Policy News

STEP responds to the Ministry of Justice’s consultation on reforming the permanent storage and retention of original will documents

STEP has responded to the Ministry of Justice’s (MoJ) consultation on the permanent storage and retention of original will documents. Under this reform, the MoJ will covert will documents submitted in support of probate would be converted to digital form, with the paper original being destroyed except for the wills of famous people. These records date back to 1858. STEP seeks clarification on what constitutes a famous person as a person’s fame can become well known after their death, and moreover does not feel the government should be determining this. STEP also urges the MoJ to conduct a thorough cost-benefit analysis on digitising will documents, as previous digitisation initiatives have drawn criticism for their costly implementation.

STEP responds to the Department of Levelling-up, Housing and Communities’ consultation on transparency of land ownership involving trusts

STEP has responded to a cross-departmental consultation exploring new policy settings to increase transparency on who owns and controls land in the United Kingdom. The consultation paper considers extending access to trust information currently held on the United Kingdom Register of Overseas Entities (ROE), and by making all trust information public by default. STEP’s consultation response expressed concern that many individuals who do not own, control or exercise any influence over land, would be compromised in this regime change simply because they are identified as a beneficial owner. While STEP agrees that certain information about trusts that have an interest in land should be made public, we believe the unintended consequences could also lead to the misuse of data for fraudulent or malicious purposes. STEP has urged the government to consider these risks in the next stage of their consultation process.

STEP response to House of Commons Justice Select Committee Inquiry into the Probate Service

STEP’s response proposes outsourcing complex cases to a limited number of experienced law firms who have the practical understanding and ability to tackle the backlog of cases in a desirable timeframe. STEP would work with the Law Society and other stakeholder organisations to identify the most appropriate firms to participate in this scheme.

The consultation also covered experiences of using the probate online portal and whether this improved the quality of the service. Currently, the probate portal has been insufficiently tested and developed when it was launched for lay personal representatives and probate practitioners.

STEP’s view is that the probate portal does not provide value for money or improved access to justice. While the probate portal could be improved, STEP suggests that technology should only be introduced after being thoroughly tested with its users in the legal community. Thought needs to be given to those for whom the service is being provided.

Consequently, STEP notes that the digitisation of the probate process has had a particular negative effect on those who struggle with technology, which would therefore disproportionately affect older and disabled people.

View consultation response

STEP submits its comments on testamentary capacity to the Law Commission of England and Wales

STEP has released a paper to the Law Commission of England and Wales to put forward its comments on testamentary capacity, which was an issue raised in its supplementary consultation on will reform. There are currently two tests for testamentary capacity, which are found in Banks v Goodfellow (Banks) and in the Mental Capacity Act 2005 (MCA 2005). Recent case law and commentary suggests there is a practical problem with having two tests in that there is inconsistent application of both tests. STEP therefore recommends the implementation of a single statutory test that is based on the Banks test, but such test would need to clarify certain elements i.e. it is a four-limbed test and factors other than delusion or disorder of the mind may be considered.

8 December 2023 – STEP responds to the Law Commission’s Supplementary Consultation on Will Reform

STEP has responded to the Law Commission of England and Wales’ supplementary consultation on will reform. The two main issues this consultation examined were the issue of electronic wills and the whether a marriage or civil partnership should revoke an existing will. STEP surveyed its members on these issues, and while our members did not have an appetite for provisions being made for electronic wills, STEP acknowledges there is a need for them when considering the heightened use of technology in society. STEP believes that section 18 of the Wills Act should be retained, but also feels there is a need to raise public awareness on this issue.

8 December 2023 – STEP responds to the Financial Action Task Force’s (FATF) consultation on a Risk-Based Approach on Beneficial Ownership and Transparency of Legal Arrangements

STEP has responded to the Financial Action Task Force’s (FATF) consultation on Recommendation 25, which details a risk-based approach on beneficial ownership and transparency of legal arrangements. STEP argues that trusts are ubiquitous and diverse in nature, and often used for vulnerable clients, therefore arguing that FATF should require disclosure of information of trustees that financially benefit from a trust rather than those who are objects of a power. STEP also believes that an approach that gives law enforcement agencies sufficient tools to access accurate information on trust ownership is the best approach to tackling potential economic crime threats.

