Find out how some of our Employer Partners are responding to the challenges presented by COVID-19.
Kimberley Martin TEP, Director at Worrall Moss Martin Lawyers and a member of STEP’s Digital Assets Special Interest Group (SIG), details the history and latest developments in electronic wills and remote witnessing by audio-visual link, as a result of the COVID-19 pandemic, in Technology and wills – The dawn of a new era (COVID-19 special edition). The pandemic has brought the topic of electronic execution and remote witnessing by audio-visual link of documents to the forefront of discussions around the world, and this paper provides practical tips and considers what the future holds for advisors.
- Technology and wills – The dawn of a new era (COVID-19 special edition)
- Webinar: Remote witnessing: will it persist once we no longer have to socially distance?
STEP's Philanthropy Advisors Special Interest Group (SIG) has developed a reference guide for STEP members containing timely and relevant information on mitigating the impact of COVID-19 through philanthropy.
STEP's Business Families Special Interest Group (SIG) has developed a reference guide for STEP members containing operational, governance, tax and succession points of consideration for discussion with business family clients to help mitigate the impact of COVID-19.
Global industry developments
The latest global developments in response to COVID-19 affecting trust and estate practitioners, as reported in the Industry News Digests
Trusts and estates industry is surviving COVID-19 pandemic, STEP survey finds
Confidence is beginning to return to trusts and estates practitioners worldwide, with overall sentiment concerning the future much more positive than negative, according to a survey of STEP members.
OECD guidance on COVID-19-impacted tax residence updated
New OECD guidance re-affirms its view that an individual who becomes stranded in a foreign country may become tax resident there under that country's domestic rules but is unlikely to be resident there under the tie-breaker provisions of a double tax agreement (DTA). Individuals who have returned home from assignment overseas may regain their original residency under domestic law, but the DTA is likely to determine that they continue to be resident overseas. Jurisdictions are not obliged to follow the OECD guidance.
India’s tax authority refuses general residency exemption for stranded individuals
India's Central Board of Direct Taxes (CBDT) has issued a circular rejecting calls for a general exemption from tax residency determinations for individuals stranded in the country due to the COVID-19 pandemic. It says that granting such relief will lead to some individuals not paying any taxes in any country. However, CBDT is providing an online form so that individuals at risk of double taxation during financial year 2020/21 can apply for relief, if they file by 31 March 2021.
Bill extends emergency controls over foreign investments in New Zealand
New Zealand's Overseas Investment Amendment Bill (No 3) has passed its third parliamentary reading, preventing foreign investors buying ‘strategically important assets’ whose values are depressed by the COVID-19 crisis. It amends the emergency powers in the Urgent Measures Act passed in May 2020, limiting the national interest tests to acquisitions of major infrastructure, media companies and farmland and removing consent requirements for small, low-risk changes in shareholdings.
- New Zealand government
- New Zealand parliament (text of Bill)
- New Zealand government (May 2020 legislation)
Extra guidance on COVID-related international tax issues
The Canada Revenue Agency (CRA) has published additional guidance on COVID-related issues of tax residency for individuals, permanent establishment for companies and cross-border employment income for Canadian- and US-resident employees. Separately, the OECD has updated its comprehensive table of country tax measures adopted in response to the pandemic.
CRA unable to provide relief in case where COVID-19 has caused delays
The Canada Revenue Agency (CRA) has said it would be unable to allow more time for the application of subsection 164(6) of the Income Tax Act, dealing with loss carrybacks, where the administration of the estate has been held up due to COVID-19. For the provision to apply, the executor must dispose of the estate property within the first taxable year of the estate and the CRA has noted that the Minister of National Revenue does not have discretion to extend that period of time.
Jersey’s COVID-19 concessions on economic substance are narrowed
Jersey's Comptroller of Revenue has issued further guidance narrowing the circumstances in which companies can rely on the March 2020 concessions on economic substance reporting. The concession applies only to the requirement that a company's activities be directed and managed in Jersey, not to other aspects of the economic substance test. There is no derogation from the requirement for a company to have adequate employees, expenditure and physical assets in Jersey; and flexibility of location is limited to a minority of employees. The Comptroller has also confirmed that the concession will be withdrawn as soon as circumstances allow.
Brazil’s family business succession planning increases due to COVID-19
The Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatistica, IBGE) has noted that succession planning among entrepreneurs has increased by more than 50 percent in 2020, as individuals react to the impact of the COVID-19 pandemic. Over the course of 2020, numerous Brazilian states registered record increases in the numbers of people having wills notarised.
Chamber of Deputies of Chile approves wealth tax Bill
The Chamber of Deputies (Cámara de Diputados) of Chile has passed a Bill that, if approved by the national congress, will establish tax measures including a wealth tax on the country’s richest residents.
OECD presents COVID-19 recovery recommendations
The OECD’s report, Going for Growth: Shaping a Vibrant Recovery, presented last week, offers recommendations to various countries, including several in Latin America, on how they can promote economic growth and resilience as they see the ongoing impact of COVID-19. The report sets out “2021 structural reform priorities” for Argentina, Brazil, Chile, Colombia, Costa Rica and Mexico.
Tax reforms presented to Colombian congress
Following delays, the Congress of the Republic of Colombia has received the Ministry of Finance’s tax reform Bill. The proposals include increases to VAT, personal and business income taxes, with the aim of raising COP23.4 billion to ease the economic burden of the COVID-19 pandemic. However, the proposed reforms have been met with criticism from unions, who suggest that it will have a negative impact on lower income Colombian families.
Certain Uruguayan companies can cut pension contributions due to pandemic
At the end of March, Uruguay’s government enacted Law No. 19,942, allowing certain companies to pay only 50 percent of their employer social security pension contributions accrued between January 1, 2021 and June 30, 2021, to support them during the COVID-19 pandemic. The Law also makes certain exemptions for corporate income tax payment and allows payment arrangements for taxpayers with overdue tax liabilities.
