Churchill Tax Advisers Help IHT Planning For Indian Born Clients

This query related to inheritance tax planning and came from an Indian born high net worth individual living in the UK for over 30 years. The client had a substantial estate in India and the inheritance tax position from UK perspective was not clear on these assets. Having researched the issue, we were able to advise that the deemed domiciled rules do not apply for individuals born in India and three other countries. This meant that provided certain conditions are met, there would not be any UK inheritance tax on assets based in India. The interesting part is that there is no inheritance tax in India so effectively (with careful planning), the Indian based assets can be passed to the next generation without any inheritance tax. This particular law is not covered by UK’s tax legislation and the source had to be verified to a double tax treaty with India from almost 60 years ago! This can open doors for tax planning for many wealthy Indian born individuals that have been living in the UK for some time. There are some traps for capital gains tax but once again with careful planning, this can also be avoided.

Churchill Tax Advisers Advise On Structuring For A Large Development

This case came to us from a firm of accountants in London and involved a large property development project. The issues at hand were how to mitigate potential inheritance tax, capital gains tax and income tax implications for the owners. Recent changes in the tax legislation on using structures such as limited liability partnerships created further complexities. We were able to put together a structure, in light of the new legislation, whereby our clients could achieve lower income tax liabilities as well as capital gains tax and flexibility to mitigate potential inheritance tax liabilities. By seeking specialist advice prior to the commencement of the development project our client can have benefits in the short and long term. Had this advice not been taken at this stage, there could have been significant tax implications for making any alterations due to the rise in the value of the property subsequent to the development work.

Tax Fraudster Claims To Be Spy

Raymond Thomas,73, from Norfolk, made a claim he was a spy for the US Homeland Security to avoid HMRC prosecution.  Thomas was originally jailed in November 2017 for four years and eight months after the HMRC found he had stolen £1.6 million.

He told family and friends he was a spy and his business, Cambridge Computer Graphics (CCG), sold aviation radar systems to account for his lavish lifestyle.

After a £98,000 claim, the HMRC uncovered some discrepancies and Thomas said his work as a US spy meant he had to destroy all paperwork.  The HMRC checked with the US Department of Defense and Homeland Security where the invoices used were revealed as being forged documents.

On 24 June 2019, Thomas was ordered to pay back £616,551 and his wife, Susan Weston, 70, as ordered to pay £439,551, in three months.  If the amounts are not paid back the default prison sentences of five years for Thomas and four years for Weston will be activated.

The UK’s Largest Tobacco Factory Ringleaders Are Jailed

The UK’s largest illegal tobacco factory, producing 140 packs of cigarettes a minute has been stopped after a HMRC tax investigation. 

John Watson Snr, 47, Terence Jacques, 60, and Russell Haywood, 48, were the masterminds behind the £10 million fraud, have been sentenced to 14 years 6 months.

The tobacco factory was concealed in a farm unit in Crook, County Durham where HMRC found 24 tonnes of tobacco, 500,000 cigarettes, and products to make cigarettes.

The prison sentences handed out are as follows:

  1. John Watson Snr, 30/04/1972, of Ellison Street, Thorne, Doncaster, was found guilty of excise fraud and was sentenced to five years and three months in prison at Sheffield Crown Court on 25 February 2020.
  2. Russell Haywood, DOB 06/10/1971, of Intake Gardens, Barnsley, admitted excise fraud and was sentenced to four years and three months in prison at Sheffield Crown Court on 25 February 2020.
  3. Terence Jacques, 02/07/1959, of Howlea Lane, Hamsterley, Bishop Auckland, was found guilty of excise fraud and was sentenced to five years in prison at Sheffield Crown Court on 25 February 2020.

No Escape For Tobacco Smuggling Trio

8.5 million illegal cigarettes that was smuggled in window frames and laundry bags worth £2.8 million have been seized, destined for the UK. 

Three Lithuanian men, Andrej Jerofejev, 53, Vilmantas Simaitis, 48, and Martynas Nazaras, 38, have been jailed for 4 years and 9 months after being extradited back to the UK following a tax investigation by the HMRC.

The tobacco haul was found in a farm unit in Lincoln on 15 June 2017 with the investigation, extradition from Lithuania, and sentencing ending on 18 February 2020.

The sentences are as follows:

  1. Andrej Jerofejev, DOB 13/10/1964, of House 8, Flat 30, Giluzio St, Bilaite, Vilnius, Lithuania. Admitted to the Fraudulent Evasion of Excise Duty. Sentenced to 18 months in prison at Nottingham Crown Court on 22 October 2019.
  2. Vilmantas Simaitis, DOB 22/11/1971, of Dariaus ir Gireno, 1-10, Altyus, Lithuania. Admitted to the Fraudulent Evasion of Excise Duty. Sentenced to 21 months in prison at Nottingham Crown Court on 18 February 2020.
  3. Martynas Nazaras, DOB 19/08/1981, of Vyduno 27, Vilnius, Lithuania. Admitted to the Fraudulent Evasion of Excise Duty. Sentenced to 18 months in prison at Nottingham Crown Court on 18 February 2020.