29 September 2023 - STEP responds to His Majesty’s Treasury’s (HMT) consultation on reforms to anti-money laundering and counter-terrorism finance supervision rules

STEP has responded to His Majesty’s (HM) Treasury’s consultation on proposed reforms to supervision rules for anti-money laundering (AML) and counter-terrorism financing (CTF). Of the four models proposed in this consultation, STEP argued that the OPBAS+ model would be most suitable due to the cost effectiveness and the granting of additional powers, such as fining and assessment, which would increase the supervisory effectiveness of the current regime. STEP also argued that the establishment of a single supervisory authority risks loss of expertise, as there is no guarantee that policy experts currently working in the regime would transfer to the new model, whilst also requiring a transition period which has potential to decrease supervisory effectiveness.

25 September 2023 - STEP responds to His Majesty’s Revenue and Customs Consultation on Taxation of Employment Benefit Trusts and Employment Ownership Trusts

STEP has responded to His Majesty’s Revenue and Customs’ (HMRC) consultation on reforms to taxation of employment benefit trusts (EBTs) and employment ownership trusts (EOTs). STEP in its response agreed with the proposal’s aim of ensuring that ownership and control truly passes to the employee. STEP supports trustee boards having active oversight of the company and represent the interests of the employee population. Furthermore, the appointment of independent persons mirrors practice in larger corporations where Independent Non-Executives can add an extra layer of accountability.

15 September 2023 - STEP responds to Home Office targeted engagement on Suspended Criminal Funds Scheme

STEP has responded to a targeted engagement by the Home Office on a proposed Suspended Criminal Funds Scheme. STEP supports the principles of the scheme but warns that the evidence threshold and costs involved in reclaiming lost funds should not be so erroneous that they put off firms from joining the scheme. STEP agrees with the eligibility criteria of firms but recommends that crypto assets be added to the eligibility list of funds, as it is widely acknowledged that crypto assets can be exploited in cases of financial crime.

4 August 2023 - STEP responds to the Consumer Markets Authority’s consultation on potential consumer law breaches in will writing and other unregulated legal services

STEP responds to the Consumer Markets Authority’s (CMA) consumer enforcement investigation that seeks to protect consumers following complaints about providers offering will-writing, online divorce and pre-paid probate services. STEP acknowledges the concerns across its membership found in its Wills and Trusts: Buyers Beware report. This reports highlights issues such as rogue traders, false advertising will drafts having no terms and conditions. These factors can have hidden costs for consumers and mislead consumers into thinking they are being provided with high quality services for cheaper.

30 June 2023 - STEP responds to Bank of England consultation on the Creation of a Digital Currency

STEP has responded to the Bank of England’s consultation on the creation of a Central Bank Digital Currency. In its response, STEP warned that any digital currency should reflect the privacy if individuals to maintain a minimum level of trusts between citizens and the government. A CBDC should not discriminate against citizens using the currency based o their residency, and should therefore be open to no-UK nationals. Finally, a CBDC should accommodate scenarios where somebody as the power to act on somebody’s behalf, such as under a power of attorney, meaning the wallet should be in the name of a donor and the attorney should have access under the arrangement.

16 June 2023 - STEP responds to His Majesty’s Treasury consultation on Taxation of Environmental Lands Management and Ecosystem Service Markets

STEP has responded to His Majesty’s Treasury’s (HMT) consultation on taxation of environmental land management and ecosystem service markets. STEP argues that the loss of agricultural property relief (APR) could be a limiting factor for farmers’ appetite to change land use from agricultural to environmental. It is vital that land benefitting from inheritance tax relief genuinely delivers environmental benefits. There will be some landowners who decide not to participate in environmental land management, but wish to leave their land in a better state than they found it. Therefore, STEP argues that heirs should not be disadvantaged by landowners not receiving payments for delivering environmental benefits during their lifetime.

