STEP

Title Research

UK

The United Kingdom (UK) of Great Britain and Northern Ireland incorporates three legal jurisdictions: England and Wales (the latter has not had a distinct legal system since the Middle Ages), Northern Ireland and Scotland.

STEP British Isles branch pages

New developments
  • The Finance Bill 2009 (FB2009) introduces a basic rate of income tax at 50 per cent for trust income if there is no interest in possession for income in excess of the standard rate band from 6 April 2010.
  • Following the hearing in the Court of Appeal (HMRC v Trustees of the Peter Clay Discretionary Settlement) where trustees of a discretionary trust incur trustee management expenses relating purely to income they are a tax allowable expense, where an expense relates to costs identifiably attributable to dealing exclusively with income matters, such an expense may be so attributed and deducted in computing the trustees’ liability to tax at the rate applicable to trusts, notwithstanding that it is part of a larger sum or global charge.
  • Business property relief for inheritance tax purposes can apply to transfers of individual assets of a business and is not restricted to property consisting of a business or an interest in a business (Trustees of the Nelson Dance Family Settlement v HMRC)

1. Introduction

a. History and background

The United Kingdom (UK) of Great Britain and Northern Ireland incorporates three legal jurisdictions: England and Wales (the latter has not had a distinct legal system since the Middle Ages), Northern Ireland and Scotland.

The English High Court, Court of Appeal and House of Lords are based in London but there are local courts, Magistrates’ and County, throughout the country.

The legal system of Northern Ireland has developed in a similar way to that of England and Wales, particularly since the imposition of Direct Rule in 1972.

Scotland had its own system of laws and courts, based in Edinburgh, before its union with England and Wales in 1707. The Act of Union of 1707 allowed this to continue, and hence Scotland retains many distinctions from the English system.

The laws of the UK may apply to just one jurisdiction, all or any combination. Also, since 1972, European Union legislation and regulations have been applicable in the UK.

Taxation and other matters (anti-money laundering) relating to the UK are found in this summary. Information about the laws of trusts and estates are found in the jurisdictional summaries of England and Wales, Scotland, and Northern Ireland.

The currency is the UK pound (GBP).

b. Legal system

Although the systems differ in content, the sources of law are similar for all three jurisdictions. Apart from legislation, the law has developed through court decisions, and the principles behind these make up the common law. Parliamentary legislation is now the primary method of creating law, with the judiciary interpreting the statutory material. Tax matters in the UK are administered by HM Revenue & Customs (HMRC) and adjudicated (in the first instance) by the Commissioners of the Inland Revenue, on appeal from decisions of the officers of the Board of Inland Revenue.

Editorial board
Clare Archer TEP
Rooks Rider, London, United Kingdom
Christopher Cooke TEP
Rooks Rider, London, United Kingdom
Simon Jennings TEP
Rawlinson & Hunter, London, United Kingdom
Sue Moore TEP
Sue Moore Tax, Leicester, United Kingdom
Leigh Sagar TEP
New Square Chambers, London, United Kingdom

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