A summary of legal updates for the Private Client industry over the past two weeks is as follows.
Contentious probate – electronic copy of draft Will admitted to probate
Cooper v Chapman, 2022 EWHC 1000EWHC rules will validly executed despite absence of original and copies | STEP
is an unusual case where an electronic copy of a draft Will, which was allegedly printed and executed in the presence of witnesses, has been accepted by the High Court as valid despite there being no executed version or physical copy. The deceased drafted the Will on his computer in 2018 giving his estate to his new partner but the executed original was never found. The partner contended that the draft electronic Will was valid under s.9 of the Wills Act 1837. Computer experts examined the computer file and the partner was able to produce witnesses (relatives of hers), who confirmed that they had witnessed the deceased signing the Will. The judge concluded it was "improbable" that the witnesses were lying. He also concluded on the balance of probabilities that the Will was correctly executed and attested. The judge also decided that it was improbable that the deceased had later destroyed (and revoked) the Will himself.
Offshore – treatment of loans to remittance-basis users
STEP, CIOT and ICAEW have updated their guidance note on the treatment of "relevant debts" to include feedback from HMRC. The tax treatment of such loans has been uncertain for some time due to apparent changes of guidance from HMRC. The issue is the extent to which foreign income and gains ("FIGs") can be treated as remitted to the UK if FIGs serve as collateral for a relevant debt. In 2008, HMRC’s published practice was to treat FIGs as not remitted, as long as the loan principal and interest were paid in a timely manner. In August 2014, HMRC adopted the position that such FIGs were to be treated as remitted but capped at the value of the relevant debt or such of it as was brought to the UK. Between 17 December 2020 and 21 July 2021, changes to HMRC’s Residence, Domicile and Remittance Basis Manual ("RDRM") indicated that HMRC is now of the view that all FIGs used in respect of a relevant debt are to be treated as remitted if 100% of the borrowed money is brought to the UK, otherwise the cap still applies. HMRC's feedback is that it "has applied a consistent approach to the remittance basis treatment of foreign income or gains used as loan security since publication of the HMRC notices on 4 August 2014 and 15 October 2015. The updates to the RDRM made in December 2020 and July 2021 were to clarify and correct existing guidance and were not made because HMRC had changed its position." HMRC has also given comments on two relevant debt scenarios in the Appendix to the guidance note. treatment-of-loans-secured-on-foreign-income-or-gains-by-remittance-basis-users-april-2022-update_0.pdf (step.org)
Probate – improvements to the probate service
On 4 May, HM Courts & Tribunals Service published a letter to stakeholders on planned improvements to the probate service. This includes the announcement that the ability to share new online probate cases within an organisation will be available from May/June 2022. It was also announced that, in summer 2022, HMCTS will improve the process of submitting paper caveats including the publication of a new PA8B form for caveat extension applications. probate_stakeholder-letter_may_2022.pdf (step.org)
Trust Administration – timeframes and clearances for IHT100 forms
HMRC has explained in its Trusts and Estates Newsletter (April 2022) that, for IHT100s received after 20 April 2022, HMRC will write to confirm receipt and provide a date (twelve weeks in the future) by which HMRC will respond. If there is no response, it can be assumed HMRC does not have any questions. In respect of clearances generally, in cases where HMRC tells the taxpayer that it has opened a compliance check into a form IHT100, HMRC will write to confirm when the check is ended. In cases that do not involve an HMRC query, HMRC will not issue a standard clearance letter and if the taxpayer wants this confirmation, they will need to make the clearance application on form IHT30. HMRC Trusts and Estates Newsletter: April 2022 - GOV.UK (www.gov.uk)
Charities – responsible investing
In Butler-Sloss and others v Charity Commission for England and Wales and another  EWHC 974, the High Court has made a declaration permitting the trustees of two charitable trusts to adopt an investment policy that prioritises climate change outcomes at the risk of diminishing financial returns. Charity trustees normally exercise their powers of investment by applying the standard investment criteria in s.4 of Trustee Act 2000 and taking appropriate advice to produce the best financial return at an appropriate level of risk; however, where trustees are of the reasonable view that certain investments potentially conflict with the charitable purposes, they have a discretion as to whether to exclude them. This widely anticipated decision clarifies that, provided the trustees undertake a proper balancing exercise in respect of this discretion, they cannot be criticised, even if the outcome may result in lower financial returns. It is now expected that the Charity Commission will publish its revised guidance on charities and investment matters (CC14), having taken this decision into account. Charity trustees permitted to adopt climate change focused investment policy (High Court) | Practical Law (thomsonreuters.com)