A firm of accountants which failed to point out tax saving opportunities to a client when he sold his company was found to be negligent by the High Court recently.
The accountants had failed to bring to the attention of the client the tax saving opportunities available to him because of his not being domiciled in the UK. The best advice in the circumstances would have been to have moved the company to an offshore trust prior to sale. This was not advised.
Wishing to avoid a Capital Gains Tax bill of £850,000, the client instead spent £200,000 joining in a tax planning scheme which was subsequently closed down by HM Revenue and Customs.
The client then sued his accountants for failing to give him the correct advice. The judge accepted his claim, concluding that the accountants had a contractual duty to give him tax planning advice and that a normally competent accountant would have done so.
Tax Saving Advice Compulsory, Rules Court
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.
