High Court Clears “Right-to-Die” Case

The High Court has ruled that a case regarding a man’s wish to be allowed to die at a time of his choosing should be heard.

Tony Nicklinson, 58, has "locked-in syndrome" following a stroke in 2005.  This condition leaves sufferers paralysed but with fully functioning minds.  Mr Nicklinson is unable to communicate with others without the use of specially adapted equipment.

He is unable to carry out his own suicide and so wishes to obtain a ruling that any doctor that helps him end his life will not face criminal charges.

The application was opposed by the Ministry of Justice on the ground that it would "change murder law", but the judge's ruling means that Mr Nicklinson's case will go to a full hearing, where medical evidence can be heard.

Budget Bullets for Private Clients

The Chancellor’s Budget this year was set in the context of mixed economic data and business confidence reports.  The economy continues its sluggish course, aided by a softening of the emergency klaxon sounding over the Euro…although for how long remains to be seen.  With uncertainty abounding, the Budget was never going to be radical and was always destined to be something of a box of bits.  The Chancellor confirmed his intention to follow his current path of deficit reduction by cutting both government expenditure and taxation.

Although careful leaking of some of the major measures ensured that surprises were few and discussion beforehand was dominated by the political controversy surrounding the 50p tax rate, the devil (and interesting bits) are, as always, in the detail.

Having stated that tax evasion and aggressive tax avoidance are ‘morally repugnant’, it was no surprise that the technical bulletins accompanying the Budget were replete with anti-avoidance proposals.  A ‘General Anti-Avoidance Rule’ (GAAR) is set to be introduced in 2013.

Before you undertake any tax planning or mitigation exercise, take professional advice.


Expensive properties
The ‘mansion tax’ applicable to expensive properties held in offshore companies was extensively leaked in advance, but punitive Inheritance Tax (IHT) and Capital Gains Tax measures are also on the way, as is an ‘annual charge’.

Avoidance Schemes Closed
Clearly worried that a Budget measure had been leaked, the Government announced yesterday that, with immediate effect, it was taking measures to prevent two schemes, one involving property losses where there are agricultural connections and the other involving the misuse of post-cessation relief.

Disclosure of Tax Avoidance Schemes
A consultation is being launched to extend the ‘hallmarks’ which set out when tax avoidance schemes must be notified to HM Revenue and Customs (HMRC). From 2013, the identities of dishonest tax agents will be subject to publication, as well as penalties being levied.

Summary of Changes Affecting Private Individuals

Child Benefit
This will be earnings-related, being removed entirely where one parent earns more than £60,000.

Personal Allowance
This will rise to £9,205 for the 2013/14 tax year, an increase of £1,100 compared with 2012/13.

After 6 April 2013, age-related personal allowances will be (in effect) abolished over time for persons not already in receipt of the allowance: it will subsequently be ‘aligned with the personal allowance’.

Basic and Second State Pension
A ‘single tier’ state pension is to be set, based on contributions. This will be set at basic rate with additions based on contributions (and at the whim of the Government). A consultation is due to start this spring.

The existing tax system is to be reformed in 2013. Current HMRC guidance applies until then and the payment by non-doms to use the remittance basis for the 2012/13 tax year remains as announced in the 2011 Budget.

Tax Relief Exploitation
The Government will introduce a limit on all ‘uncapped income tax reliefs’, so that no-one will be able to claim more than £50,000 of reliefs, or 25 per cent of income if this is less. This will not be extended to those reliefs that are already capped, as to do so would reduce the amount of support the tax system gives, for example, to enterprise and pension contributions.

Enterprise Investment Scheme (EIS) and Venture Capital Trusts: Increases to Thresholds
The EIS annual investment limit for individuals will be increased to £5 million from 6 April 2012. ‘Business angels’ are the likely beneficiaries of this change.

VAT on Listed Buildings
The exemption from a charge to VAT for alterations to listed buildings is to be abolished, adding 20 per cent to the cost of such alterations.

Company Vehicles
The multiplier is being increased from £18,800 to £20,200, and the percentage of the list price that is taxed is also increased. The differential for diesel cars is being abolished so a company car becomes more expensive, but one running on petrol relatively more so.

Trading Through a Company
If you earn your living by trading through a company, you may have a shock in store.  The Government is introducing a package of measures to tighten up on avoidance through the use of personal service companies.  It is consulting on proposals which would require office holders/controlling persons who are integral to the running of an organisation to have PAYE and NICs deducted at source.

Holiday Caravans
Sales of static holiday caravans not designed for year-round occupation will be taxable at the standard rate of VAT from 1 October 2012.

There is to be a clampdown on IHT avoidance through the use of offshore trusts by non-domiciled individuals. The changes will ensure that any reduction in the value of a person’s estate as a result of the arrangements is charged to IHT.

If any of the items in this bulletin apply to you, please get in touch. The end of the tax year is 5 April for individuals and 31 March for companies.

