Private Client Legal Updates (3 August 2022)

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

Offshore – register of overseas entities

The Register of Overseas Entities ("ROE") went live at 9am on Monday 1 August. Going forwards, affected overseas entities that want to buy, sell or transfer property or land in the UK must be on the ROE. Any overseas entities that already holds an interest in English land that was acquired on or after 1 January 1999 is required to be on the ROE by 31 January 2023. Other ROE developments this week include the following.

• On 1 August, the Department for Business, Energy and Industrial Strategy (BEIS) published Guidance for the Registration of Overseas Entities on the UK Register of Overseas Entities Technical guidance for registration and verification on the ROE. This includes how to identify a beneficial owner, example scenarios, the definition of "significant influence or control" including in the context of trusts, and how to act as a verification agent.
• On 28 July, STEP produced guidance entitled "UK Register of Overseas Entities - Verification of trust information" to assist members with the verification process.
• On 29 July, the Law Society published "Economic Crime (Transparency and Enforcement) Act 2022 – guidance for solicitors when undertaking verification responsibilities" setting out considerations for solicitors undertaking verification responsibilities in respect of the ROE, including the risks involved.
• On 27 July 2022, a further statutory instrument under the ROE's enabling legislation (Economic Crime (Transparency and Enforcement) Act 2022) was published - the Register of Overseas Entities (Delivery, Protection and Trust Services) Regulations 2022. The regulations include provisions concerning the electronic delivery of documents, the protection of information and the definition of registrable beneficial owners.

Register of overseas entities: delivery, protection and trust services regulations | Practical Law (thomsonreuters.com)

Probate – grant of probate waiting times

The latest HM Courts and Tribunals Service ("HMCTS") data shows digital probate applications took 4.1 weeks without stops and 13.5 weeks when stopped. Paper applications stand at 8.9 weeks without stops and 22.8 weeks with stops. Despite these averages, HMCTS acknowledges that performance levels differ making it difficult to provide realistic timescales to clients. England and Wales probate delays now predominantly affecting paper applications | STEP; Probate service update – July 2022 | The Law Society

Probate – applications for grants ad colligenda bona

HMCTS has issued further information on how to make an application for an urgent or exceptional grant (grant ad colligenda bona). Applicants are advised to put “URGENT AD COLLIGENDA BONA” in the subject line of their email, and include the case number, deceased details, and where they sent the application. HMCTS aim to telephone within 48 hours to confirm receipt of the application. Probate service update – July 2022 | The Law Society

Trusts – TRS applications where there is an existing UTR

HMRC has provided clarification on the procedure for registering a non-taxable trust with the Trusts Registration Service ("TRS") where the trust already has a unique taxpayer reference ("UTR") albeit that the UTR is dormant/ historic. Trustees of such trusts should answer "No" to the question on the TRS online form as to whether the trust has a UTR. HMRC will update its guidance in the Trusts Registration Service Manual to clarify this point. TRS: ICAEW reports HMRC clarification on registration process for non-taxable trusts with pre-existing UTR | Practical Law (thomsonreuters.com)

Estate planning – digital assets consultation

On 28 July, the Law Commission launched a consultation into the law governing digital assets. The Law Commission issued a call for evidence on this in April 2021 and published an interim report in November 2021. The Law Commission is exploring in particular whether a third "data objects" category of personal property besides "things in possession" and "things in action" may have to be recognised in English and Welsh law to cope with digital assets, focussing on the concept of "control" rather than possession. The consultation closes on 4 November 2022. Digital assets: Law Commission consults on its proposals for reform | Practical Law (thomsonreuters.com); New category of personal property proposed for crypto law | News | Law Gazette

Property – severance of joint tenancy

Pile v Pile [2022] EWHC 2036 relates to whether there is a breach of trust where one party of joint tenancy serves a notice to quit on the other joint tenant in order to obtain a personal benefit for themselves (in this case, to obtain another lease). The High Court held that there was no such breach of trust in this case, although there may have been if the trust included additional fiduciary duties, such as where property is held for a minor child or a partnership. A joint tenant can serve notice to quit without breach of trust (High Court) | Practical Law (thomsonreuters.com)