Courts open up tax advisers to negligence claims

Courts open up tax advisers to negligence claims

Protection afforded trust tax advisers has dissipated after new court ruling

THE COURTS HAVE overturned the protection that tax advisers received when helping clients set up tax schemes involving trusts, opening them up to negligence claims.

In the joint appeals of Pitt v Holt and Futter v Futter, the Court of Appeal overturned the protection afforded to tax advisers under Re Hastings-Bass.

In Hastings-Bass the courts had found that where an adviser had provided negligent advice, the trustee could unravel the transaction.

However, the latest ruling in Pitt found that the transactions could only be unraveled where the trustee had acted outside the scope of their powers. The new ruling found that under Hastings-Bass applications, trustees would have acted within the scope of their powers – so the transactions cannot be unraveled.

Trustees receiving negligent advice from advisers will now have to claim for damages for professional negligence.

It is not known if the decision will be appealed.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource