Resources and information to keep you up to date with the latest COVID-19 developments.
Find out how some of our Employer Partners are responding to the challenges presented by COVID-19.
Kimberley Martin TEP 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.
Kimberley is Director at Worrall Moss Martin Lawyers and a member of STEP’s Digital Assets Special Interest Group (SIG).
- Technology and wills – The dawn of a new era (COVID-19 special edition)
- More on this topic: sign up to the webinar on Remote witnessing: will it persist once we no longer have to socially distance?, 10 September 2020
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
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.
Singapore registration of persons with significant control is postponed
The new requirement for Singapore companies to register their controlling persons with the Accounting and Corporate Regulatory Authority, originally scheduled for this month, has been deferred until July 2020.
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.
Singapore’s CRS and FATCA filing deadlines extended due to COVID-19
Singapore is extending the financial account reporting deadlines for both the OECD Common Reporting Standard (CRS) and the US Foreign Account Tax Compliance Act (FATCA) for the 2019/20 reporting year. Both deadlines are deferred from 31 May to 31 August 2020.
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. A circular along similar lines will be issued to clarify the position for 2020/21 once international flight operations resume.
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.
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.
Guidance for Queensland practitioners on wills and EPAs
The Queensland Law Society has produced a practice note for practitioners taking will and enduring power of attorney instructions during COVID-19.
Province 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.
Canadian taxation deadlines extended by a further month
The Canada Revenue Agency (CRA) is further extending the payment due date for current-year individual, corporate, and trust income tax returns, including instalment payments, from September 1 to September 30, 2020. The CRA is also waiving interest on existing tax debts related to returns from April 1 to September 30. The previously extended filing due dates remain unchanged, but late-filing penalties and interest will not be charged if returns are filed and payments made by the extended deadline.
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).
Relief for residency issues caused by pandemic
The Canada Revenue Agency (CRA) has announced that individuals and entities can continue to benefit from tax relief regarding residency and cross-border issues caused by the COVID-19 pandemic for an extended time period. The CRA’s relief measures have now been extended until August 31, 2020.
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.
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.
Further Canadian provinces enable temporary video witnessing of wills
As of last week (May 6, 2020), Newfoundland and Labrador has joined the Canadian provinces temporarily allowing the remote witnessing of wills through video technology during the coronavirus pandemic. The Law Society of Newfoundland and Labrador has also issued guidelines on court operations during the outbreak.
Canadian tax court extends suspension period
The Tax Court of Canada has modified its timelines for the suspension of sittings and filing deadlines in light of the COVID-19 outbreak. All sittings and conference calls scheduled between May 4, 2020, and May 29, 2020 inclusive have been cancelled. All Notices of Appeal filed during the closure period, and for 60 days following reopening, will be treated as including an application for an extension of time to appeal.
British Columbia gives businesses COVID-19 property tax relief
The British Columbia provincial government has announced temporary property tax changes, giving businesses in the province some tax respite during the coronavirus pandemic. Most commercial property tax payments will see an average reduction of 25 percent, while some commercial landlords now have until October 1, 2020 to pay property taxes without incurring late payment penalties.
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.
Ontario permits virtual witnessing of documents during COVID outbreak
Under the Emergency Management and Civil Protection Act, Ontario’s provincial government has temporarily permitted the virtual witnessing of wills and powers of attorney as a result of the coronavirus outbreak.
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.
Canadian government launches economic support plan
The Canadian government has announced a new set of measures to help stabilize the economy in response to the global COVID-19 outbreak. The measures, which include flexibility in tax filing, are expected to divert revenue of CAD27 billion in direct support to Canadian workers and businesses.
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 individuals and trusts but not corporations
Individual Canadian taxpayers have been given the extended deadline of June 1 for filing their 2019 tax returns, with the payment due date extended to September 1. For trusts with a tax year-end date of December 31, 2019, the filing date for the current tax year is being extended to May 1, with payment due by September 1. NR4 tax returns for payments to non-residents in 2019 need not be filed until May 1, 2020, but payment due dates are unchanged. The filing deadline for all T3010 charity annual returns due after March 18 is being deferred to December 31. However, contrary to the CRA’s earlier suggestions, the deadline for filing T2 corporate income tax returns is not being deferred, though the payment date for the current tax year is extended to September 1.