The information is intended for general guidance only. It provides useful information in a concise form and is not a substitute for obtaining professional advice.

When could “I do” mean “I don’t”?

When could a couple go through a proper marriage ceremony in this country and still be unmarried under British law?

The obvious answer is if one of the couple was already married to someone else.  But did you know that a British marriage is also not valid if the couple are already legally married to each other?

The court recently ruled that a couple who had married in this country but who later separated were not married at all.  Why?  Because, by the time of the marriage, they had already legally married in the USA.  When they subsequently divorced in the USA, they ceased to be married, because their later purported marriage in the UK was not valid.

The judge in this case was critical of those who wish to engage in multiple marriages.  So, if you are tempted to 'get married’ in more than one country, it usually makes sense to stop short of going through a second ‘full’ marriage.

A brief introduction to Lasting Powers of Attorney

Lasting Powers of Attorney (LPAs) were introduced in 2007, when the Mental Capacity Act 2005 came into force.  There are two types of LPA:

- Property and Affairs LPAs, which have taken the place of Enduring Powers of Attorney, and

- Health and Welfare LPAs, which are a legally binding alternative to a Living Will or Advance Directive.

A power of attorney is legally binding document that allows someone else to make decisions on your behalf.  LPAs are a particular type of power of attorney that continue to be valid even if the Donor has since lost capacity.

When setting up an LPA, you must nominate at least one attorney, but you can have more if you wish. If you do have more than one attorney, you must decide whether you want them to act together, separately, or together for some matters and separately for others. You can also, if you wish, appoint a replacement if your original choice of attorney is no longer able to act on your behalf.

Creating an LPA involves the completion of forms that must then be registered with the Office of the Public Guardian, where the application will be checked.  Current waiting times are around nine weeks and there is a six-week period during which anyone may object to the LPA.  You can complete the application yourself, using forms available on the Directgov website, but in most cases, particularly if there are any complications, it is advisable to apply through a solicitor.  This is particularly important if you have been unwell and there is a possibility that someone might question your mental capacity to make an LPA.

LPAs may be set up to allow your designated attorney(s) to take decisions on your behalf in matters of property and financial affairs or in matters relating to your health and personal welfare. For instance, you might want someone to manage your bank account on your behalf, or to appoint someone who understands your wishes in this regard to take decisions about your health treatment.

Current registration fees are £130 for each LPA. If you wish to register a health and welfare LPA and a property and financial affairs LPA, the total fee would therefore be £260, not including any professional fees if you apply with the help of your solicitor. The £130 may be waived if you are on income support, jobseeker’s allowance, or certain other benefits.  There are also discounts for those on low incomes.

Various safeguards are built into the system to prevent anyone being pressured into an LPA against their wishes. An independent person must act as a ‘certificate provider’. This person must either have known the person making the LPA for at least two years or be a professional, such as a solicitor or doctor and they must sign the application forms to verify that the person making the LPA has not been pressured into taking out the application.

An LPA may only be used once it has been registered with the Office of the Public Guardian.  Depending on how it is drafted, a Property and Affairs LPA can be used whether or not the Donor has capacity to make decisions for himself.  Conversely, a Health and Welfare LPA can only be used if the Donor has lost capacity.

At Armstrongs, we have state-of-the-art software that enables our clients to start making their LPAs online from the comfort of their own home, if they so wish.  We then meet with our clients to go through the documents to make sure that it reflects their wishes and to then sign them.  Please contact us if you would like more information.

Court of Appeal hears “Three Parent” Case

A gay man who acted as a sperm donor on two separate occasions, so that his ex-wife could have children with her long-term lesbian partner has found himself in the Court of Appeal, after he decided to renege on his initial agreement not to seek parental rights over the children.

After the Family Court allowed him the right to visit the children - who are now aged 10 and 6 - for five hours each fortnight, the couple bringing up the children appealed against the decision, claiming to feel ‘bitter and betrayed’ as a result of his conduct.  They gave evidence that had they known he would change his mind, they would have sought an anonymous donor.

In summing up the case, The Hon Mr Justice Hedley commented on his concerns for the emotional well-being of the children involved and that it was important to recognise that these sorts of arrangements are becoming more common and that is essential to avoid imposing conventional parenting models.  He ordered that the biological father and his partner are to continue to have contact with the children.

The full case report can be found here.

Discrimination Law Trumps Religious Convictions

The Court of Appeal has confirmed a High Court decision that a Christian couple who refused to allow a homosexual couple to share a bed at their hotel had unlawfully discriminated against their guests.

The hotel owners habitually refused double-bedded accommodation to unmarried couples on religious grounds.  When the homosexual couple, who are registered civil partners, sought a room for the night, they were also refused.

The Court confirmed that if a person wishes to run a business, they must do so in accordance with the law, no matter what their individual personal beliefs may be.