30 April 2023 - STEP responds to His Majesty’s call for evidence on a Future Financial Services Regulatory Regime on Crypto Assets

STEP responds to His Majesty’s Treasury’s (HMT) call for evidence on establishing a future financial services regulatory framework for crypto assets. In its response, STEP suggests that it would be inappropriate for most personal representatives, trustees and trust and estate professionals to fall within the scope of the regulatory regime as a result of activities, such as arranging a sale of crypto assets on behalf of a trust or safeguarding private keys belonging to a trust.

14 February 2023 – STEP comments on share exchanges involving non-UK close companies draft legislation

STEP has commented on an exchange of views by His Majesty’s Revenue and Customs (HMRC) on draft legislation that prevents UK resident but non-UK domiciled individuals avoiding UK capital gains tax or income tax as a result of exchanges of shares in a UK close company for shares in a non-UK close company. In its response, STEP argues that the 5% threshold is too low as an individual with that level of stake cannot realistically have any degree of control over the company’s affairs.

9 February 2023 – STEP responds to Ministry of Justice consultation on the Hague Convention of July 2019 on Recognition and Enforcement of Foreign Judgements in Civil or Commercial Matters

STEP responds to a Ministry of Justice consultation of the Hague Convention of 2 July 2019 (HCCH 41) on the recognition of foreign judgements on civil or commercial matters. STEP believes the UK should seek accession to HCCH 41 as soon as possible as it will take some time before it will have any impact in practice. HCCH 41 would enter into force for each contracting state on the first day of the month following a 12 month expiry after a state formally ratifies it. HCCH 41 would give UK parties dealing in civil and commercial disputes more confidence that judgements obtained in UK courts will be more readily enforceable in a broader range of jurisdictions than is currently the case.

6 December 2022 - International: STEP responds to FATF consultation on the revision of Recommendation 25 and its Interpretive Note

STEP has responded to the Financial Action Task Force’s (FATF) consultation on its review of Recommendation 25 and its Interpretive Note on legal arrangements' transparency and beneficial ownership. STEP in its response focused on the Interpretive Note and FATF’s planned amendment of the definition of beneficial ownership in the glossary of Recommendation 25. STEP also suggested that while taking a risk-based approach, that only beneficial ownership information that is strictly necessary for the purpose of preventing the misuse of trusts and other similar legal arrangements, should be required to be disclosed under Recommendation 25.

4 November 2022 - UK: STEP responds to Law Commission project on digital assets and personal property law

STEP has responded to the Law Commission's consultation on its project to review the existing personal property law in the UK to ensure that the law is capable of accommodating both crypto-tokens and other digital assets. STEP's response focuses principally on the key question as to whether English law should recognise a third category of personal property and, if so, what principles might be applied in determining the boundaries of such a category.

11 October 2022 - UK: STEP Europe responds to the European Commission's proposal for a Council Directive to tackle the role of enablers that facilitate tax evasion and aggressive tax planning in the European Union

STEP has responded to the European Commission's consultation on its proposal for a Council Directive to tackle the role of enablers that facilitate tax evasion and aggressive tax planning in the European Union. STEP Europe's response notes that the proposals rely on old data and the extent of the problem today cannot be assessed without more recent and up-to-date information. It also rejects the notion of an EU register of enablers since it is unlikely to deter those who operate outside the system and do not carry out the compliance and reporting required already under existing legislation.

20 September 2022 - UK: STEP responds to HMRC consultation on draft tax legislation to be included in Finance Bill 2022-23

STEP has responded to His Majesty’s Revenue and Customs (HMRC) consultation on draft tax legislation to be included in Finance Bill 2022-23. In particular, STEP focuses on the proposed change to the rules that apply to transfers of assets between spouses and civil partners who are in the process of separating.

16 August 2022 - International: STEP USA produces guidance on the Waters Amendment to the 2023 National Defense Authorization Act

STEP USA has produced a note to provide information for members on the 2023 National Defense Authorization Act (NDAA) which is currently passing through the United States (US) legislative process. This note focuses on the Waters Amendment which was incorporated into the NDAA when it passed the House of Representatives. The Waters Amendment if passed would add to US Code: Title 31 section 5312 (31 USC § 5312) extra categories of additional service providers that are required to conduct anti-money laundering (AML) due diligence. Those servicing trusts, forming entities and performing financial advice are some of the categories included.