Tax reform will be required, says Mexican President
Mexican President Andrés Manuel López Obrador has said that the country will need a tax reform in order to mitigate the impact of the COVID-19 pandemic by promoting investment, financial stability and the growth of the Mexican economy. The Mexican Institute of Finance Executives (Instituto Mexicano de Ejecutivos de Finanzas) has supported a potential reform, calling it “unavoidable” in the second half of 2021. The OECD has also urged the country to focus on economic growth.
Latin American governments look to wealth taxes to underwrite public finances
The COVID-19 pandemic has prompted several Latin American governments to put forward and, in some cases, enact new wealth tax legislation, says global law firm Trench Rossi Watanabe. Jurisdictions considering the strategy include Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela.
Sharp increase in Brazilian divorce numbers for 2020
According to the Brazilian College of Notaries (Colégio Notarial do Brasil, CNB), the number of divorces in the country was 15 percent higher in the second half of 2020 compared with the previous year. The CNB attributes the increase to the impact of the COVID-19 pandemic, but also the facilitation of online divorces.
Intestate succession must be registered virtually in Peru
Peru’s National Superintendence of Public Registries (Superintendencia Nacional de los Registros Públicos, SUNARP) has moved all processing of intestate successions online. From January 18, all registrations and requests regarding intestate succession must be sent through SUNARP’s digital intermediation system, accompanied by a notary’s digital system. The move is intended to simplify processes and reduce potential fraud, as well as helping to reduce the need for in-person interaction during the COVID-19 outbreak.
Colombian pension reform should be examined, say experts
Experts have warned that the Colombian pension legislation is in urgent need of reform, with nearly half of Colombians earning less than the minimum wage to qualify for inclusion in the pension system. They have urged the government to create a more “uniform” pension that would take into account workers without formal long-term contracts and address gender inequality. However, the experts also acknowledge that significant reform is unlikely in 2021 as the impact of the COVID-19 pandemic continues to unfold.
Mexican government reports increase in fiscal income
The Mexican Tax Administration Service (Servicio de Administración Tributaria, SAT) has reported a year-on-year increase in income collected through tax, despite the impact of the COVID-19 outbreak. According to SAT, tax collected in 2020 represented a 0.8 percent increase compared with 2019, although the collection fell short of the government’s original projections for the year.
Brazilian notaries to operate despite COVID-19 curfew
A judge in the Brazilian state Amazonas has decreed that notarial services are not subject to the curfew put in place to curb the spread of the pandemic. The Association of Notaries and Registrars (Associação dos Notários e Registradores, ANOREG) for the state filed a civil action arguing that that such services are essential during the spread of COVID-19.
Argentinian congress passes one-off wealth tax
On December 4, 2020, the National Congress of Argentina approved a one-off wealth tax aimed at raising revenues to support the country's fight against COVID-19. The government hopes to raise ARS3.5 billion through the levy.
OPG updates COVID guidance for LPA signing in England
The Office of the Public Guardian (OPG) for England and Wales has updated its guidance on making and registering lasting powers of attorney (LPAs) during the COVID-19 pandemic, providing guidance on social distancing when signing the forms in England. However, the OPG is currently experiencing delays registering LPAs and requests that up to 15 weeks from receipt of the LPA is allowed for the application to be processed. This includes a four-week waiting period required by law. Separate specific guidance is available for Wales.
Husband's claim of pandemic Barder event fails to convince EWFC
A man who agreed a GBP1-million financial remedy settlement on 12 March 2020, just before the first COVID-19 lockdown, has had his application for variation of the consent order refused in the England and Wales Family Court (EWFC).
MPs warn against personal tax increases to pay for pandemic
With the 2021 Budget due on 3 March, the House of Commons Treasury Select Committee has published a report suggesting that corporation tax could be increased to raise revenues in the short term, rather than personal taxes. It also asks HM Treasury to consider significant reform of stamp duty land tax and to develop a tax strategy setting out the tax system's high-level objectives: a course of action recommended by STEP in its submission to the Tax After Coronavirus inquiry last year.
ICAEW maintains pressure for self-assessment penalty waiver
The Institute of Chartered Accountants in England and Wales (ICAEW) is continuing to press HMRC to automatically waive penalties for late tax returns due on 31 January, in light of the COVID-19 pandemic's impact on clients, tax agents and HMRC resources. Michael Izza, ICAEW Chief Executive, has written to HMRC's Chief Executive urging a two-month moratorium on late filing penalties, noting that HMRC's helplines continue to operate with restricted opening hours and that practitioners are finding it much harder to contact HMRC to resolve tax return queries.
Professional bodies urge more leniency on residence test for stranded taxpayers
Tax professionals are urging HMRC to make its policy on tax residence during the COVID-19 pandemic more flexible, following continuing concerns that individuals who normally live abroad will inadvertently become UK-tax-resident because they are stranded in the UK.
Survey suggests banks are failing bereaved relatives
A report from Which? alleges that banks' services to relatives of a deceased accountholder have become less efficient in the COVID-19 pandemic. Closing the deceased's account after the death took more than three months for 17 per cent of people before the March 2020 lockdown, rising to 37 per cent of those who had to complete the process afterwards.
US states disagree on workers' tax residency during COVID-19 pandemic
The US' individual states are in disagreement over how they can tax workers inside and outside their borders during the pandemic. In one crucial dispute, New Hampshire has petitioned the Supreme Court of the United States to challenge Massachusetts' practice of taxing New Hampshire residents who work remotely from their homes for Massachusetts businesses, with several other states filing amicus curiae briefs supporting New Hampshire.
Singapore extends income tax relief for employees stranded by travel restrictions
Singapore citizens and permanent resident employees who work for overseas employers, but who are working remotely from Singapore due to COVID-19, will not pay domestic tax on their employment income until 2021. The Inland Revenue Authority originally announced the exemption would last until 30 September 2020, but it has now been extended subject to review as the public health situation evolves.