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.
Further deadline extensions for Cayman Islands companies register and CRS
The deadline for notifying the Cayman Islands Companies Registrar in respect of certain changes has been extended to 31 May 2020. The deadline for reporting accounts under the Common Reporting Standard for the 2019 reporting year has also been further deferred to 16 November 2020, aligning it with the recently postponed reporting date for the US Foreign Account Tax Compliance Act.
BVI postpones all automatic information exchange deadlines are postponed
The BVI International Tax Authority (ITA) has extended the enrolment deadline to 31 July 2020 for US Foreign Account Tax Compliance Act (FATCA) reporting, and postponed the FATCA filing deadline to 31 August 2020. The enrolment deadline for OECD Common Reporting Standard (CRS) submissions has been put back to 30 June 2020, and the CRS filing deadline to 31 July 2020. Financial institutions can apply for further postponements if they cannot meet the extended deadlines.
Cayman Islands further delays beneficial ownership filing deadline
The Cayman Islands Ministry of Financial Services has further extended the deadline for beneficial ownership filings from 20 April to 15 May. A minor change has also been made to the definition of beneficial owner, now defined as an entity with 25 per cent or more of a company's shares or voting rights.
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. Individual requests can be made for time extensions, though the ITA is currently closed down.
Cayman Islands' reporting deadlines deferred for economic substance and beneficial ownership
The Cayman Islands Department for International Tax Cooperation has postponed until 30 June the deadlines for entities to complete their annual returns and economic substance notification filings, in response to COVID-19. The deferral applies to all companies, including limited liability companies and foundation companies. The companies registrar will accept affidavits or other documents that have been notarised or certified online or by teleconference. A one-month extension for companies' beneficial ownership submissions has already been announced, with effect from 23 March and ending on 20 April.
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
- Jersey Comptroller of Revenue (statement, PDF file)
- Walkers (via Mondaq)
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.
Aid may be restricted for foreign-based companies
France, Denmark and Poland will withhold coronavirus-related emergency finance from firms based in certain offshore financial centres, according to news agency reports. France's government is expected to include its provisions in a finance Bill to be introduced today (27 April 2020).
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.
French real estate wealth tax deadline postponed
The French tax authorities have extended the 2020 filing deadline for the real estate wealth tax, due to the coronavirus crisis. The new deadlines are 12 June 2020 for non-residents, and 4 June 2020 for those with French taxable income filing online. Later this year, each taxpayer will receive a bill setting out the payment deadline. The tax, introduced on 1 January 2018, mainly affects residential properties.
Three-month delay to beneficial ownership registration in Poland
The deadline for Polish registered companies to report their beneficial ownership to the national Central Register of Beneficial Owners has been extended from 13 April to 13 July 2020.
Deferrals of tax payments or assessments in Europe
Several European governments have announced deferrals of tax payments or assessments.
- Tax-news (France)
- Tax-news (Italy)
- Tax-news (Netherlands)
- Tax-news (Ireland)
- Tax-news (Germany)
- Avantia Asesoramiento Fiscal y Legal (Spain)
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.
Further extension to Uruguayan beneficial ownership deadline
Uruguay's executive has again extended the deadline for companies to report information about their ultimate beneficial owners, ownership chains and shareholders to the Uruguayan Central Bank. The original deadline set in January this year was April 15, but had to be deferred to May 15 because of the COVID-19 emergency. It has now been retroactively extended again to August 15, 2020.
Peru launches electronic registration service for wills, property and companies
In August, Peru's National Superintendency of Public Registries (Sunarp) will launch 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.
New procedure for electronic notification of Tax Court decisions in Peru
Peru's Ministry of Economy and Finance has 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.
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.
Brazilian lawyers report increase in wills made due to pandemic
The Notarial School of Brazil (Colégio Notarial do Brasil) has noted a significant growth in the number of wills prepared in the country during the COVID-19 pandemic. The state of Paraná recorded an increase of 70 percent in the first two months of the pandemic, while in Espírito Santo a year-on-year growth of 55 percent was reported in March 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.
