| Email to The Telegraph 7 November 2008 |
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Sir, Below is an email that I have today sent to the Head of the Technical Department at the Chartered Institute of Taxation, which you may find of interest. Yours faithfully, Ian Wadhams
"As a firm we have many international clients many of whom are understandably concerned about bank accounts held outside of the UK that are not covered by the FSA Compensation Scheme. I have one client in particular who is resident in the Isle of Man but has a UK tax liability for 2007/08 in respect of profits earned in London. I have not yet completed his tax return but I estimated his tax liability last year to be £31,500. He put funds aside to cover this liability with Kaupthing Singer & Friedlander Isle of Man (KSFIOM). There is no tax avoidance motive in his banking with KSFIOM, he lives and works in Douglas and the bank is near to his office. I am fairly sure that he would not have lost his UK domicile and so the bank account, indeed all of his assets, are potentially liable to IHT. When the Government froze the UK assets of Kaupthing Singer & Friedlander it included money belonging to KSFIOM. As a result KSFIOM has been put in to Administration. My client now faces the loss of these funds as he is not protected by the FSCS. Whatever the outcome he will certainly not be able to withdraw funds with which to pay his tax liability in January. What I would like HMRC to do in this case is give the client time to pay and waive both interest and surcharges (as they did in 2001 following the outbreak of Foot & Mouth Disease). This will certainly not be an isolated case and so we would prefer to approach the Government via the Technical Committee rather than making individual claims. I would be interested to hear your views on the subject." |