A summary of legal updates for the Private Client industry over the past two weeks is as follows.
Register of Overseas Entities
On 28 February, the Economic Crime (Transparency and Enforcement) Bill was introduced to parliament to implement the long-awaited Register of Overseas Entities: a register held by Companies House listing the beneficial owners of foreign companies (or similar legal entities) holding property in England, Scotland and Wales. The publication of the legislation was accelerated by the wave of sanctions triggered by the Russia-Ukraine conflict. The Register will apply retrospectively to property bought by overseas entities up to 20 years ago in England and Wales, and since December 2014 in Scotland. Entities that do not declare their "beneficial owner" will face restrictions over selling their property, and those who break the rules could face up to five years in prison. UK government to progress Register of Overseas Entities | STEP; Economic Crime (Transparency and Enforcement) Bill 2022: overarching documents - GOV.UK (www.gov.uk)
Tier 1 Investor visa
On 17 February, the government closed the Tier 1 Investor visa route to all new applicants from all nationalities with immediate effect, citing concerns that it gives opportunities for "corrupt elites" to stay in the country. Settlement in the UK will now be conditional on applicants "executing an investment strategy that can show genuine job creation and other tangible economic impacts". Tier 1 Investor Visa route closes over security concerns - GOV.UK (www.gov.uk)
Trust Register guidance
HMRC has updated its Trust Registration Service Manual with several amendments. There is now confirmation in the Manual that registrable non-taxable express trusts that were in existence on or after 6 October 2020, but are wound up before the registration deadline of 1 September 2022, must still be registered and the trust record immediately closed (TRSM40010). Other updates relate to bare trusts of land and the circumstances in which an exclusion from registration may apply (TRSM23050); the exclusion that may apply to trusts of land where there is more than four trustees (TRSM23050); and how the Trust Register rules apply to non-UK trusts of enveloped UK property (TRSM25030).
Finance Bill 2022
On 24 February 2022, the Finance Bill 2022 received Royal Assent and became the Finance Act 2022. The Act includes the income tax rates for 2022/23 and the extension of the time limit for capital gains tax ("CGT") returns in respect of disposals of residential property from 30 days to 60 days. Private client tax legislation tracker 2021-22 | Practical Law (thomsonreuters.com)
Probate – latest timeframes for applications
The latest update from HM Courts and Tribunals Service ("HMCTS") and the probate service user group is that latest timeframes for applications for a grant of probate are:
- digital applications - 15.4 weeks when stopped, and 3.9 weeks without stops
- paper applications - 21.6 weeks when stopped, and 8.4 weeks without stops
HMCTS has emphasised that all evidence to support an online application should be sent to the Harlow registry, not the Newcastle registry, and that practitioners should not send a paper/hard copy of the application with the documents as this causes duplicates. Probate service update – January 2022 | The Law Society
CGT – latest statistics
Receipts from CGT increased by 20% to a record £12.9 billion in the year ending 31 January 2022, partly due to the reduction in the entrepreneurs’ relief (now known as "business asset disposal relief") lifetime limit from £10 million to £1 million on business disposals. UK’s CGT bills hit record £12.9bn – up 20% in just a year | Insights | UHY Hacker Young (uhy-uk.com)