1 August 2022: International: STEP responds to FATF's consultation on its proposed revision of Recommendation 25

STEP has responded to the Financial Action Task Force’s (FATF) consultation on its review of Recommendation 25 in relation to the transparency and beneficial ownership of legal arrangements. In its response STEP recommends that for anti-money laundering (AML) rules the laws of the jurisdictions where a trustee is resident or where the trust administration is carried out, should be applied, rather than the jurisdiction’s governing law being applied to the trust. STEP also commented that it should only be necessary for a company register to identify the directors and any natural person holding 25 per cent or more of the shares or voting rights of the company, as is required for the trust register under the UK’s Trust Registration Service (TRS). Additionally STEP has called for more specific guidance on what information is required to be obtained, verified and included in relation to beneficiaries.

28 July 2022: UK: STEP produces a guidance note on the verification process for the new Register of Overseas Entities (ROE)

STEP has produced guidance which aims to assist members with the verification process which is required for the new Register of Overseas Entities (ROE). The ROE was implemented by the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA) which becomes effective from 1 August 2022. Any overseas entities which already hold an interest in UK land which (in England), was acquired on or after 1 January 1999, are required to register at Companies House by 31 January 2023. In order to register, an overseas entity must provide certain information about the entity itself and about its beneficial owners, which must be independently verified. The verification requirements are contained in the Register of Overseas Entities (Verification and Provision of Information) Regulations 2022 SI 725/2022.

28 July 2022: International: STEP issues updated Position Paper on EU Sanctions

STEP has updated its Position Paper on EU sanctions against trusts with a ‘Russian connection’ and prohibition of book-keeping, consulting and other services to the Russian government and Russian companies. The update reflects the EU’s seventh round of sanctions.

15 July 2022: UK: STEP responds to HMRC consultation on expanding the Investment Transactions List for the Investment Management Exemption and other fund tax regimes

STEP has responded to Her Majesty’s Revenue and Customs (HMRC) consultation on its intention to expand the Investment Transactions List (ITL) used by the Investment Manager Exemption (IME) to provide tax certainty to UK investment managers seeking to include types of cryptoassets within their investors’ portfolios. STEP in its response called for HMRC to be clear whether NFTs are to be covered by their proposed definition of cryptoassets or if they will be excluded.

15 July 2022: UK: STEP responds to HMRC consultation on legislative proposals to remove trusts and death estates with small amounts of income from income tax

STEP has responded to Her Majesty’s Revenue and Customs (HMRC) consultation on legislative proposals to remove trusts and death estates with small amounts of income from income tax. STEP in its response welcomed the proposal to formalise and extend the existing concession that removes trusts and estates from income tax where the only source of income is savings interest and the tax liability is below GBP 100. STEP also supported the proposal to expand the approach to all sources of trust and estate income and to base the rules on the amount of income received, rather than on the tax due.

14 July 2022: UK: STEP responds to joint DHSC and MOJ consultation on proposed changes to the Mental Capacity Act 2005 (MCA 2005) Code of Practice

STEP has responded to the joint consultation on proposed changes to the Mental Capacity Act 2005 (MCA 2005) Code of Practice from the Department of Health and Social Care (DHSC) and the Ministry of Justice (MoJ).

12 July 2022: International: STEP USA produces guidance on US Treasury’s prohibited services for persons located in Russia

STEP USA has produced a note for trust and company service practitioners, which aims to provide guidance and information on recent economic sanctions from the US Treasury Department's Office of Foreign Assets Control (OFAC) that prohibit the provision of accounting, trust and corporate formation, and management consulting services to persons located in the Russian Federation. The sanctions were effective from 7 June 2022. As STEP members routinely render a number of the prohibited services, it is important that members are aware of the parameters of these prohibitions and take steps to ensure compliance with the sanctions. The OFAC has also confirmed that the prohibition does not distinguish between new and existing trusts and companies.

