Wednesday, September 15, 2010

Book Review: Tax and Family Breakdown

Tax and Family Breakdown

A Practical Guide

By Jason Lane

£44.95 – Published by Law Society Publishing: August 2010

When I received Tax and Family Breakdown for review I was slightly surprised by the size of the book: 281 pages (although nearly half of those are appendices, more of which below) – it is generally considered that there is very little tax law that the family practitioner needs to know, and most general family law text books only devote a few pages to the subject. There are, however, traps for the unwary, particularly when it comes to capital gains tax.

Certainly, some of the matters covered by the book do not seem particularly relevant to family breakdown, and sometimes the book does go into considerable detail, which begs the question whether a family lawyer requires such detail – should they not seek specialist tax advice for complex matters? The answer to that is clearly ‘yes’, and the book acknowledges this by specifically drawing the attention of the reader to those occasions when specialist advice should be sought – for example, when considering appropriate planning in connection with principal private residence relief.

However, even if the book does go into detail beyond what an ‘average’ family lawyer may require, obviously a particular lawyer’s requirements will depend upon their clientele, for example where they commonly act for high net worth clients, or in matters with an international dimension. In such cases, any criticism of the depth of coverage becomes redundant.

The book does not just comprise one chapter each on income tax, capital gains tax, inheritance tax and stamp duty, as one might expect. It does have chapters on most of those, but also deals with specific issues and situations, such as transfer of assets, maintenance, interests in land, pensions and life assurance (this chapter also includes a useful section on tax considerations when unlocking assets held by family companies, e.g. to fund a lump sum payment), the international dimension and valuation of assets. This format probably does make the book more practical, although there are occasions when one has to look in more than one place for all of the information on a particular subject.

As mentioned above, the book also includes substantial appendices, although most of these comprise family law statutory provisions, of which the reader should obviously already be aware. Slightly more helpful is a Form E, complete with a few notes and references to the main text.

The layout of the book deserves special mention, with a number of very useful features, including:
  • Key concepts – set out at the beginning of each chapter or section.
  • Summaries of points covered.
  • Many worked examples.
  • Checklists – at the end of each chapter, a particularly valuable aide memoir, setting out the main points covered in each chapter.
  • Flow diagrams – such as one showing when the Revenue will treat a couple as having separated, for tax purposes.
As, I suspect, with many family lawyers, this writer has not always found it easy to come to grips with the more complex taxation issues, but the author generally succeeds in describing them in a clear and coherent fashion. If I have to be critical of the writing, it can grate a little when the author discusses family law, but this is because he is not a lawyer, and in any event these occasions are few and far between.

In conclusion, this is a very thorough summary of tax law for family practitioners, which even if more comprehensive than required will still be of considerable value in identifying and dealing with tax issues on family breakdown. Whilst obviously designed as a text book to be read, it is also a handy one-stop reference. My particular suggestion as to how it might be used is to read it and memorise the checklists, which will hopefully trigger the ‘warning-bell’ of a possible tax issue, whereupon go back to it as a reference and re-read the relevant section. Definitely recommended.

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