What is significant about the latest Special Commissioners' judgment on inheritance tax? Well, some people are saying that it devalues the wife's contribution to a marriage. If you want to read the judgment, it's here (as an aside, it doesn't appear to have come out last week as some suggest, but in February).

I found something else interesting.

Stephanie Phizackerley, the daughter of Dr Phizackerley whose arrangements were under dispute in the case, is a PwC partner.

She works in human resources, but also expatriate taxation, it appears. The firm confirmed she was the Phizackerley in the case, I should add, when we called them earlier.

Perhaps unsurprisingly, the firm is not offering a view on the judgment to the media.

The fact that she works in PwC tax is somewhat unlikely, but perhaps not surprising. I expect tax people challenge the taxman more regularly than lay people, simply because they know how.

I think Petri Manninen, who gave his name to the case on cross-border dividends and the tax credits accruing, was a tax adviser or lawyer. Are there any other well-known cases?

April 16, 2007 | Permalink | Comments (1) | TrackBack (0)

Some days you think that the things you write have an impact. Some days you wonder.

I wrote in June of last year that the government was considering ditching the taxation of foreign dividends and cutting down on interest relief to pay for it. The moves were part of a plan to meet the challenge of the European Court of Justice head on.

The same story appeared in the FT today on its front page. Saying not a great deal more than we said then, the piece has, apparently, driven the market into overdrive.

I read this on Bloomberg about its impact on the pound;

"The pound is getting support from this proposal which will free repatriated profits from taxation,'' said Paul Robson, currency strategist at Royal Bank of Scotland Plc in London. "It might be just a proposal at this point, but there's nothing the market loves more than a story like this. It gives people an excuse to buy the pound.''

And then this, also on Bloomberg;

The plan "is prompting pound buying against the dollar and euro,'' said Michiyoshi Kato, a senior currency dealer in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan's second-largest lender by assets. The pound may rise to $2 against the dollar in three months and 67.50 pence per euro in a week, he said.

Reuters is also in on the act.

All of which really makes you wonder how markets work. I tend to assume that most of the things I know about stocks, etc. are all priced in, and that it would ne unnecessary to trade on that basis. Maybe not.

A lesson for us all: if you want to beat the market, read Accountancy Age. Wait for the nationals to follow up, then take profits.

April 11, 2007 | Permalink | Comments (1) | TrackBack (0)

The tax credits row engulfing Gordon Brown is quite absorbing from a tax perspective, and quite frustrating at the same time.

I keep reading for instance that the raid couldn't have made any significant difference to pension funds, because they lost £250bn of value in the bear market, and this was only £5bn.

You'd need £100bn of assets to create a £5bn income, as this was, at a 5% interest rate, so it is fairer to treat it as a £100bn raid. Which makes it pretty significant, I'd say, as a factor in the 'pensions crisis' (itself a scarcely comprehensible amalgam of different issues in any case).

What I found most intriguing was Geoffrey Robinson, the former paymaster general, saying on Newsnight last night that the Revenue were desperately keen on the idea. He claimed the 'top man' at the Revenue had wanted to do away with the credit 'for 20 years.'

I can't at the moment get any closer to determining who he was referring to. It can't have been Sir Nick Montagu. Sir Nick was only appointed to the top job at the Inland Revenue in June of 1997, before which he had been at the Cabinet Office. If he'd been harbouring issues about ACT all through his time at the Cabinet Office and before that at the Department for Transport, I'd be surprised.

We can't recall here who was the boss before Sir Nick (journalists have short memories) so any help would be appreciated on that front. Or was it someone else at the Revenue?

I think it's time to start a witchhunt for the irresponsible official. In the nicest possible way, of course.

April 3, 2007 | Permalink | Comments (1) | TrackBack (0)