A summary of legal updates in the Private Client industry over the past month is as follows.
Professional executors and charging clauses
Brealey v Shepherd, 2021 EWHC B26 relates to whether a professional executor can charge fees for acting in the role of executor, as distinct from their firm's fees for administering the estate (and their own time spent as a solicitor on that file). In this case, the Will appointed three executors: a layperson, the professional executor and the partners in the professional executor's law firm. The Will did not include a charging clause meaning that, although the professional executor's firm could charge their fees on the basis of their retainer with the executors, there was no basis for the professional executor to charge a separate fee. Of the fees charged by the law firm, 70% related to the executor's fee for his role as executor. Without an express charging clause, the professional was only entitled to out-of-pocket expenses unless s.29 of the Trustee Act 2000 applied or the court could use its inherent jurisdiction, but both routes were denied by the Court. Court's inherent jurisdiction unavailable to allow professional executor's fees to be paid where no charging clause (High Court) | Practical Law (thomsonreuters.com)
Probate waiting times
The latest family court statistics for England and Wales show that the average delay between application and grant was about nine weeks for probate and ten to twelve weeks for letters of administration. Family Court Statistics Quarterly: July to September 2021 - GOV.UK (www.gov.uk)
Remittance basis loans treatment
ICAEW, CIOT and STEP have published joint guidance on HMRC's most recent interpretation of the tax treatment of loans secured on foreign income or gains ("FIGs"). HMRC's original view, post Finance Act 2008, was that unremitted FIGs used to secure a debt in the UK or abroad, and which were brought into or used in the UK, would be treated as a remittance unless the loan principal and interest was paid in a timely manner. In 2014, HMRC withdrew this concessionary treatment and announced that funds brought to or used in the UK on or after 4 August 2014 from a loan secured by FIGs would be treated as a remittance. However, amendments made to HMRC's Residence, Domicile and Remittance Basis Manual (RDRM37050 - Appendix 5) suggest that HMRC changed its approach again at some point between 17 December 2020 and 21 July 2021. The current approach is that all FIGs used to secure a relevant debt will be treated as a remittance if 100% of the borrowed money is brought to the UK. If some of the borrowed money is not brought to the UK, the amount treated as remitted is capped at the value of the relevant debt (s.809P(10) of the Income Tax Act 2007). Remittance basis: professional bodies publish guidance on treatment of loans secured on foreign income or gains | Practical Law (thomsonreuters.com)
Secret Trust case
Mattingley v Bugeja  EWHC 3353 is a "secret trust" case which gives a reminder of the rules in this area. A "secret trust" is a trust outside of a Will designed to keep the identity of the beneficiary unknown. In this case, the testator gifted a 71% share of a property to her sister in her Will. The testator's daughter claimed that the sister held 26.625% of the property on trust for her, mainly based on conversations which were said to have taken place before and after the Will was drafted. The court found that the evidence of the daughter (and her father) was unreliable and did not support the finding of a secret trust: "They had managed to persuade themselves, over time and by considerable study of the documents, that [the testator] told them things that went beyond what she in fact told them." The case is a reminder of the need for clear evidence to support the existence of a secret trust.
New OPG form for reporting concerns about attorneys
On 17 December 2021, the OPG published new form OPG130 for use by anyone wishing to raise a concern about the behaviour of an attorney appointed under an LPA or EPA or a court-appointed deputy. Examples of concerns include misuse of a donor’s money or decisions that are not in a donor’s best interests. If the concern is that the LPA is being made illegally, the form can be lodged before an LPA is registered. Report a concern - GOV.UK (www.gov.uk)
Digital assets – succession to Apple iCloud accounts
Apple has released a digital legacy feature allowing account holders to nominate up to five family members or friends who will be able to access their account after they die. These contacts will be given a code allowing them to access data stored in iCloud, on production of a copy of the death certificate. Previously, a court order would have been required. Progress on digital legacy planning from internet service providers | The STEP Blog