Concessions made on Malaysian tax residency during COVID-19
Malaysia's Inland Revenue Board has released updated guidance on international tax issues arising from COVID-19 travel restrictions, amending the guidance issued in May 2020. It addresses tax residence status, cross-border employment income, and the potential creation of a permanent establishment in Malaysia. For tax residency day-counting purposes, a temporary enforced absence from Malaysia caused by coronavirus travel restrictions will be counted as absence, but temporary enforced presence in Malaysia will not be counted as presence.
India makes concessions on day-counting residence test during epidemic
India's government has made some concessions on the tax residency of visitors who were forced to remain in the country when it restricted all incoming and outgoing international travel on 22 March 2020. Days between 22 March to the end of the tax year on 31 March, and any period between 1 March and 31 March spent in quarantine, will not count towards the tax residency test for 2019/20.
Queensland allows witnessing of wills by video conference
In response to the COVID-19 outbreak, the Supreme Court of Queensland has passed Rule 452(2)(b) of the Uniform Civil Procedure Rules, allowing that wills do not need to be witnessed physically in the presence of the testator, and can be witnessed by video conference subject to various conditions. The amendment applies to documents that are executed between 1 March 2020 and 30 September 2020. In March, the Queensland Law Society produced a practice note for practitioners taking will and enduring power of attorney instructions during COVID-19.
Emergency order allows wills to be executed electronically in New Zealand
Wills in New Zealand can now be signed by audiovisual link, under the Epidemic Preparedness (Wills Act 2007 - Signing and Witnessing of Wills) Immediate Modification Order 2020. The order modifies s.11 of the Wills Act 2007, where it is impractical or impossible to comply during an epidemic, until the Epidemic Preparedness (COVID-19) Notice 2020 expires or is revoked.
Further COVID-19 relief announced for BC SMEs
The British Columbia (BC) provincial government has announced a relief program for small- and medium-sized enterprises (SMEs), providing non-repayable grants of between CAD10,000 and CAD30,000 to businesses that reported a 70 percent revenue loss during March and April 2020, and continue to earn less than 50 percent of their pre-COVID-19 revenue.
Changes to Ontario system allow electronic filing of probate applications
As of October 6, probate applications, along with supporting and responding documents are now eligible to be filed electronically by email to the Ontario Superior Court of Justice. Original documents filed in support of the application, for example wills and codicils, must still be filed in hard copy at the same Superior Court of Justice location as the probate application, or provided at the court office, while estate administration tax payments and any filing fees must also be paid directly to the court office.
Ontario extends virtual will signing
Under the Reopening Ontario (A Flexible Response to COVID-19) Act, the Government of Ontario has extended an order enabling the remote signing and witnessing of wills and powers of attorney using audio-visual technology. The order, Ontario Regulation 129/20, was extended for 30 days as of July 24, 2020, meaning that such documents can by virtually witnessed until August 24, 2020. The government may further extend the provisions at that point, potentially until July 24, 2021. The province of Newfoundland and Labrador has also enabled the remote witnessing of wills through video technology.
- Fogler Rubinoff
- Hull & Hull
- Estate Law Canada
- Law Society of Newfoundland and Labrador
- Read STEP article - 15 April 2020
Canadian court rules COVID-19 complications not an excuse for estate administration inaction
Procedural complications due to the coronavirus pandemic were not a sufficient reason to extend the time frame of a court order, according to a recent decision in the Ontario Superior Court of Justice (Lima v Ventura (Estate of), 2020 ONSC 3278).
STEP Canada publishes resource chart on COVID-19 amendments and how to effect safe (and valid) signings
STEP Canada has prepared a resources chart on executing estate documents in Canada during COVID-19, for members to reference the options for having documents signed in each province and territory.
CRA issues COVID-19 pensions guidance and reliefs
The Canada Revenue Agency (CRA) has issued guidance on registered pensions plans (RPPs), offering tax reliefs for employers during the COVID-19 outbreak for the remainder of 2020.
Coronavirus could lead to urgent litigation cases, say experts
Cases could emerge in Canadian courts around capacity and the care of vulnerable relatives during the COVID-19 pandemic, says James Zaitsoff, Civil Litigator at Vancouver law firm Owen Bird. He cites the example of Cho (Re) 2020 BCSC 689, in which the Supreme Court of British Columbia heard a family dispute over care arrangements for an elderly relative, where the applicants agreed on the need to manage their mother’s affairs but disagreed on her residency and care during the outbreak.
Law Society of Ontario presents pandemic response
The Law Society of Ontario (LSO) has released a report outlining its response to the COVID-19 outbreak since the regulator moved to virtual service provision on March 16, 2020. Measures taken include the release of revised directions on virtual commissioning and notarising, and client identification and verification, as well as will-drafting legal services for doctors.
British Columbia defers transparency register until October
The effective date for British Columbia private companies to begin maintaining a beneficial ownership register has been postponed from May 1 to October 1, 2020. The postponement also makes various amendments to the regulations under the Business Corporations Act (British Columbia). At the same time, Canada's federal government is proposing to amend the rules requiring companies to maintain a register of individuals with significant control under the Canada Business Corporations Act.
Ontario Law Society relaxes "in person" affidavit rule during epidemic
The Ontario Law Society has issued a special advisory that during the coronavirus epidemic it will interpret the ‘in person’ rule in s.9 of the Commissioners for Taking Affidavits Act as not requiring the lawyer or paralegal to be in the physical presence of the client when swearing an oath or declaration.
Tax deadlines deferred for charity annual returns
The filing deadline for all T3010 charity annual returns due after March 18 is being deferred to December 31.
Cayman Islands defers FATCA, CRS, and economic substance reporting deadlines again
The Cayman Islands government has further extended the deadline for filing 2019 reports under both the Common Reporting Standard (CRS) and the US Foreign Account Tax Compliance Act (FATCA) to 16 December 2020. The economic substance reporting deadline has also been deferred, in this case to 28 February 2021, except that returns relating to intellectual property business must be filed by 31 January 2021. The new deadlines apply also to non-tax resident entities.
