One minute with David Whittaker, partner at Mishcon de Reya.
What’s keeping you busy at work?
I have just finished scoping out a piece of advice on wealth holding structures for a client who co-founded a leading algorithmic firm that specialises in cryptocurrency trading. I remember in 2017 the first time I advised a client who was involved in cryptoassets and, whilst there is at least greater clarity from HMRC now on the UK tax treatment of cryptocurrencies than there was then, this is still very much a developing but exciting space to advise on.
To give a flavour of the eclectic nature of my practice, last week I was pitching to an UHNW global family on restructuring their trusts across Liechtenstein, Bermuda and Canada and (separately) advising a Saudi patriarch on implementing family governance mechanisms and succession planning. I love the diversity of the clients I work for, and this is one of the reasons I chose to become a wealth management lawyer.
What do you know now that you wish you’d known at the start of your career?
That it is not appropriate to wear a white tie with a blue shirt with a white contrast collar (as I once did to an interview)! Sartorial faux pas aside, I wish I had started curating my little black book much earlier in my career: having recently moved to Mishcon de Reya, I have a renewed appreciation for the power and the value of the client and intermediary relationships that I have cultivated over the years.
Are there any new rules that are causing a particular problem?
The introduction of the new register of overseas entities that own UK property is causing a lot of concern within our industry, with critics claiming it will deter many foreign investors from purchasing real estate in the UK. Whilst in principle this new register seems like a radical change that could shake up the UK property market, its likely impact on most foreign investors may in fact be more moderate than the hysteria would suggest for several reasons.
First, because most well-advised UHNW individuals have been purchasing UK residential property in their own name for a number of years and de-enveloping legacy structures following the introduction of ATED in 2013 and the erosion of the UK inheritance tax and capital gains tax advantages that offshore corporate envelopes used to confer.
Second, the use of an overseas entity that is designed to disguise the ultimate beneficial ownership of the UK property will be within scope of category D of the DAC 6 mandatory disclosure regime – therefore, the introduction of a register is likely to largely impact existing structures only as new property purchases are unlikely to be structured in a way that gives rise to this reporting.
Third, because we are likely to see publicly accessible beneficial ownership registers in most of the British Overseas Territories by the end of 2023 anyway, in a further move towards global transparency.
And fourth, because the government has confirmed that an individual’s usual residential address will not be publicly accessible on the register in any event.
Has a recent tax case caught your eye?
The Upper Tribunal’s decision in Allam [2021] UKUT 291 (TCC) is interesting for several reasons. It provides a helpful and clear analysis of the test determining whether a company’s activities are, to a substantial extent, trading activities; there’s a painful reminder around the need to ensure clients take appropriate steps to withdraw their qualifying business investment relief funding within the permitted grace period to avoid an inadvertent taxable remittance; and it also demonstrates the high threshold that HMRC needs to meet in order to prove a taxpayer has an intention to obtain an income tax advantage in order for the transactions in securites rules to apply.
You might not know this about me but...
I have three young children who keep me pretty busy, but in my spare time I like to do triathlons and I’m a keen golfer. It may not be a coincidence that both of these sports involve spending a lot of time out of the house.
One minute with David Whittaker, partner at Mishcon de Reya.
What’s keeping you busy at work?
I have just finished scoping out a piece of advice on wealth holding structures for a client who co-founded a leading algorithmic firm that specialises in cryptocurrency trading. I remember in 2017 the first time I advised a client who was involved in cryptoassets and, whilst there is at least greater clarity from HMRC now on the UK tax treatment of cryptocurrencies than there was then, this is still very much a developing but exciting space to advise on.
To give a flavour of the eclectic nature of my practice, last week I was pitching to an UHNW global family on restructuring their trusts across Liechtenstein, Bermuda and Canada and (separately) advising a Saudi patriarch on implementing family governance mechanisms and succession planning. I love the diversity of the clients I work for, and this is one of the reasons I chose to become a wealth management lawyer.
What do you know now that you wish you’d known at the start of your career?
That it is not appropriate to wear a white tie with a blue shirt with a white contrast collar (as I once did to an interview)! Sartorial faux pas aside, I wish I had started curating my little black book much earlier in my career: having recently moved to Mishcon de Reya, I have a renewed appreciation for the power and the value of the client and intermediary relationships that I have cultivated over the years.
Are there any new rules that are causing a particular problem?
The introduction of the new register of overseas entities that own UK property is causing a lot of concern within our industry, with critics claiming it will deter many foreign investors from purchasing real estate in the UK. Whilst in principle this new register seems like a radical change that could shake up the UK property market, its likely impact on most foreign investors may in fact be more moderate than the hysteria would suggest for several reasons.
First, because most well-advised UHNW individuals have been purchasing UK residential property in their own name for a number of years and de-enveloping legacy structures following the introduction of ATED in 2013 and the erosion of the UK inheritance tax and capital gains tax advantages that offshore corporate envelopes used to confer.
Second, the use of an overseas entity that is designed to disguise the ultimate beneficial ownership of the UK property will be within scope of category D of the DAC 6 mandatory disclosure regime – therefore, the introduction of a register is likely to largely impact existing structures only as new property purchases are unlikely to be structured in a way that gives rise to this reporting.
Third, because we are likely to see publicly accessible beneficial ownership registers in most of the British Overseas Territories by the end of 2023 anyway, in a further move towards global transparency.
And fourth, because the government has confirmed that an individual’s usual residential address will not be publicly accessible on the register in any event.
Has a recent tax case caught your eye?
The Upper Tribunal’s decision in Allam [2021] UKUT 291 (TCC) is interesting for several reasons. It provides a helpful and clear analysis of the test determining whether a company’s activities are, to a substantial extent, trading activities; there’s a painful reminder around the need to ensure clients take appropriate steps to withdraw their qualifying business investment relief funding within the permitted grace period to avoid an inadvertent taxable remittance; and it also demonstrates the high threshold that HMRC needs to meet in order to prove a taxpayer has an intention to obtain an income tax advantage in order for the transactions in securites rules to apply.
You might not know this about me but...
I have three young children who keep me pretty busy, but in my spare time I like to do triathlons and I’m a keen golfer. It may not be a coincidence that both of these sports involve spending a lot of time out of the house.
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