Peru's notary services to resume this month
Peru’s notaries, whose services have been temporarily suspended since March 16 due to the coronavirus outbreak, will be resuming services from this month. On Monday (May 4), Peru’s government published Supreme Decree No. 008-2020-SA, which designates notary services as one of the 27 activities to be resumed in May as the country balances public health with resumption of economic activity.
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.
Various Latin American governments announce COVID-19 tax measures
Governments across South America have continued to announce updated tax relief measures to support businesses and individuals during the coronavirus outbreak. Numerous filing deadlines have been extended, as well as the payment deadlines for personal income tax. However, although various Mexican states have announced tax relief measures, the Mexican federal government has yet to amend any filing deadlines.
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.
Summary of tax measures in Central America
Law firm Consortium Legal has summarised the various measures being taken in countries across Central America to support taxpayers in the wake of the coronavirus pandemic.
Registration of wills increasing in Brazil as virus spreads
Various Brazilian states are recording an increase in the number of wills registered as COVID-19 continues to have a global impact.
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.
Withholding certificates extended, along with tax filing deadlines, in Israel
Foreign residents in Israel have been granted an extension to their withholding tax certificates from 31 March until 30 April. The deadline for individuals and Israel-connected trusts and foundations to submit 2019 paper tax returns has been postponed until 30 June 2020, while the deadline for individuals obliged to file online is now 30 July 2020.
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.
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.
Further guidance on virtual execution and signatures
The Law Society of England and Wales has published further amendments to its position statement on virtual execution and e-signatures during the coronavirus crisis. It now advises lawyers to speak to their counterparts on the other side of a transaction to ensure that there is clear agreement on procedure, and to consider how to verify the identity and authority of each person signing, beyond the usual legal and anti-money laundering requirements.
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 last month's concession 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.
Social isolation measures cut probate applications by half
The weekly rate of probate applications has fallen by half from the usual figure of 5,000-6,000 since the coronavirus restrictions took effect on 17 March. Both personal and solicitor applications have been equally affected, with solicitors unable to visit their offices to collect wills, and personal executors unable to access the deceased's records.
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.
Guidance on electronic execution of deeds
The Law Society of England and Wales has set out detailed practice guidance on the use of e-signatures and virtual execution of deeds and contracts during the coronavirus crisis. However, it does not apply to the execution of wills, which is still governed by the Wills Act 1837 as substituted by the Administration of Justice Act 1982.
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.
Key legal workers given access to testing
The Ministry of Justice has confirmed that solicitors in England and Wales recognised as key workers are eligible to be tested for COVID-19. It has issued guidance clarifying that 'key workers' include advocates required to appear before a court or tribunal either remotely or in person; barristers, solicitors, legal executives, paralegals and others who work on imminent or ongoing court or tribunal hearings; solicitors acting in connection with the execution of wills; and solicitors and barristers advising people living in institutions or deprived of their liberty.
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.
UK charities’ legacy income could fall by a quarter this year
Research firm Legacy Foresight is predicting that charities' income from legacies could fall by as much as 27 per cent this year, as a result of the coronavirus crisis.
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.
First-tier Tax Tribunal proceedings further stayed
The general 28-day stay of all First-tier Tax Tribunal proceedings announced on 24 March 2020 has been extended to 30 June 2020. The dates of all hearing windows, and deadlines for compliance with all time limits in those proceedings are further extended by 70 days, although statutory time limits for notifying an appeal to the Tribunal are not being extended.
Government comments on calls to relax witnessing rules for wills in England and Wales
The Ministry of Justice has commented on suggestions that it should ease the requirement in the Wills Act 1837 for two independent witnesses to be physically present when a will is executed in England and Wales.
Probate transition period to new application system extended to eight weeks
The transition period for professionals to move to the new probate application system has been extended from four to eight weeks because of the coronavirus epidemic. Probate registries will now continue to accept the old-style statements of truth until 18 May, though HM Courts & Tribunals Service (HMCTS) advises that any new applications should be completed by either using the new PA1P application forms introduced on 23 March, or by applying online.
- STEP Trusts Discussion Forum
- HMCTS (PA1P form, PDF)
- STEP Blog: HMCTS announces interim operational arrangements
- Law Society
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.
