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

Contentious probate – testamentary capacity case

Hughes v Pritchard (2022 EWCA Civ 386) is the appeal from the High Court decision last year in which it was held that the deceased did not have testamentary capacity largely because the GP who had given a positive assessment of capacity (under the "golden rule") conceded at trial that he was misled into thinking that the new Will only made minor changes, and the testator believed the same. The Court of Appeal has now reversed the earlier judgment and found that the testator did have testamentary capacity despite the GP's evidence. In doing so, the court drew valuable conclusions on whether significant changes in a new Will need to be drawn to the attention of the capacity assessor. The Court of Appeal decided not. Although it is "prudent" for a solicitor and a capacity assessor to ask the testator about changes, "there is no rule to that effect". References to the previous Will may be a helpful safeguard when assessing whether the testator is aware of potential claims on their estate (the third limb of Banks v Goodfellow), but no more than that. EWCA considers weight of doctor's evidence of testamentary capacity | STEP

Trusts – HMRC Trust Register guidance

HMRC has released updates to its Trust Registration Service Manual. This includes an explanation that trusts are excluded from the requirement to register as express trusts on the Trust Registration Service ("TRS"), if the trust is established in an EEA member state and is required to be registered on an equivalent beneficial ownership register in that state (TRSM23150). The Manual also includes clarification that trusts holding sums or assets of a UK registered pension scheme are excluded from registration as express trusts (TRSM23070). The Manual also incorporates examples on trusts created by Will and in what circumstances these need to be registered (TRSM23020). Updates - Trust Registration Service Manual - HMRC internal manual - GOV.UK (www.gov.uk).

Tax – new ATED rates for 2022

On 28 March, The Annual Tax on Enveloped Dwellings (Indexation of Annual Chargeable Amounts) Order 2022 was made setting the chargeable amounts for chargeable periods on or after 1 April 2022. By way of comparison, the highest charge (£244,750) has increased by £7,350. The new charges are:

  • £3,800: properties valued at more than £500,000 but not more than £1 million
  • £7,700: properties valued at more than £1 million but not more than £2 million
  • £26,050: properties valued at more than £2 million but not more than £5 million
  • £60,900: properties valued at more than £5 million but not more than £10 million
  • £122,250: properties valued at more than £10 million but not more than £20 million
  • £244,750: properties valued at more than £20 million.

Charities – guidance on meetings

On 25 March 2022, the Charity Commission updated its Covid-19 guidance to warn charities that its lenient approach to charities holding meetings outside the terms of their governing documents is coming to an end. From 22 April 2022, the Commission expects all charities that want to postpone or cancel a meeting, or to hold meetings online, by telephone or on a hybrid basis, to make sure they have power to do so in their governing document. As a result, charities may need to review and change their governing documents to expressly include such powers. COVID-19: lenient approach to charity meetings held outside terms of governing documents ends on 21 April 2022 | Practical Law (thomsonreuters.com)

Tax – crypto assets

The OECD has published a public consultation document outlining a proposed framework for the reporting of crypto assets. It also proposes amending the Common Reporting Standard ("CRS") so that crypto asset trading information is automatically exchanged between countries. The below article highlights that crypto assets are becoming increasingly hard to hide, and although some people may be tempted to use the US as a crypto haven because it is not a CRS signatory, this will not work: the IRS is already sharing bulk crypto data with HMRC under the UK/US information sharing agreement. EPrivateClient - article (paminsight.com)