Bahamas board meetings can be held remotely without breaking economic substance rules
Bahamian entities subject to the economic substance rules will be regarded as compliant with the 'direction and management' test if they can show that board meetings could not be held physically in the jurisdiction due to COVID-19 related travel restrictions, the country's Ministry of Finance has announced. Virtual board meetings will suffice, provided the reasons are documented by each included entity on a case-by-case basis.
Coronavirus crisis delays Bahamas removal from EU money laundering listing
The Bahamas has issued a statement explaining that it was included on the European Commission's proposed list of high-risk money laundering jurisdictions only because an on-site inspection by the Financial Action Task Force, scheduled for April 2020, had to be postponed as a result of the coronavirus crisis. The Bahamas says it is now ready to accommodate the on-site visit at any convenient time.
Cayman Islands extends FATCA filing deadline again
The Cayman Islands government has further extended the deadline for filing 2019 reports under the US Foreign Account Tax Compliance Act (FATCA) to 16 November 2020.
Deadline maintained for BVI economic substance reporting
The BVI International Tax Authority has declined to extend its deadlines for economic substance reporting during the coronavirus outbreak, but has issued guidelines to help businesses based in the jurisdiction meet the requirements. It advises companies to appoint alternative directors in the BVI where possible, and notes that not all directors have to attend board meetings in the BVI, as long as the meeting is quorate. Virtual meetings are allowed, and not all board meetings need to be held in the BVI, only those related to core income-generating activities.
Bermuda to make economic substance allowances for coronavirus travel disruption
Bermuda has announced that a pragmatic approach will be taken to the economic substance test for companies that have had to adjust their operating practices to the coronavirus outbreak. Companies should maintain and retain relevant records that show what their policy was in respect of restrictions on travel for the company officers and the period of time for which that policy was in place.
Wills can now be signed and witnessed via video link during pandemic in Jersey
The Jersey government has introduced emergency legislation temporarily relaxing the formal requirement for two witnesses to be physically present when a will is signed. Instead, the witnessing can now be completed by audio-video communication. Unless extended, the legislation will expire on 30 September 2020.
More time for meeting deadlines in Jersey in response to epidemic
The Jersey Financial Services Commission is deferring some of the reporting deadlines for businesses based in the jurisdictions, due to the coronavirus outbreak. Audited financial statements are being granted a three-month extension for submissions due between 31 March and 31 July 2020, though companies must apply for the extension. Collective Investment Funds and Fund Services Businesses will be given 40 rather than 20 working days after quarter-end to submit their fund statistics returns.
Jersey and Guernsey to make economic substance allowances for coronavirus travel disruption
Jersey and Guernsey have announced that a pragmatic approach will be taken to the economic substance test for companies that have had to adjust their operating practices to the coronavirus outbreak. Companies should maintain and retain relevant records that show what their policy was in respect of restrictions on travel for the company officers and the period of time for which that policy was in place.
- Guernsey Finance
- Walkers (Guernsey)
- Carey Olsen - expired
- Jersey Comptroller of Revenue (statement, PDF file)
- Walkers (via Mondaq) - expired
France and Italy offer extra gift tax relief on home and business investment
An expert at law firm Macfarlanes describes the ad hoc gift tax reliefs, aimed at encouraging recipients to invest in their private residences or family businesses, introduced by both France and Italy during the COVID-19 epidemic.
Luxembourg board meetings can now be held remotely until June 2021
Luxembourg companies and other legal entities have been granted permission by the government to hold their board meetings remotely until 30 June 2021, rather than 31 December 2020 as previously announced.
France announces COVID-19 tax relief for employees in four European countries
Agreements between France with Belgium, Germany, Luxembourg and Switzerland, respectively, regarding taxation of cross-border workers during the COVID-19 crisis have been extended to the end of 2020. Work carried out from home in a taxpayer's country of residence as a result of COVID-related measures can be considered as days worked in the foreign country where they would otherwise have carried out their activities. However, each of the mutual agreements are very specific and numerous situations remain unresolved, say tax advisors at accounting firm Deloitte France, and no similar agreements have been extended to Italy, the Netherlands, Spain or the UK.
Deadline arrives for new French trust reporting requirements
Trustees of trusts with a connection to France should have submitted their Form 2181-Trust annual tax returns by now, the deadline having been extended from 15 June to 30 September 2020 due to the COVID-19 pandemic. The reporting requirements have changed from previous years, introducing a third situation that triggers French nexus when the trustee is established or resident outside the EU and acquires real estate or enters into a business relationship in France.
Various EU Member States grant further COVID-19 tax relief
Several EU Member States have recently announced further reliefs during the ongoing COVID-19 pandemic. At the end of August, Austria gazetted legislation extending the temporary 55 per cent top rate of personal income tax until the end of 2025, as well as deferring certain payment deadlines to 15 January 2021. Belgium, France, Germany, Luxembourg and Switzerland have all extended the duration of their agreements clarifying the tax rules for cross-border workers affected by COVID-19 restrictions. France has also extended its scheme allowing employers to pay workers tax-free bonuses until 31 December 2020.
- Tax-News (Austria)
- Tax-News (Belgium, Luxembourg)
- Tax-News (Belgium, France, Germany, Luxembourg and Switzerland)
- Tax-News (France)
EC discourages COVID-19 aid for companies linked to blacklisted jurisdictions
The European Commission (EC) has issued a recommendation to EU Member States that coronavirus-related financial support should not be granted to companies who have 'links' to countries that are on the EU's list of non-cooperative tax jurisdictions for tax purposes. In particular, if the company is tax-resident in a blacklisted jurisdiction, is controlled by shareholders there, or controls subsidiaries or own permanent establishments there. The recommendation is not mandatory, and the EC itself states that it should not apply to companies that prove they have paid adequate tax in the Member State or have a genuine economic presence in the third country.