Affidavits need not be sworn in most non-contentious cases, says England and Wales Family Court
District probate registrars have now been authorised to allow statements of truth to be used as an alternative to affidavits in many more types of non-contentious probate processes, at least until 30 July 2020. Statements of truth are already acceptable in most online probate applications, but the England and Wales Family Court has decided they need to be extended in the current circumstances as many solicitors cannot access their offices or papers and all probate registries are closed to members of the public.
Sudden capital tax increases may catch testators unawares
With many economics experts predicting that the government will need drastic tax increases to repair its finances after the coronavirus crisis, some legal advisors are suggesting that this is a good time to prepare for capital taxation reforms that might be pushed through in an emergency budget. Wrigleys Solicitors suggests that the country could see a reduction or abolition of business and agricultural property reliefs, the tax-free capital gains tax uplift on death and the seven-year rule for potentially exempt transfers.
Emergency changes to IHT payments and returns processes
HMRC is scrapping cheques for the payment and repayment of inheritance tax (IHT), as a result of the coronavirus crisis. It is also temporarily accepting printed signatures on IHT returns instead of personal representatives' physical signatures when there is a professional agent acting.
Consultation launched on remote family court hearings
A two-week consultation has begun on the use of remote hearings in the family justice system, running until 28 April. The objective is to issue guidance in early May.
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.
Service on HMRC should now be by email
HMRC has requested service of legal proceedings and letters before action by email rather than by post, as a result of the coronavirus epidemic.
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.
Remote execution of will via videolink is not valid, say experts
Discussions continue to find lawful ways of executing a will during the coronavirus epidemic. According to the contentious probate team at law firm Boodle Hatfield, remote signing and witnessing is not permitted in England and Wales given the strict requirements in Section 9 of the Wills Act 1837. However, it cites case law to show that witnessing through windows, or where all parties involved are in an open area, will be enough to meet the s.9 requirements. Where wills cannot be properly witnessed at all, testators' other options include making lifetime or deathbed gifts, or preparing a letter of wishes.
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.
OPG investigates effect of epidemic on protected individuals
The Office of the Public Guardian (OPG) is gathering information on the impact the coronavirus outbreak is having on the process of making a lasting power of attorney, and is asking practitioners in England and Wales to describe their experiences. The Ministry of Justice is also looking at the increase in reports of domestic abuse since social distancing rules were introduced, in an effort to understand whether the elderly or people who lack mental capacity have been particularly affected.
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.
Law Society of England and Wales requests postponement of extended trust registration under 5AMLD
The Law Society of England and Wales has asked HMRC to consider deferring the commencement dates of the new Trust Registration Service (TRS) rules based on the EU Fifth Anti-Money Laundering Directive (5AMLD), and to defer the commencement date of EU Directive 2018/822 (DAC6).
Talks in progress over England and Wales attestation rules
As discussions continue between professional bodies and the Ministry of Justice over relaxing the will execution rules in England and Wales, many comments and suggestions have been published by law firms and others on how to get wills drafted, executed and attested lawfully during the coronavirus outbreak.
Prototype online case management system may help legal professionals through emergency
HM Courts & Tribunals Service is encouraging the use of its new MyHMCTS digital case management system for legal professionals, particularly since all staff are currently working remotely. It provides a single place for legal professional and other organisations to issue, pay for and manage applications within civil and family courts and tribunals, including the online probate and divorce services. Users can access all of their live cases from a single case list, though the system is still being tested and does not work with many popular browsers.
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)
Companies House grants three-month filing extension
UK businesses are being given an extra three months to file their accounts with Companies House during the coronavirus epidemic. They must apply for the extension, though applications can be made through a rapid online system that will grant the concession automatically where coronavirus is the reason.
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.
Making a will in the time of coronavirus
The STEP Trusts Discussion Forum has been examining the issues facing practitioners in the preparation of wills during the coronavirus epidemic, in view of the large jump in the number of people contacting lawyers to draft wills and execute powers of attorney in the last month. Attestation while maintaining separation is a particular difficulty.
