TAX FEATURE: Accountants in the divorce court. By Nichola Ross Martin

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The House of Lords has made a landmark ruling in two co-joined divorce cases featuring accountants, which could have major repurcussions on the treatment of high profile divorce hearings. Melissa Miller has been told that she can keep the 5 million she was awarded out of her ex-husband Alan's 17.5 million fortune. The lords have also ruled that Julia McFarlane is entitled to 250,000 a year from her ex-husband Kenneth for life - rather than the five years decided by the Court of Appeal. In light of the rulings, Nichola Ross Martin asks: "How does the treatment of marital property in the divorce courts square up with the Settlements Provisions for tax?"

The ruling by the House of Lords in the co-joined hearings of Miller v. Miller and McFarlance v. McFarlane is likely to set alarm bell...

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30th May 2006 15:58

Good on you Malcolm
corporate manslaughter is an extremely difficult crime to prove and needs to be looked at continually to see if there is a way companies can properly be held to account

by contrast corporate shafting (valuing a junior at £100 ph) is almost compulsory with some firms

no names no pack drill and obviously not Deloittes

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30th May 2006 14:39

Why am I bothering to work so hard?

Is nobody else going to comment on the phenomenal Deloittes profit share amounts?

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By Taxi
30th May 2006 14:45

Nicholas - I have been following the "old HRA" angle
on Settlements for sometime, and the question is very much up for debate.
The problem that you have in terms of the settlement legislation is that h and w share their lives, this works fine in terms of the divorce problem (as this case shows), but tax does not recognise the dual contribution.
It seemed to me that the judges in the court of appeal at the Arctic case were particularly unimpressed with HMRC's view that a wife's contribution to a business was less because she was working on the admin and giving support in different ways.

There does seem to be a fundamental difference; for divorce settlement purposes, Mrs MacFalane was given her fair share of her husbands's income. For tax purposes, if he paid her from the partnership, there would be a settlement. HRA says an individual is entitled to fair treatment, fair according to what?

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30th May 2006 15:50

Nichola can you clarify one point for me
sorry for being dumb


what is the tax treatment re the £250k (on the divorce) on Mr & Mrs McF

then i can compare one t'other


how do you view the monies awarded - are they compensation for services previously supplied, compensation for loss of compensation for services still to be provided or a bit of both in which case how do we divide them, or something else?

fun isnt it!

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24th May 2006 17:18

So what about non-married partners?
Given the growth in life partnerships between men/men, women/women, men and women as compared to marriage, I'm wondering how the law could be amended to provide similar protection for these alternative forms of relationship.

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25th May 2006 18:31

and as for the noble baroness' comments
i dont suppose that equalisation of property had anything to do with DD/CTT/IHT; however and for whatver reason she appears to succinctly correct with the possible exception of her comments on gender roles

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25th May 2006 15:52

Nichola can you clarify one point for me
most of these settlements are post decree nisi , so are you sure that there is a problem in that respect at all.

even some of the daft old buggers who sit in this country's wonderful courts would be hard pressed to claim settlement under the taxes acts

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25th May 2006 15:47
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