European Commission to postpone DAC6 reporting rules
The European Commission is proposing to defer the deadlines for filing and exchanging taxpayer information under the mandatory tax planning disclosure rules set out by Council Directive (EU) 2018/822 (DAC6) due to the coronavirus crisis. EU Member States will have an extra three months to exchange information on cross-border tax planning arrangements, and on financial accounts beneficially owned by another Member State's tax residents.
Russian withholding tax imposed on outbound payments
Russian President Vladimir Putin has announced a 15 per cent withholding tax to be imposed on dividend and interest payments from Russian sources to all jurisdictions from 2021.
Peru’s tax authority issues COVID advice on property tax
In light of the increased death rate during the COVID-19 pandemic, Peru’s tax authority (Servicio de Administración Tributaria, SAT) in Lima has issued a reminder to taxpayers regarding property taxes. SAT reminds those who may have unexpectedly inherited property will be subject to municipal tax obligations, and must be registered with the authority by March 2021 to avoid any penalties.
- SAT (Spanish) - expired
Increase in wills registered in Mexico due to COVID-19
Following reports from Brazil about the surge of will writing during the COVID-19 pandemic, Mexican lawyers have also reported an increase in people creating and registering wills. According to the College of Notaries of Mexico City (Colegio de Notarios de Ciudad de México), applications to create a will made to notaries in the capital city have increased by 60 percent since 2019.
Growth in wills among younger age groups in Brazil
Numerous Brazilian states have reported a growth in the number of wills registered since the start of the COVID-19 pandemic, and notaries across the region are now finding that many wills are being made by younger age groups. Notary Fernanda Leitão told Epoca that she has seen a large increase in volume of wills made by those aged between 30 and 50 as the pandemic has made them think about their mortality, and the importance of protecting their assets for loved ones. During the pandemic, notaries in various Brazilian states have commented on the growth in the number of wills registered.
Peru launches electronic registration service for wills, property and companies
In August, Peru's National Superintendency of Public Registries (Sunarp) launched a service to allow the electronic registration of deeds including land title registrations and wills, including the granting, modification, extension and revocation of wills, as well as transfers of shares, incorporation of limited partnerships, inheritance waivers, transfer by testamentary succession, trusts and modification of family assets. Filing of deeds and other documents will be authorised with notarial digital signatures. The country's Ministry of Economy and Finance has also approved a new procedure for the electronic notification of Tax Court actions, including appeals, complaints and requests for correction.
Delayed tax amnesty now in effect in Dominican Republic
The Dominican Republic's tax authority has issued regulations bringing into force Law 46-20 on transparency and equity revaluation. General Norm 04-2020 establishes a tax amnesty program allowing taxpayers to voluntarily declare or revalue relevant assets subject to a 2 percent tax rate. The law was enacted on February 19, giving taxpayers 90 days to take up the amnesty offer, but the coronavirus pandemic forced the government to delay the effective date to the General Norm's publication date (July 13) and extend the declaration period to 180 days.
Increase in requests to draft wills in Guatemala
The coronavirus emergency has generated a substantial increase in requests for the preparation of wills in Guatemala.
Increased focus on elder abuse and questions of capacity in Brazil
A new campaign by Brazilian notaries is seeking to protect the elderly and vulnerable in the wake of the COVID-19 pandemic.
Further COVID-19 reliefs for Mexican taxpayers
A legislative proposal has been presented to the Mexican congress proposing to reduce the VAT rate from 16 percent to 10 percent for the remainder of 2020. It will not apply to the “northern border region” of the country, where the VAT rate is already set at 8 percent, while the “southern border region” will also be granted an 8 percent rate. The proposed rate reductions will be effective from the date of the enacted legislation being officially gazetted until December 31, 2020.
Chilean government updates philanthropy guidelines during COVID-19
The Chilean internal revenue department has issued a circular clarifying that money and goods of any nature or class may be classed as a donation, and therefore an accepted expense for tax treatment, “to the extent that [such money or goods] satisfy the basic needs of food, shelter, housing, health, cleanliness, decoration, removal of debris, education, communication and transportation of the inhabitants of the affected areas.”
Proposed legislation provides for will writing in Brazil during pandemic
Bill 1,627 of 2020 has been tabled in the Plenary of the Federal Senate of Brazil, proposing emergency provisions for will writing during the coronavirus outbreak.
Brazilian data protection law postponed
The Federal Senate of Brazil has passed Bill 1179/2020, enabling certain COVID-19 emergency measures. As part of the Bill, entry into force of the country’s General Data Protection Law (Lei Geral de Proteção de Dados No. 13,709/2018, LGPD) has now been postponed. The Bill must be approved by the House of Representatives; if it is passed and sanctioned by the president, the LGPD will not enter into force until January 2021, with administrative sanctions and penalties unlikely to be enforceable until August 2021.
Further coronavirus measures announced across Latin America
Various Latin America countries are continuing to increasing measures to support taxpayers across the region during the COVID-19 outbreak. Various deadlines for tax filing have been postponed in Chile and El Salvador, while Peru has extended its timeframes for sanctions and audits. In Panama, the Directorate General of Revenue has issued a resolution enabling it to correspond with taxpayers via email rather than in person.
Increased succession planning across Latin America
Countries across Latin America have reported an increased number of clients requesting estate planning, particularly in light of the coronavirus crisis. Wealth management firm Zedra has reported a growing demand for succession planning and structuring strategies, suggesting that the pandemic has acted as a catalyst.
Notaries find new ways of working
Notaries across Latin America are adopting new processes in order to continue operating during the coronavirus outbreak. In Brazil, those dealing with documents such as wills and powers of attorney, as well as other documents requiring witnessed signatures, are operating limited office hours during which they can see only a few clients at any given time. Notaries can also arrange to visit the houses of vulnerable clients if necessary. Similarly, in Ecuador notary offices are reopening within limited parameters, and most services will be conducted virtually until the point of requiring a signature. Peru’s National Superintendence of Public Registries (Superintendencia Nacional de los Registros Públicos, SUNARP) has also extended its online services for citizens.
