Welcome to our latest edition of Focus which we had thought would be very early in the New Year with changes in the proposed Pre-Budget Report having been clarified. Well, we certainly do address this, building on our first views on the proposals at the end of January, but as the consultation period finishes, matters remain far from clear!

On 18 January 2008, draft legislation was published for consultation with regard to the wide-ranging changes suggested in Mr Darling's pre-budget report for non-domiciled individuals residing in the UK.

An open letter was then received from HM Revenue & Customs Chairman, Mr Hartnett. This is discussed briefly in this edition of Focus and since its release there has been further commentary that this clarification has been misunderstood.

Given the significant impact this new legislation is going to have on the majority of our client base, and the level of uncertainty surrounding it, we are going to look at the proposed legislation in more detail in this edition of Focus to help raise some of the thorny issues that can arise and start the process of obtaining professional advice before the new legislation is implemented.

We urge any of our clients and friends who are likely to be impacted by these changes to contact us as a matter of urgency to discuss their own circumstances to ascertain how significant these changes will be to them personally.

We will also be looking at the draft legislation introduced on 24 January 2008 with regard to the new rate of capital gains tax of 18% effective from 5 April 2008, and the introduction of the 'Entrepreneurs Relief' highlighted on the same day.

Over the last three months our dedicated and enthusiastic staff have worked tirelessly to file an extremely large number of US and UK tax returns before the filing deadlines of 17 December 2007 and 31 January 2008 respectively. The company owes a great deal of gratitude for all the time and effort that everyone has put in over this period and would like to extend a huge thank you to you all.

There has been plenty of news from within the firm over the last five months, which has seen many new faces and sadly some old ones departing. After ten years with the firm we were sad to say goodbye to Daniel Hyde, who had worked through the ranks to Senior Manager before departing. Similarly, we sadly said goodbye to Tugrul Marashli and Jan Ditchburn who had been at the company for nine and nineteen years respectively and contributed an enormous amount to the growth of the company during their time here. We also said goodbye to Claire Cooper from the Audit department, Melissa Creasy, Shumiraya Musungwa, and Sonia Malik from our tax team and Jennifer Howell and Donna Lambert from our administration support.

On a positive note we have seen twenty-four new faces join us in the last three months! As you will remember from the September edition, we were in the process of recruiting a large number of new graduates as part of our graduate training programme. They have now started with us and they are Mark Allsopp, Jonathan Brown, Tahir Mahmood, Fiona McManus, Thomas Morris, Tracy Ng, Matthew Pannell, Stela Pici-Hall, Kelly Ricketts, Adam Rose and Alex Straight. We are also delighted to welcome Stephen Asher as Senior Manager. Stephen has worked in the industry for over twenty years and will help develop and complement our compensation and benefits team with his significant experience and expertise. Donal O'Brien joins us as an experienced manager specialising in UK trusts, whilst Karin Ljunggren joins us a as senior dual handler of UK and US personal tax affairs, and Kader Mohideen and Caroline Pepin join us as experienced tax professionals predominantly dealing with US personal and corporate tax. Simon Mendes has joined our Audit department as an accounts assistant. We have also welcomed Gemma Pattenden to the secretarial team, Lewis Cromwell and Kim McGhee to our database team, Sarah Jones to our reception team, Sara Ahmed to our internal accounts department and Emma Beechey and Amy Townsend as Client Support Assistants. We look forward to working with them all.

Congratulations have been passed on to Alison Hibbs and Nargis Khan for passing their final ACCA exams and becoming fully qualified in June 2007 and December 2007 respectively, as well as to Kerry-Ann Keegan, Gareth Lambe and Lucy Townsend for passing their US Enrolled Agent exams in October 2007. We are also extremely pleased that both Sarjul Patel and Matthew Norris passed their full set of ATT exams in November 2007.

Last but by no means least, we are also delighted to announce that Rhea Lucia-Hennis, James Murray and Steven Cameron have all been promoted to Manager as of 1 October 2007. This news is particularly pleasing to the firm given that they all joined us as part of our first graduate recruitment drive.

Congratulations to you all.

Following the publishing of the draft legislation, it was widely seen by professionals as considerably more far reaching in nature than had initially been expected. During the consultation period, HM Revenue & Customs (HMRC) have received responses (including from this firm) on the difficulties with their proposals particularly in the trust area. Read

By now, you will have read our special publication - Taxation of UK Non-Domiciled Individuals. The consultation period draws to a close and we await Mr Darling delivering the Budget to the House of Commons on 12 March 2008. Read

On 18 January HM Treasury released the draft legislation heralded by the Chancellor of the Exchequer in his Pre-Budget Report of 7 October 2007 as it relates to residence and to non-domiciled individuals. Read

Another major change proposed by Alistair Darling in his first pre-budget report in October 2007 was to introduce a flat rate of 18% for Capital Gains Tax (CGT). On 24 January 2008 the Chancellor confirmed the proposals of his pre-budget report and the only concession he made following considerable lobbying on behalf of small businesses was that there would be a new 'Entrepreneurs Relief' on the first £1m of gains realised by some entrepreneurs. Read