A summary of key legal updates for the Private Client sector over the past week is as follows.  

Solicitor undertakings

Harcus Sinclair v Your Lawyers (2021) UKSC 32 relates to the enforceability of undertakings given by solicitors working in a Limited Liability Partnership ("LLP"). An undertaking given by an individual solicitor is enforceable by the recipient by application to the court for a summary order: a quicker remedy than suing for breach of contract or invoking professional misconduct proceedings. The Harcus Sinclair case involved (in part) whether this same enforceability route could be used for solicitors giving an undertaking for and on behalf of an LLP. The Supreme Court has ruled that it cannot, meaning that undertakings given by LLPs will be more difficult to enforce than those given by individual solicitors. The Supreme Court recognised that this is unsatisfactory and represents a "lacuna" in the law. UKSC confirms undertakings by solicitors working in LLPs are not directly enforceable | STEP

Non-dom statistics

HMRC estimates that the number of non-UK domiciled ("non-dom") taxpayers in the UK was 75,700 in tax year 2019/20, down from 78,600 in the previous year. The numbers dropped significantly after the non-dom tax reforms in April 2017 but these figures show that the decline has now levelled out. The decline is attributed to affected taxpayers becoming UK domiciled under the new rules, or no longer paying tax in the UK. EPrivateClient - article (paminsight.com)

Family Investment Companies

A specialist unit set up by HMRC in 2019 to examine the tax avoidance risks posed by family investment companies ("FICs") has been wound up after the findings of the unit concluded that there is no evidence of correlation between the use of FICs and non-compliant behaviour. The existence of the unit sparked concern amongst high-net-worth individuals in setting up such vehicles, as well as about the possibility of HMRC investigating existing FICs. However, the government has not ruled out bringing into play anti-avoidance rules for FICs in the future. HMRC closes down unit investigating tax avoidance risk in FICs | STEP

Court of Protection and Judicial Review

The High Court has held in SM v Court of Protection and another [2021] EWHC 2046 (Admin) that unappealable decisions of the Court of Protection ("COP") cannot be judicially reviewed in the High Court. This is because, under s.47 of the Mental Capacity Act 2005, the COP has the same powers, rights, privileges and authority as the High Court. COP unappealable decisions not judicially reviewable but Family Court unappealable decisions may be (High Court) | Practical Law (thomsonreuters.com)

Small religious charities – compulsory registration with Charity Commission

The Department for Digital, Culture, Media and Sport has said that they will work with the Charity Commission to develop a plan for phasing in compulsory registration for small religious charities over the next ten years. There is currently a temporary exception from compulsory registration (expiring in 2031) for churches and chapels belonging to some Christian denominations that have a gross annual income of £100,000 or less. Small religious charities: Charity Commission and DCMS planning phased registration over next ten years | Practical Law (thomsonreuters.com)