Llama drama: charity gifts and changing legal structures
The recent decision of the High Court in British Camelids Ltd v Brooke Hospital for Animals [2025] EWHC 2255 (Ch), highlights the issues which can arise when charitable beneficiaries restructure between the date of a will and the testator’s death.
The testator, who bred llamas, left her residuary estate to a list of named animal charities “such of the following as shall exist at the date of my death”. By the time she died, several of the named charities had merged, incorporated or transferred their assets to successor organisations. One wildlife sanctuary had ceased operating altogether.
The key question was whether the gifts were conditional on the continued existence of the specific legal entities named in the will or whether they were gifts for the charitable purposes those entities pursued.
The Court drew an important distinction. Where a gift is made to a corporate charity, it is treated as a gift to that entity. Two of the named beneficiaries fell into that category, including the charitable arm of the British Llama and Alpaca Association, and they were entitled to take their respective shares of residue. However, gifts to unincorporated charities are construed as gifts for their charitable purposes and the words in the will that charities “exist at the date of my death” had to be interpreted consistently with that approach. The phrase was therefore understood as referring to the continued existence of the charitable purposes, rather than the survival of a particular legal structure. As a result, the charities continuing that work were entitled to benefit under the will.
One named wildlife sanctuary had ceased to operate entirely. Even so, the gift did not automatically fail. The court indicated that its share should instead be given to other charities pursuing similar objectives.
For testators who have a strong preference that a specific institution receives their legacy, careful drafting is essential. Absent clear wording making continued existence of the named entity a condition of the gift, this decision indicates that the court may prioritise charitable purpose over corporate identity.
Court rejects claim by estranged daughter
In the recent High Court case of Cockell v Cockell & Anor [2025] EWHC 2490 (Ch), an adult child brought a claim for financial provision from her late father’s estate under the Inheritance (Provision for Family and Dependants) Act 1975, despite being estranged from him for many years. The principal asset was the family home which automatically passed to the widow on the father’s death. This left almost no estate for distribution, as the modest remaining bank balances were largely absorbed by funeral and probate expenses.
The Court refused to order that the home should be sold so that some of proceeds could be given to the daughter. It commented that it was "manifestly and clearly unjust" to deprive the elderly, unwell widow of a home she and her husband had built together, and which she relied upon for her financial security, in favour of a daughter she did not know and to whom she owed no obligation.
The Court also emphasised that, after a 40‑year marriage, prioritising his spouse over an independent, estranged adult child was entirely reasonable. The claimant’s continued contact with her father and his unfulfilled promises did not create a moral obligation sufficient to make her exclusion from the will unreasonable.
The decision reinforces that claims by adult children will only succeed where the facts clearly justify intervention by the Court.
HMRC's "non-dom" nudge campaign
For many years, UK-resident but non-UK domiciled individuals, could claim the remittance basis of taxation, under which foreign income and gains were only taxed in the UK if and when they were remitted to the UK. For long-term UK residents this came at a cost: individuals resident in at least seven of the previous nine tax years were required to pay a remittance basis charge of £30k (or more for longer-term residents) if they wished to continue claiming the remittance basis.
From 6 April 2025, the remittance basis and the wider non-dom regime were abolished and replaced with a residence-based system. In broad terms, UK tax residents are now taxed on their worldwide income and gains, subject to a limited new regime that allows individuals who have been UK tax resident for less than four years to claim relief on certain types of foreign income and gains. Although the old rules no longer apply prospectively, foreign income and gains that arose under the remittance basis can still be taxed when remitted. As a result, historic compliance remains relevant.
HMRC has recently issued a new round of 'one-to-many' (formerly known as 'nudge') letters to individuals whom it believes claimed the remittance basis in the 2023/24 tax year without paying the required remittance basis charge. The letters invite recipients to review and, if necessary, amend their self-assessment returns within 60 days, warning that failure to do so could result in assessments for additional tax, interest and penalties.
Further steps are likely to be taken by HMRC if recipients of such letters take no action, and recipients of such letters should seek expert advice as soon as possible. Where HMRC have made an error, it should be possible to correct it through prompt engagement with them. Equally, should it emerge that corrective action is required, open and early communication with HMRC will minimise the risk of matters being escalated by HMRC.
This campaign is a reminder that, although the remittance basis has been abolished, HMRC is still actively policing its legacy. For advisers, this reinforces the importance of reviewing historic remittance basis claims and residence histories particularly for long-term residents, and not assuming that the 2025 reforms have drawn a line under earlier years.
Important cryptoassets developments
Cryptoassets have become an established part of the UK's financial landscape, and there is an increasing amount of regulation in this area. One of the key regulatory developments is the UK's implementation of the Cryptoasset Reporting Framework (CARF), which is designed to strengthen global tax transparency by facilitating the automatic exchange of tax-relevant information relating to cryptoasset activity.
From 1 January 2026, the Reporting Cryptoasset Service Providers (Due Diligence and Reporting Requirements) Regulations 2025, has imposed new obligations on cryptoasset service providers and their customers..
Under CARF, UK businesses that facilitate the purchase, sale, transfer or exchange of cryptoasset (referred to as reporting cryptoasset service providers) will be required to undertake due diligence to identify cryptoasset users. This will involve collecting self-certifications from users, validating the information provided and maintaining clear audit trails of the due diligence process. Reporting cryptoasset service providers will also need to collect aggregate transaction data on their customers' cryptoasset activities.
Similarly, users will be required to provide self-certification information to reporting cryptoasset service providers. For individuals, this will include a name, date of birth, address and national insurance number or unique taxpayer reference number. For entities, this will include the business address and company registration number.
Self-certification information must be reported to HMRC by reporting cryptoasset service providers where a user is tax resident in the UK, or another jurisdiction that applies CARF. HMRC will then exchange the information with other CARF jurisdictions. Penalties for noncompliance apply to both reporting cryptoasset service providers and users and range from £100 to £5k, depending on the nature of the failure.
In recent years, the sources of information available to HMRC have given it an unprecedented insight into the financial affairs of UK taxpayers. However, HMRC's own guidance acknowledges that the rapid growth and evolution of cryptoassets has historically left tax authorities with limited means of obtaining data on cryptoasset users, creating a notable gap in their information gathering processes.
The implementation of CARF will significantly enhance HMRC's visibility in this area, enabling it to identify taxpayers with potential cryptoasset holdings more readily. It will also allow HMRC to target their compliance interventions and 'nudge' campaigns with far greater precision. Taxpayers should therefore expect a marked increase in HMRC's compliance activity in relation to cryptoassets in the year ahead, with individuals who own or trade cryptoassets, especially in significant volumes, increasingly likely to find themselves the focus of HMRC's attention.