Virtual request system for Colombian certificates of residency
Colombia’s Directorate of National Taxes and Customs (Dirección de Impuestos y Aduanas Nacionales, DIAN) has launched a new online system for individuals applying for certificates of fiscal residency or tax status. Under Resolution 26 of April 11, 2019, they can complete and sign their application forms digitally, and send them, with supporting documentation, to a dedicated email address at DIAN.
Colombian government will not consider reform during pandemic
Colombian President Iván Duque has rejected the idea of tax reform to support the country’s economy during the COVID-19 pandemic, tweeting last week (April 15, 2020), “this is not the time for tax reform and it is not on the government's agenda.”
Peru issues virtual registry certificates in wake of pandemic
Peru’s National Superintendence of Public Registries (Superintendencia Nacional de los Registros Públicos, SUNARP) will take new measures to respond to the coronavirus pandemic through issuing registry certificates virtually. Documents will carry the electronic signature of certifying attorneys, as well as a QR code allowing the verification of document authenticity in the SUNARP portal.
Congress of Costa Rica approves suspension of tax payments during coronavirus pandemic
On March 19, the Congress of Costa Rica approved a Bill to freeze various tax payments for three months, until the end of June 2020, to mitigate the economic effects of the current coronavirus pandemic. The Bill covers certain VAT and income tax payments. When the suspension is lifted, taxpayers will have until December 31, 2020 to pay the taxes for April to June without interest incurred.
Temporary regulations for durable powers of attorney in Israel
Israel's Administrator General has issued temporary guidance on the execution of durable powers of attorney during the coronavirus outbreak. It permits durable powers of attorney to be made via separate videoconferences between the attorney with the principal, and with the agent, where the attorney can provide the relevant explanations while confirming the legal capacity as well as the wishes of the principal and the lack of undue influence.
Seven per cent of public made wills during first COVID-19 lockdown
Research by the Law Society of England and Wales has found that 7 per cent of respondents to a survey made or updated their will during the first COVID-19 lockdown between March and June 2020. However, some 68 per cent of those surveyed did not make lasting powers of attorney or end-of-life provisions.
New guidance issued on SRT for non-residents
HMRC has issued new guidance on the statutory residence test (SRT), clarifying that it will not seek to tax any days worked in the UK by a non-resident due to COVID-19-imposed restrictions. Income earned between the date the non-resident intended to leave the UK and the actual date of their departure will not be taxed, if it is already taxable in the individual's home country and the individual left the UK as soon as they possibly could.
Increase in backlog of probate applications awaiting grant in England and Wales
The backlog of probate grant applications submitted but not yet issued now stands at 29,000, an increase of approximately 5,000 since the end of March 2020, according to HM Courts & Tribunals Service (HMCTS). Completion now takes between two and five weeks on average, it has warned.
Law Society issues remote witnessing guidance for England and Wales
The Law Society of England and Wales has published guidance on the temporary process for remote witnessing of wills, introduced by regulations that came into force on 28 September 2020. It emphasises that practitioners are obliged to assess and manage the risks raised by remote witnessing, which should be used only as a last resort or in emergencies, and only if certain precautions are in place. It includes a non-prescriptive specimen attestation clause provided by the Ministry of Justice.
Accountants may press for extension to self-assessment filing deadline
The Institute of Chartered Accountants in England and Wales is considering asking for the 31 January 2021 self-assessment tax return deadline to be deferred, or at least for late-filing penalties to be waived. It says accountancy firms are under enormous resource pressure due to assisting clients with claims for COVID-19 related financial support, as well as coping with the end of the EU exit transition period.
Daily late filing penalties waived for 2018/19 self assessment
HMRC has confirmed it will not impose daily penalties on taxpayers who are more than three months late in filing their 2018/19 self assessment tax returns due to the COVID-19 outbreak. However, the GBP100 fixed penalty for missing the deadline will be charged, and so will the six-month and 12-month late-filing penalties where appropriate.
Autumn budget 2020 cancelled
The additional budget announcement expected this autumn has been shelved due to the re-emergence of the COVID-19 pandemic. The Department of the Treasury is planning a spending review, the BBC has reported.
Sharp fall in court activity due to COVID-19 in England and Wales
The number of new cases started in the family courts between April and June 2020 was 13 per cent lower than the same period of the previous year. Financial remedy cases fell by 30 per cent and matrimonial cases by 18 per cent. The Office of the Public Guardian received 44 per cent fewer applications for lasting powers of attorney, while in the same period there were 52,625 applications for probate grants and 45,491 grants issued, with an average seven-week period taken to issue the grants.
Remotely witnessed wills officially declared valid in England and Wales
The law of wills in England and Wales is to be amended to allow the remote electronic witnessing of wills under certain conditions. The change is to be backdated to 31 January 2020, in order to reassure the public regarding any wills that may have been remotely attested during the coronavirus epidemic.
Companies House extends beneficial ownership reporting deadline
The deadlines for filing company accounts and certain other key statutory events have been further extended due to the coronavirus outbreak. From 27 June, the 14-day deadline for reporting changes to the company, including a change of director or person with significant control, is extended to 42 days. Accounts filing deadlines for private companies and LLPs are automatically extended from six months to nine months after the end of the accounting period. The measures are temporary, and will not automatically extend any deadlines that fall on 6 April 2021 or later.
Company insolvency legislation now in force
The Corporate Insolvency and Governance Act 2020 (CIGA 2020) has come into force, providing struggling companies with a 40-day protection period so that they can trade through the coronavirus crisis without being forced into insolvency. No winding up petition can be presented on the basis of a statutory demand, unless the creditor has reasonable grounds for believing that coronavirus has not had a financial effect.
Epidemic relief clauses added to finance Bill
The Finance Bill 2020 has reached its report stage and now includes new clauses, one of which modifies the statutory residence test where an individual's international travel has been restricted by the coronavirus epidemic. Also included is the disapplication of interest and surcharges on tax liabilities deferred due to the epidemic and the allowance of relief from additional stamp duty land tax where the epidemic has prevented disposal of a property within the normal three-year period.
