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

Tax policy – mini Budget and tax cuts

Following the election of Liz Truss as leader of the Conservative party and the new Prime Minister, there may be an emergency "mini Budget" later this month. The new Chancellor, Kwasi Kwarteng, is expected to use this to announce tax cuts, including a £30billion reversal of national insurance and corporation tax rises. National insurance rates rose by 1.25% in April; whilst from 1 April 2023, the corporation tax rate is scheduled to increase from 19% to 25% for companies whose taxable profits exceed £250,000. Liz Truss takes office with vow to steer Britain out of energy storm | Financial Times (ft.com)

Trusts – Irish Trust Register

The Republic of Ireland's tax authority has told trustees of UK trusts holding Irish offshore bonds that they do not need to register on Ireland's Trust Register (the Central Register of Beneficial Ownership of Trusts – "CRBOT") for the time being, because of the need for an Irish tax number which most UK resident trustees will not have. Such trusts are likely to need to register on the UK Trust Register as well. The latest guidance from the Irish tax authority is that it is working on access to the CRBOT for UK trustees and will not levy penalties for non-registration in the meantime. UK trust representatives who have not yet applied for an Irish tax number, do not now need to do so. The same guidance also clarifies the position where a UK trust (with relevant Irish connections) is registered on the Trust Register of another EU member state. In such a case, the trustees are not required to register with the CRBOT as long as the information on the member state register is the same as is required for the CRBOT and the trustees have a certificate of registration. Ireland suspends non-registration penalties for UK trustees until registration is simplified | STEP

Trusts – disclosure of TRS data

On 1 September, HMRC published guidance on how to submit a trust data request to HMRC to obtain information on a trust held on the Trust Register, and what details HMRC will share. The guidance makes clear that the trust data request must either be a "legitimate interest trust data request" (which requires the trust to be linked with money laundering or terrorist financing) or an "offshore company trust data request" (which requires the trust to have a controlling interest in an offshore company outside of the EEA). The guidance also makes clear that HMRC will not share information about individuals who are under 18 or are unable to make decisions due to their mental state; or where the information will expose an individual to a risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation. Ask HMRC for information about a trust - GOV.UK (www.gov.uk)

Probate – conflict situation involving deathbed gift

The Law Society Gazette has reported on a case where a law firm admitted to acting for different parties with a conflict of interest in an estate matter. The firm had been instructed by the personal representative ("PR") of an estate to conduct the administration. The PR claimed that the deceased had made a deathbed gift to him of £550,000 (the vast majority of the estate) and instructed the firm to advise him on this issue. The firm had a duty to act in the best interests of the beneficiaries of estate and their client's claim put them in a position of conflict. Although the firm obtained counsel's advice on the validity of the deathbed gift, the firm did not identify at any stage that there was a conflict in acting for the PR in his personal capacity and his instructions to act in the administration of the estate. This breached two SRA principles. The SRA, taking into account the lack of any wilful decision to ignore the conflict, deemed a £2,000 fine (plus costs) appropriate without a referral to the Solicitors Disciplinary Tribunal. Firm avoids tribunal after admitting to acting in conflict | News | Law Gazette

Tax – HMRC nudge letters to PSCs 

HMRC are sending out nudge letters to individuals who did not report any share disposals in their 2020/21 tax returns, despite having ceased to be a "person of significant control" ("PSC") of a privately owned company during the tax year. The letter notes that on ceasing control, the PSC may have disposed of shares and if so, they should check whether they need to amend their self-assessment tax return as there may be capital gains tax to pay. Affected recipients of the letter are being advised to amend their tax returns by 31 January 2023. CGT nudge letters sent to UK PSCs | STEP