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

Tax policy – Labour non-dom proposals

The Shadow Chancellor has announced that a Labour government would replace resident non-domicile tax status with a new regime where the current fifteen-year "non-dom" window would be cut to five years; however, full details are yet to be published. EPrivateClient - article (paminsight.com)

Probate – waiting times

The rising number of probate applications (23,572 in January 2022, compared with 18,275 in December 2021) is hindering plans to reduce the probate application backlog (and, by implication, the current waiting time: four to sixteen weeks for online applications) according to HM Courts and Tribunals Service. The high demand is expected to decline around the end of May.  Rising England and Wales probate application volumes keep grant backlog high | STEP

Offshore – French tax reporting for trusts

On 30 March 2022, the French tax authority published new guidelines regarding the reporting obligations of trustees (often referred as the “French mini–FATCA” rules), replacing the original guidelines withdrawn in 2018. The rules affect trustees of trusts with a French nexus and result in annual reporting and event-based reporting. The guidelines now suggest that annual reporting may sometimes be required where there is no French nexus. French Tax Authority releases new guidelines impacting trust reporting requirements (ey.com)

Residency – corporate redomiciliation reform

Following a consultation which closed in January 2022, the UK government has confirmed it intends to introduce a corporate re-domiciliation regime, making it possible for companies to re-domicile and relocate to the UK. The consultation formed part of the early stages of the policy development process, and the government will now continue to refine the policy. Corporate re-domiciliation - GOV.UK (www.gov.uk)

Contentious probate – "put up or shut up" order

In Parsons v Reid (2022 EWHC 755 Ch), the trustees/ executors of William Fraser Reid applied for a "put up or shut up" order requiring: i) the deceased's daughter to decide whether to bring a claim against them and ii) protection from any claim brought by her after they had distributed the trust assets. The daughter (a beneficiary of a discretionary trust under the Will) was disputing how the trustees proposed to distribute the trust fund. Although she sent a letter of claim, she did not issue a claim or withdraw the challenge. In response to the trustees' application, the daughter argued that this was a "blessing application" as to the exercise of the trustees' discretion and, accordingly, the trustees were under a duty of full and frank disclosure. The High Court agreed and ordered the trustees to disclose the reasons for their proposed distribution of the estate, so that the merits of the daughter's objections could be considered. Trustees who asked for 'put up or shut up' order must make full disclosure first, rules EWHC | STEP

Contentious probate – fraudulent calumny case

In Whittle v Whittle, 2022 EWHC 925 Ch, the High Court ruled that a Will be overturned on the grounds of fraudulent calumny. The Will left almost all the deceased's estate to his daughter and her husband, to the exclusion of his son. The court found that the daughter had spread lies about her brother and his wife to the deceased and others. The court ordered that the deceased's conduct barred her from recovering any costs from the estate. Whittle v Whittle & Anor (Re Estate of Gerald Arthur Whittle) [2022] EWHC 925 (Ch) (12 April 2022) (bailii.org)

Tax – concession for low-income trusts and estates

On 25 April 2022, HMRC published a consultation on formalising an existing interim concession that removes trustees and personal representatives from income tax where the only income is savings interest and the tax liability is less than £100. The consultation proposes extending the concession to income from any source (not just savings) up to a "de minimis" amount to be decided. The consultation closes on 18 July 2022. HMRC consults on proposal to formalise concession benefiting low-income trusts and estates | Practical Law (thomsonreuters.com)