the new points-based immigration system. It is expected that it will include an ambitious investment route that will effectively support the UK economy.

At present, the Home Office will be announcing the statement of changes that includes the new Global Business Mobility visa. It is expected that this route will offer a wide range of business-friendly visa route.

We will continue to monitor the development very closely and will ensure that our clients are kept up to date.

For any questions on Private Immigration to the UK or if you would to find out regarding your eligibility for UK visa routes, please contact our Immigration Advisor, Shareena Rahman on srahman@gscsolicitors.com or +44(0)207 822 2222.

© 2022 GSC Solicitors LLP. All rights reserved.  GSC grants permission for the browsing of this material and for the printing of one copy per person for personal reference. GSC’s written permission must be obtained for any other use of this material. This publication has been prepared only as a guide to provide readers with general information on recent legal developments. It is not formal legal advice and should not be relied on for any purpose. You should not act or refrain from acting based on the information contained in this document without obtaining specific formal advice from suitably qualified advisors.

In an effort to tackle the large rise in Coronavirus cases, the government has recently implemented Plan B, which includes measures to try and reduce the spread of the virus.

In relation to those working in offices, the guidance states that “Office workers who can work from home should do so”. However, there are some exceptions to that recommendation. For example, when it is necessary to access certain equipment to allow a person to do their job.

The government has clearly taken into account the toll that working from home has had on certain individuals, as the guidance states that employers should consider whether working from home is appropriate for those “facing mental or physical health difficulties, or those with a particularly challenging home working environment.”

What has not changed is an employer’s obligation to provide for a safe working environment, and employers should remember this if staff will be going into the office.

The law in this article is current as of 20 December 2021.

If you have any employment law queries, please do not hesitate to contact David Nathan at dnathan@gscsolicitors.com or on 020 7822 2247.

© 2021 GSC Solicitors LLP. All rights reserved. GSC grants permission for the browsing of this material and for the printing of one copy per person for personal reference. GSC’s written permission must be obtained for any other use of this material. This publication has been prepared only as a guide to provide readers with general information on recent legal developments. It is not formal legal advice and should not be relied on for any purpose. You should not act or refrain from acting based on the information contained in this document without obtaining specific formal advice from suitably qualified advisors.