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

Wills – testamentary capacity case

Boast v Ballardi & Ors [2022] EWHC 1533 (Ch) (28 June 2022) (bailii.org) relates to the testamentary capacity of a 95-year old testator when he made his Will in 2013. The Will was being challenged by the sole beneficiary of the testator's previous Will (made in 2006). There was evidence that the testator was suffering from dementia and paranoid delusions in 2013. Although the solicitor expressed concern about the testator's mental state, he did not investigate whether the testator's delusions were capable of affecting his testamentary decisions, either by asking further questions, or by instructing a qualified medical practitioner to make an assessment, and the court criticised him for this. The court found that the testator lacked testamentary capacity and pronounced in favour of the 2006 Will. Will cancelled after solicitor failed to probe ‘paranoid delusions’ | News | Law Gazette

Offshore – register of overseas entities

The first regulations under the Economic Crime (Transparency and Enforcement) Act 2022 to introduce the new Register of Overseas Entities ("ROE") have been published. These are:

Regulation 1 provides for a protection regime to allow individuals to apply to have their information made unavailable for public inspection. The regulations also provide that regulated overseas corporate trustees fall within the definition of registrable beneficial owners. Regulation 2 covers verification of information and requires a UK-based "relevant person" (such as a lawyer, accountant or bank) to verify the data of a registrable overseas entity before it is submitted for registration. Regulation 3 provides for the necessary amendment of some Land Registry forms. All three regulations will come into force on the same day as the ROE provisions of the ECA 2022. There is still no announcement of when this will be, but a commencement order is expected soon, together with further guidance.

Register of overseas entities: verification and provision of information regulations | Practical Law (thomsonreuters.com); Register of overseas entities: Land Registration (Amendment) Rules 2022 made | Practical Law (thomsonreuters.com)

Trusts - TRS and NRCGT

HMRC has amended its Trust Registration Service ("TRS") manual to add guidance on non-UK trusts and non-resident capital gains tax ("NRCGT") on UK property. Prior to this, there was some confusion as the "CGT on UK Property Account" online portal requires trustees to be registered on the TRS in order to submit a NRCGT return. Offshore trustees are not required to register on the TRS if the NRCGT arises from non-UK assets. To get around this problem, the TRS Manual now requires offshore trustees that have incurred a NRCGT liability arising from a disposal of non-UK shares to notionally register on the TRS purely for obtaining a Unique Taxpayer Reference ("UTR") number so that they can create a "CGT on UK Property Account" and pay the tax due. Trusts registered for this purpose are not required to keep the register up to date and are not subject to the third party access provisions (TRSM60000). Where offshore trustees need to submit a NRCGT nil return but there is no NRCGT to pay (and no obligation to register on the TRS), trustees should request a "CGT on UK Property Account" paper return rather than doing this online (as the latter will require a UTR). Paper returns can be requested by contacting HMRC. TRSM25030 - Types of trust that need to be registered: contents: registrable taxable trusts: contents: when does a trust have a liability to UK taxation trigger the requirement to register - HMRC internal manual - GOV.UK (www.gov.uk)

Probate – waiting times 

Grants of probate took an average of eight weeks to be issued during the first quarter of 2022, a similar figure to that of the preceding quarter. Family Court Statistics Quarterly: January to March 2022 - GOV.UK (www.gov.uk)

LPAs – waiting times 

The OPG is currently taking an average of 82 days to register Lasting Powers of Attorney ("LPAs") in England and Wales, more than twice the official target time, according to a parliamentary answer from the Parliamentary Under Secretary of State (Ministry of Justice). The long waiting time is said to be due in part to the pandemic but also the OPG's statutory obligation to carry out checks and to wait four weeks to allow for objections. LPA registration time in England and Wales now twice the official target of 40 days | STEP

LPAs – registration statistics

According to recent data, LPA registrations remain 18.8% below pre-pandemic levels. The data shows that fewer than one in three baby boomers (those between 57 and 75) have registered. One reason for low LPA applications is thought to be that not enough people understand the process and its importance. EPrivateClient - article (paminsight.com)

Residence – new online assessment tool

HMRC has launched a new tool to help customers determine their tax residence status based on the statutory residence test, where the taxpayer's affairs are straightforward. Which tax year do you want to check your UK residence status for? – Guidance – GOV.UK

Non-doms – HMRC "nudge" letters on RBC

In June 2022, HMRC began to send letters to taxpayers and their agents identified as needing to pay the remittance basis charge ("RBC") or move to the arising basis of taxation. The letters are going out to those who have been tax resident in the UK for seven years out of the preceding nine years, and 12 out of the proceeding 14 years, giving taxpayers 60 days to amend their 2020/21 return. Agent Update: issue 97 - GOV.UK (www.gov.uk)