12 July 2022: UK: STEP produces a briefing note on the valuation of PPI claims for inheritance tax (IHT) purposes

STEP produced a briefing note on payment protection insurance (PPI) in 2019, which recommended that fiduciaries and those advising fiduciaries, should consider the possibility that estate administration files post 2000 could be subject to PPI claims. STEP has subsequently discussed the valuation of PPI claims for inheritance tax (IHT) purposes with HM Revenue & Customs (HMRC). HMRC has advised that the fundamental issue for IHT is whether there was a valuable right at the date of death, or merely a right to make a claim without knowing whether any compensation would be payable. Therefore STEP has produced a new guidance note to reflect these developments.

27 June 2022: UK: STEP responds to OTS call for evidence for its property income review

STEP has responded to the Office of Tax Simplification’s (OTS) call for evidence for its review to identify the aspects of property income taxation, which are particularly complex and how property income taxation can be simplified. The response expands on the points raised by STEP in its meeting with the OTS on 9 June 2022.

24 June 2022: International: STEP responds to European Commission consultation on its proposed new EU system for the avoidance of double taxation and prevention of tax abuse in the field of withholding taxes

STEP has responded to European Commission's (EC) consultation on its proposed new EU system for the avoidance of double taxation and prevention of tax abuse in the field of withholding taxes. STEP in its response stated the belief that tax relief is foregone where relief is not given at source, due to the costs and the effort required in seeking the refund. Therefore, when and where possible, the establishment of a fully-fledged common EU relief at source system would be preferred over improving withholding tax refund procedures to make them more efficient.

6 June 2022: International: STEP updates its guidance on EU sanctions against trusts with a 'Russian connection'

STEP Europe Chair Paolo Panico TEP has produced a Position Paper to provide some guidance for trust and company service practitioners on the prohibition that the European Commission has imposed in relation to European Union (EU) Member States providing certain services to trusts and similar legal arrangements with a Russian connection. Following the European Union passing its Sixth Sanction package against the Russian Federation and Belarus, an Update Paper to the Position Paper was also produced on 6 June 2022.

29 April 2022: International: STEP responds to the OECD consultation on Crypto-Asset Reporting Framework and amendments to the Common Reporting Standard

STEP has responded to the Organisation for Economic Co-operation and Development (OECD) consultation on Crypto-Asset Reporting Framework and amendments to the Common Reporting Standard. STEP in its response have called for further clarity in the framework on its scope for intermediaries such as Reporting Crypto-Asset Service Providers.

8 April 2022: UK: STEP responds to the OTS review of its approach to simplification and its aims, approach and priorities

STEP has responded to the Office of Tax Simplification’s (OTS) scoping document for its review of its approach to simplification and its aims, approach and priorities. STEP in its response have called for the OTS to review the numerous anti-avoidance provisions in the tax legislation, as such provisions cause considerable complexity. STEP in its response also notes that some anti-avoidance provisions are now out of date and have been rendered redundant by other changes, so there is a good case for repealing these.

6 April 2022: International: STEP responds to the European Commission's proposal for a council directive laying down rules to prevent the misuse of shell entities for tax purposes

STEP has responded to the European Commission's proposal for a council directive laying down rules to prevent the misuse of shell entities for tax purposes. STEP in its response focuses on the policy and macro-economic considerations relevant to the proposal, such as considerations which need to be taken into account regarding the major business changes which have occurred post-pandemic to the modern economy. The response also looks at the technical aspects of the proposal, in particular its potential impact on holding companies.

1 April 2022: UK: STEP responds to the Department of Health and Social Care's consultation on its operational guidance to implement a lifetime cap on care costs

STEP has responded to the Department of Health and Social Care's (DHSC) consultation on its operational guidance to implement a lifetime cap on care costs. STEP in its response generally supports the guidance but suggests that clear and practical examples be incorporated into the guidance to help expand and explain it.

29 March 2022: International: STEP responds to European Commission consultation on its initiative on the cross-border protection of vulnerable adults

STEP has responded to European Commission's (EC) consultation on its new initiative on the cross-border protection of vulnerable adults. STEP in its response agreed that there was a need for specific legislation to facilitate cross-border protection of vulnerable adults but as this was not necessarily confined to the geography of the EU therefore coherence is needed between EU laws and the legal jurisdictions that support the implementation of the United Nations Convention on the Rights of Persons with Disabilities (CRPD).