Government accepts coronavirus as excuse for late IHT400 filing
HM Treasury's financial secretary Jesse Norman has acknowledged concerns that the coronavirus crisis will prevent some estate administrators from meeting the six-month deadline for paying inheritance tax (IHT) and the 12-month deadline for filing an IHT return. The pandemic will be regarded as 'within the scope of a reasonable excuse for late filing and as grounds for appeal against late filing penalties', he said, noting that 'the government continues to explore all avenues'. STEP is continuing to discuss potential measures with the government.
Concessions on submitting unsigned IHT forms prompts warnings of fraud risk
HMRC will now accept IHT100 inheritance tax (IHT) account forms that have not been physically signed by the trustees, provided certain prescribed wording is used, even where the trustees have not engaged a professional agent. This goes further than previous concessions that printed signatures would be accepted where a professional agent is actin. However, it has attracted warnings that assets could be distributed fraudulently to benefit certain individuals without the knowledge of all the personal representatives or trustees, or forms are submitted that vary from the agreed version.
Wales withholds economic support from non-resident businesses in low-tax jurisdictions
The devolved Welsh government has announced that businesses owned by a company or individual living in a '100 per cent tax haven' will not be eligible for financial support from the Welsh government's economic resilience fund, which is offering GBP500 million of grant support to distressed firms. The policy will affect only a small number of large organisations, said the National Assembly of Wales’ Minister for Finance Rebecca Evans.
Financial regulator emphasises importance of information security during COVID-19 outbreak
The Financial Conduct Authority (FCA) has told firms to be vigilant to the potential increase in security breaches or cyberattacks due to the coronavirus crisis, and to ensure the usual notification requirements are followed and significant incidents are reported. They should not change or switch off any screening or monitoring controls to reduce operational burdens; and instead implement enhanced monitoring to protect end points, information and firm-critical processes, including network connections and video-conferencing software, the FCA says.
HMRC relaxes appeals deadlines and 'reasonable excuse' test
Taxpayers are being allowed an extra three months to appeal HMRC’s decisions or penalties, where they cannot meet the usual 30-day deadline because of the coronavirus crisis. Delayed appeals will be accepted against decisions or penalties dated as far back as February 2020. HMRC has also updated its general guidance on applying the 'reasonable excuse' test where the crisis has affected a taxpayer's ability to meet their obligations, including financial institutions' information exchange duties under the International Tax Enforcement (Disclosable Arrangements) Regulations 2020.
COVID-19 delays regulation of pre-pay funeral plans
As a result of COVID-19, HM Treasury has delayed the introduction of secondary legislation bringing funeral plan firms under compulsory Financial Conduct Authority regulation. The legislation will be laid before parliament in the fourth quarter of 2020 and brought fully into force 18 months after being made, to counter concerns about unfair exploitation of consumers.
Rules issued for holding contested final hearings remotely during the COVID-19 pandemic
Criteria for the suitability and appropriateness of remote contested final hearings during the current pandemic have been set out by Sir Andrew McFarlane, President of the Family Division. His guidance in Re A (Children) (2020 EWCA Civ 583) states that even though a hearing can take place remotely, this does not mean that it should.
Temporary changes to verification and signing procedures
The Land Registry has, from today (4 May), made temporary changes in the process of verifying a person's identity and for signing deeds when making a transfer in England and Wales, in response to the coronavirus outbreak. Identities can now be verified by people in many more professions besides the law, and the verification can be done by a video call. The Registry will also accept deeds that have been signed using the 'Mercury' system, where a signature page is signed in ink and witnessed in person, and then scanned or photographed and sent as an email attachment to the conveyancer. The changes are temporary, and may be modified or withdrawn at short notice if considered to increase the risk to the register.
Stately homes can retain IHT exemptions despite quarantine
The owners of the 660 stately homes open to the UK public have received reassurance from HMRC that it will take into account their enforced closure due to coronavirus, when assessing whether they have met their undertakings for the purpose of inheritance tax (IHT) and capital gains tax relief. National heritage property, including homes or land of historic or architectural significance, can be passed to heirs free of IHT as long as they are made accessible to public visitors for part of the year and satisfy various other conditions.
SCTS issues COVID-19 operating guidance
The Scottish Courts & Tribunal Service (SCTS) has announced that it will now process commissary applications from 1 May 2020. Until further notice, all commissary applications including applications for confirmation and petitions for appointment of executor dative should be sent, in hard copy, to the postal address of the relevant hub court detailed on the SCTS website. Applications sent to courts that are currently closed will be processed in the relevant hub court. Due to significantly reduced staff resources, commissary applications will take longer to be processed.
Deputies and attorneys reminded to maintain duties during coronavirus isolation, says OPG
The Office of the Public Guardian (OPG) has advised deputies and attorneys in England and Wales that they cannot temporarily give up their role if they cannot visit the protected person during the coronavirus crisis, even if they themselves are in isolation or shielding because of government guidelines.
Income tax risks for directors who waive remuneration or repay bonuses
Senior employees and directors are being warned to be very careful about waiving their own salary or bonus payments during the coronavirus crisis. If the timing is not judged properly, they may find themselves being held liable for tax payments on income that they never received under the salary sacrifice measures in s.15(2) and 18 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA). Moreover, says the Chartered Institute of Taxation, a voluntary repayment of a director's bonus to help maintain liquidity during the crisis is not considered eligible for relief as negative earnings.
Businesses that abuse furlough scheme may be charged with strict liability offence
HMRC is preparing for potential abuse of the GBP60-billion furlough scheme announced by the Chancellor to protect workers during the coronavirus epidemic. According to law firm RPC, employers that misuse the scheme could be prosecuted for the strict liability offence of failing to prevent tax evasion under the Criminal Finances Act 2017.
