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Private Client Legal Updates (20 October 2022)

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

Tax policy – further mini-Budget U-turns

In a precursor to what was to come today with Liz Truss' resignation as Prime Minister, on 14 and 17 October 2022, the new Chancellor, Jeremy Hunt, announced further U-turns on the mini-Budget announcements made on 23 September. These are:

  • corporation tax – the top rate will increase from 19% to 25% from April 2023 (for companies earning annual profits above £50,000) as planned, reversing the contrary announcement in the mini-Budget;
  • income tax - the basic rate will remain at 20% indefinitely, not cut to 19% as per the mini-Budget; and
  • dividend tax rate - the plan to cut the rates of income tax on dividends by 1.25% from April 2023 will no longer go ahead and the current rates, which took effect in April 2022, will remain in place.

The mini-Budget announcements that are still going ahead are: the abolition of stamp duty land tax for properties under £250,000 in England and Northern Ireland; the abolition of the 1.25% increase in national insurance rates that took effect in April 2022; and the cancellation of the Health and Social Care levy. For trusts, the rate at which they pay income tax will remain as it is currently, with the trust rate being 45% (not 40% as per the mini-Budget) and the dividend trust rate being 39.35% (not 32.5% as per the mini-Budget). The Chancellor’s medium-term fiscal plan is still scheduled for 31 October and will be accompanied by forecasts from the Office for Budget Responsibility. It is possible that there will be further tax announcements on this date. UK government reverses IR35 extension repeal plans | STEP; Government announces reversal of Growth Plan tax measures | Practical Law (

Contentious estates – proprietary estoppel case

On 19 October, judgment was given in the much-anticipated Supreme Court case of Guest v Guest [2022] UKSC 27. This is a proprietary estoppel case involving a farm where the owners had given assurances to their son over many years (during which he worked on the farm for little financial reward) that he would inherit a substantial share. Following a breakdown in relations, the parents had cut the son out of their Wills meaning that he would not receive any share of the farm after their deaths. The judge at first instance ordered that the parents make a compensatory lump sum payment to the son of about £1.3m. The consequence of that order was that the farm would have to be sold in order to realise the lump sum. The parents appealed to the Court of Appeal where their appeal was dismissed. The parents then appealed to the Supreme Court. This appeal has been allowed in part with the parents being permitted to choose between two alternate remedies: either putting the farm into trust in favour of their children (subject to a life interest for the parents) or paying compensation to the son but with a reduction to reflect his earlier-than-anticipated receipt (a point not taken into account in the original ruling). If the compensation amount cannot be agreed, it will be referred to the Chancery Division. Guest and another (Appellants) v Guest (Respondent) - The Supreme Court

Offshore – statutory residence test and HMRC letters

HMRC is sending letters to taxpayers whose tax returns between 2020 and 2022 include claims for "exceptional circumstances" under the statutory residence test ("SRT"), discounting days spent in the UK during the Covid pandemic that would otherwise have counted towards their tax residence. In an Agent Update, HMRC report that they have seen some customers including days that go above the 60-day limit on "exceptional circumstances" and some including days that go above the 57-day limit for Covid related work in 2020/21. It is understood that the letters advise taxpayers with a clear error to amend their tax return within 60 days and reconsider their residence position. All other taxpayers will receive an educational letter setting out the "exceptional circumstances" guidance. Where the taxpayer has an acting agent, that agent will receive a copy of the letter. HMRC queries 'exceptional circumstances' claims relating to tax residence test | STEP; Issue 101 of Agent Update - GOV.UK (

Trusts – new question on TRS form

On 18 October, HMRC confirmed that it has included a new question on the Trust Registration Service ("TRS") registration form for taxable trusts on whether the trust is an excluded trust under Schedule 3A of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. When trustees or agents of a registered taxable trust next log in to the TRS they will be asked to confirm if the trust is a Schedule 3A trust. The new question is required because certain taxable trusts that meet one of the exclusions, although registrable, are exempt from the requirement to share trust data with third parties (see HMRC's TRS Manual at TRSM 60010). TRS: new question to confirm taxable trusts excluded under Schedule 3A MLR 2017 not subject to data sharing | Practical Law (

Contentious estates – fraudulent calumny case

Sharpe v Dyson (2022 EWHC 2462 Ch) is an unsuccessful fraudulent calumny case. It relates to a 2019 Will which left the residue of the estate to the deceased's former cohabitant's sister. The beneficiaries of the deceased's earlier Will challenged the 2019 Will on grounds of fraudulent calumny alleging that the cohabitant's sister had poisoned the deceased's mind against them. The judge dismissed the claim and upheld the 2019 Will. Sharpe v Dyson & Anor [2022] EWHC 2462 (Ch) (04 October 2022) (

Trusts – number of UK trusts continues decline

The total number of trusts and estates that have made self-assessment returns has continued to decline in 2020/21, reducing by 6% in comparison to the previous year. This decline continues the long term established trend across all the main types of trust, with the total number of trusts and estates submitting self-assessment returns reducing by 14% since the tax year ending 2016. Statistics on trusts in the UK October 2022 - GOV.UK (

Offshore – non-dom statistics

According to new research, the number of UK non-domiciled taxpayers has continued to fall with a recent 10.7% annual drop in figures. The currently reported figure of 68,300 non-domiciled taxpayers in the UK (80% of which are UK residents) is 44.5% less than the peak numbers recorded in 2015 before the non-dom tax reforms. EPrivateClient - article (

Probate – new caveat forms

On 10 October, HMCTS announced that it is issuing simplified probate caveat application forms from 25 October 2022. Applicants (professional and lay) will be able to use the updated PA8A form to apply to stop an application for a grant of representation for up to six months and apply for caveat extensions using the new PA8B form. Currently, practitioners use a different form to enter a caveat to that used by personal applicants. These changes were first announced earlier on this year. Form PA8A: Apply to stop a grant of probate by post - GOV.UK (; Stopping a probate application: Challenge someone else's probate application - GOV.UK (; Caveats: HMCTS introduces forms for use by both practitioners and personal applicants | Practical Law (


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