Flurry of guidance on court hearings as crisis develops
The situation regarding court hearings is changing rapidly, with new guidance constantly being issued. All family court hearings are to be undertaken remotely either via email, telephone, video or Skype, or similar, unless fairness and justice require a court-based hearing. Supreme Court case papers can be filed at the Registry by email, specifying the means by which they propose to file, and time limits will be applied flexibly.
- New Law Journal
- Judicial Committee
- Family Court President's Guidance (PDF)
- LCJ's message to judges in the civil and family courts
- Ministry of Justice guidance
Government sets out meaning of legal 'key workers'
The government has published its definition of 'key workers essential to the running of the justice system' who can continue to send their children to be taught at state schools. It is restricted to advocates required to appear before a court or tribunal; solicitors acting in connection with the execution of wills; solicitors and barristers advising people living in institutions or deprived of their liberty; and duty solicitors, barristers, solicitors, legal executives, paralegals and others who work on imminent or ongoing court or tribunal hearings. Solicitors can decide for themselves whether they fall into the categories outlined.
Non-residents forced to overstay may escape deemed tax residency
Non-UK resident individuals forced by coronavirus restrictions to stay in the UK for longer than the 60 days normally allowed will be regarded as being in 'exceptional circumstances' for the purposes of determining UK tax residency, HMRC has announced. However, the 60-day annual limit is still in place and relevant, and HMRC has warned it will consider the facts of each individual case before deciding to disregard days spent in the UK due to exceptional circumstances.
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.
Talks in progress over England and Wales attestation rules
As discussions continue between professional bodies and the Ministry of Justice over relaxing the will execution rules in England and Wales, many comments and suggestions have been published by law firms and others on how to get wills drafted, executed and attested lawfully during the coronavirus outbreak.
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.
Estate planning solution launched to support practitioners
The US arm of law firm Bryan Cave Leighton Paisner has launched an estate planning solution to offer support during the coronavirus pandemic. The tool identifies requirements needed for the execution of wills, trusts and powers of attorney, and notes which states allow electronic or remote notarisation of documents.
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.
Trusts and estates return filing deadline is formally postponed
The US Internal Revenue Service (IRS) has now postponed filing and payment deadlines for virtually every type of tax until 15 July 2020. The affected returns and payments are estate and trust income tax returns, estate and generation skipping transfer tax returns, gift and generation transfer tax returns, individual income tax returns, corporate income tax returns, partnership returns, exempt organization business income tax returns, certain excise tax payments on investment income, and quarterly estimated tax payments. The announcements also confirm that due dates are extended for some information returns, particularly those that are not filed with a tax return, including Forms 3520, 5471, 5472, 8621, 8858, 8865 and 8938.
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.
Coronavirus impact on international tax compliance
The deadlines for submitting FBARs (FinCEN Form 114, Report of Foreign Bank and Financial Accounts), Form 3520 (Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts) and Form 3520-A (Annual Information Return of Foreign Trust With a US Owner) have not so far been explicitly extended, though an automatic six-month extension of a taxpayer’s income tax return also extends the due date of the Form 3520 filing. It is not yet clear whether information returns such as Form 5471, Form 8865 and Form 8858 (Returns of US Persons With Respect To Foreign Corporations, Partnerships and Disregarded Entities) will receive an automatic filing extension.
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.
Foreign banks are granted FATCA reporting extension
The US IRS has announced an 11-week deferral of the deadline for most foreign financial institutions to file Form 8966, used to report information about their US accountholders under the Foreign Account Tax Compliance Act (FATCA). The deadline is now 15 July 2020, with no need to apply for the extension.
Tax filing deadline now deferred, as well as payments
The US Internal Revenue Service (IRS) has agreed to extend the income tax filing deadline for all taxpayers by three months to 15 July 2020, regardless of the amount owed. Earlier announcements extended the payment deadline for certain taxpayers and companies, but left the filing deadline unchanged. Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. The extension does not yet apply to other federal tax payments due on 15 April, such as federal gift taxes.
Ninety day coronavirus extension for individual and corporate taxpayers
The US Treasury has granted a 90-day interest-free and penalty-free tax payment extension from 15 April to 14 July to help the economy survive the coronavirus outbreak. Individuals can defer up to USD1 million in their 2019 tax liability, while corporations can defer up to USD10 million.