Statutory residence test relaxed for foreign coronavirus workers
The UK's Chancellor of the Exchequer Rishi Sunak has announced temporary changes to the statutory residence test (SRT) for skilled persons moving to the UK to work on coronavirus-related activity. Any periods between 1 March and 1 June 2020 spent in the UK by such individuals will not count towards the residence tests, thus protecting their non-UK earnings from UK taxation. The qualifying criteria, to be legislated in the forthcoming Finance Bill 2019-21, will be designed so that the relaxation of the rules is tightly targeted, minimising the risk of abuse.
Virus outbreak may bring Barder challenges to financial orders
Much discussion is taking place in family law circles on whether the coronavirus epidemic can be classed as a Barder event, allowing parties to challenge even the fundamentals of a financial remedy order dealing with capital, according to a barrister at JMW Solicitors. The impact on some people's incomes may justify some claims that the order was invalidated by new, unforeseen and unforeseeable events, although similar applications in the wake of the financial crisis in 2008 failed. Applications to vary maintenance orders, lump sums payable by instalments and the timing of asset disposals may succeed.
All Court of Protection hearings to be held remotely until further notice
The England and Wales Court of Protection's (COP’s) Vice President issued updated guidance on remote access on 31 March, superseding the previous guidance of 26 March. It states that the COP can be lawfully constituted with all participants (including the judge) sitting remotely, as in the recent case of A Clinical Commissioning Group v AF (2020 EWCOP 16). Remote hearings are the default position until further direction and requests for an attended hearing are highly unlikely to be granted.
Effect of Coronavirus Bill on MCA 2005 safeguards
Alexander Ruck Keene's mental capacity team at 39 Essex Chambers has published a commentary and practical suggestions regarding the effect of the Coronavirus Bill on the Mental Capacity Act 2005, including the Deprivation of Liberty Safeguarding process.
Purchase contracts remain enforceable at law despite completion difficulties under coronavirus restrictions
Professional associations in England and Wales and in Scotland have issued guidance regarding the conduct of residential property disposals in both jurisdictions while the coronavirus restrictions create difficulties, particularly for those who have exchanged contracts but are not able to complete. They urge house moves to be postponed wherever possible, but acknowledge that there are no simple solutions if the parties involved cannot agree on a delay in completion, as breach of contract rules are still in force as normal.
- Law Society of England and Wales
- Scottish Legal News
- Boodle Hatfield
- Irwin Mitchell
- UK government (guidance)
New registration of death requirements under Coronavirus Act
The Coronavirus Act provides new requirements for registering a death, which are covered in Schedule 13. Paragraph 3 of the new Act deals with providing information other than in person and dispensing with the signing of the register. Paragraph 5 deals with the practicalities of registering a death in relation to the delivery of documents by alternative methods.
Scottish lawyers advised on will-making under social isolation regime
The Law Society of Scotland has issued some temporary practical guidance on the preparation and signing of wills in Scotland while social isolation is being enforced.
Coronavirus forces government to postpone private sector extension of off-payroll working rules
The government has unexpectedly announced a 12-month postponement of the extension of the off-payroll working rules to private sector employers, as part of its emergency response to the coronavirus outbreak. The reforms will now come in on 6 April 2021.
Emergency guidance on judicial visits to P
The England and Wales Court of Protection has issued new guidance regarding judicial visits to the protected person P, in view of the fact that many clients will be within the groups most vulnerable to the coronavirus infection. Separately, the Lord Chancellor, Robert Buckland, has issued a new statement on the running of courts during the outbreak.
Pandemic inspires thousands of SARs
More than 91,000 suspicious activity reports (SARs) related to the COVID-19 pandemic have been reported by US banks to the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) since February, according to FinCEN Director Kenneth Blanco. The most common fraud scheme involved the use of stolen identities and ‘money mules’ to obtain and launder funds from state or federal benefit programmes, with criminals often buying complete packages of stolen personal information from online vendors.
Estate tax and foreign trust forms can now be signed electronically
The US Internal Revenue Service is now accepting electronic signatures on Form 706-NA (estate and generation-skipping transfer tax return); Form 3520 (annual return to report transactions with foreign trusts and receipt of certain foreign gifts); Form 3520-A (annual information return of foreign trust with a us owner); and Form 8832 (entity classification election, also known as the check-the-box election). The policy is temporary, and will not apply to forms submitted after 31 December 2020.
FATCA re-certification deadline extended by six months
Financial institutions due to renew their certification under the US Foreign Account Tax Compliance Act (FATCA) on 1 July have been granted an automatic extension to 15 December 2020. The Internal Revenue Service has already announced that foreign financial institutions need not file their FATCA Form 8966 reports on US accountholders until 15 July 2020.
Sixty days relief granted to foreigners trapped in US
The US Department of the Treasury and the Internal Revenue Service have granted foreign individuals and businesses up to 60 days of US physical presence during which they are treated as not being in the US, if their presence was caused by coronavirus-related travel disruptions.
Guidance on CARES rebates for net operating losses
The US Internal Revenue Service (IRS) has issued guidance providing tax relief under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) for taxpayers with net operating losses, and for partnerships filing amended returns.
CARES Act offers extra deductibles for corporations
The US federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on 27 March, reverses the carry-back provisions of the Tax Cuts and Jobs Act 2017 (TCJA), and allows companies to carry back 100 per cent of net operating losses incurred in 2018, 2019, or 2020 by up to five years. Losses can still be carried forward to subsequent tax years if the taxpayer so elects. The Act also retroactively suspends the excess business loss provision, which disallows business losses in excess of USD250,000 for a single taxpayer, for 2018 through 2020, and relaxes the s.163(j) deductibility limits on business interest expenses.
Sweeping new reliefs offer non-compliant taxpayers a lifeline
The US Internal Revenue Service launched a new aid programme on 25 March for taxpayers affected by the coronavirus epidemic, offering an opportunity for non-filing or late-filing taxpayers to get into compliance.