Book review: Tax Implications on Family Breakdown (2020)

 In Book Reviews for Private Client practitioners, Tax

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Published by: Bloomsbury Professional – ISBN 9781526512345

Authors:  Sofia Thomas and James Pirie

Purpose

Bloomsbury Professional Legal publicationsThe authors stated purpose was to write a book that was clear to family lawyers who would turn to it in managing cases involving the complex subject of tax. They wanted to provide dependable answers and they do.

Tax is a vast subject and practitioners also need to understand enough about tax to ask the right questions. The authors identified that at the outset of a case solicitors need only enough information to draw up a case plan which includes the emerging financial realities. It is later on that pinpoint accuracy will be needed.

So the purpose of the book is to provide enough information for family law practitioners to deal with the initial case plan and provide guidance on how to instruct an expert to help with the more detailed guidance at a later stage.

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Content

The book provides an overview of the UK tax system, which is no mean feat in itself. And goes on to cover HMRC’s powers and the penalty system and then has chapters on specific topics like domicile and the tax status of an employee compared to a self-employed person. The vexed and complex topic of pensions is covered and there are chapters on Capital Gains Tax; the family home; investment properties; chattels and investments; extracting money from a company; land taxes and the use of experts.

There are several Appendices which provide useful precedents for using experts.

Structure & Layout

Each chapter has a clear theme with at the start a ‘Contents at a glance’ box. Each paragraph in each chapter is separately numbered for ease of using the index which can take you to a particular paragraph rather than just a page. The approach provides a clean and easy to read structure with simple signposting.

There are numerous examples throughout the text. Good use is made of diagrams, flowcharts and checklists too. The chapter on the family home illustrates well the approach to structure and layout:

  • First of all, the basic principles of tax as it applies to the family home are outlined
  • Then the conditions for main residence relief from capital gains tax are explained with the use of numeric examples as well as commentary
  • Once the conditions for main residence relief have been explained the specific issues of dealing with the family home on divorce are addressed, again with illustrations and computations
  • There is a section on the different orders such as Mesher Orders and the impact they have where useful diagrams are used by way of illustration
  • The chapter ends with a helpful checklist for dealing with the main home

Tools

This book is full of useful tools for the practitioners. Flowcharts and checklists can be adopted into case management of a file and computations can help the practitioner set up spreadsheets to help them draw up the financial realities of a case. This can form the basis of further instructions to an expert for exact computations on particular facts as they become known.

The Appendices include a checklist for situations where expert tax evidence may be required; a form of enquiry letter; a form of draft order; a form of instructions; a Model form D11; and possible Agenda points for a telephone discussion with an expert.

Clarity & readability

The book has a foreword by His Honour Mr Justice Mostyn who says the authors “have written an interesting, informative and very readable book”. I totally agree. It is well organised and well-illustrated which make it easy to read and use.

Relevance to practitioners

Although this book is directed at family law practitioners, for whom it is essential, it is equally of interest to tax practitioners who do not deal with divorce cases all the time. It shows how the tax law must be applied to a particular type of client and will be useful on any private client practitioner’s bookshelf.

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