23 March 2022: UK: STEP responds to Financial Conduct Authority consultation on strengthening their financial promotion rules for high risk investments, including cryptoassets

STEP has responded to Financial Conduct Authority's (FCA) consultation on strengthening their financial promotion rules for high risk investments, including cryptoassets. STEP in its response generally supported the changes suggested by the FCA.

7 March 2022: UK: STEP responds to Legal Services Board consultation on proposed policy on ongoing competence

STEP has responded to the Legal Services Board’s (LSB) recent consultation on its draft statement of policy on ongoing competence which will set out the LSB’s expectations of the regulators in pursuing outcomes to assure themselves that those they regulate are competent at the point of authorisation and remain so throughout their careers, and that the public and consumers can be confident in the competence of authorised persons. STEP in its response welcomed the proposal stating that it will assist with raising standards across the workforce and increase consumer confidence.

22 February 2022: UK: STEP responds to Stamp Duty Land Tax: mixed-property purchases and Multiple Dwellings Relief consultation

STEP has submitted a response to the government’s Stamp Duty Land Tax: mixed-property purchases and Multiple Dwellings Relief consultation. This consultation sought views on options to change the Stamp Duty Land Tax rules for mixed-property purchases and Multiple Dwellings Relief. In its response STEP raised concern over the complexity of the current SDLT system. STEP finds HMRC's plan to introduce apportionment for mixed property purchases acceptable as long as it is in line with the existing principle relating to linked transactions therefore reducing the need to add further complexity.

8 February 2022: UK: STEP responds to Draft Regulations: Mandatory Disclosure Rules consultation

STEP has submitted a response to the government’s Draft Regulations: Mandatory Disclosure Rules ;consultation, which seeks views on the design of draft regulations requiring disclosure of certain arrangements to Her Majesty's Revenue and Customs (HMRC). The proposed model rules will require taxpayers and intermediaries to disclose information on these types of arrangements and structures to HMRC. STEP'S response builds on a number of areas it raised in the guidance note it produced in 2020 on the UK implementation of disclosure of cross-border tax planning arrangements under EU Directive 2018/822 (DAC 6). In its response STEP raises concerns that requiring organisations to duplicate efforts in respect of the period from 25 June 2018 and to review historic material from 29 October 2014 is disproportionate and will not result in any real benefits. STEP calls that any changes should only apply from the date any regulations implementing MDR come into effect and should have no impact on reporting for past periods.

12 January 2022: UK: STEP responds to Mental Capacity Act 2005 small payments scheme consultation

STEP has submitted a response to the government’s Mental Capacity Act 2005 small payments scheme consultation, which seeks views on a proposed scheme to support child trust funds (CTF) beneficiaries who come of age but lack the capacity to deal with the proceeds of their CTF. The government proposes a new streamlined process that would allow family members and guardians to make withdrawals and payments of up to GBP2,500 from CTFs for up to six months without needing the England and Wales Court of Protection’s permission. In its response, STEP acknowledges that the current system is slow, expensive and does not work well for small individual amounts. However, there are significant concerns about the new scheme being supervised and administered by financial services organisations that are not specialists in dealing with mental capacity or the funds of vulnerable people.

7 January 2022: UK: STEP responds to company re-domiciliation consultation

STEP has submitted a response to the government’s consultation on the introduction of a corporate re-domiciliation regime to support companies seeking to relocate to the UK. The consultation sought views on the possible advantages of enabling companies to re-domicile, the level of demand that currently exists, the merits of establishing an outward re-domiciliation regime and any tax implications associated with the introduction of such a regime. In its response, STEP identified the need for further consideration on how the regime should best ensure departing country conditions are met, as well as presenting its views on the impact of the proposals on personal taxation and whether a company will become, or cease to be, UK-resident following a re-domiciliation to or from the UK.

21 December 2021: UK- STEP, ICAEW and CIOT prepare note on treatment of loans secured on foreign income or gains by remittance basis users

STEP with ICAEW and CIOT have prepared a note on the treatment of loans secured on foreign income or gains by remittance basis users which has been sent to HMRC. The purpose of the note is to highlight a change in HMRC’s approach to the treatment of loans made to remittance basis users where assets of the borrower are held by the lender. It also aims to assist taxpayers and their professional advisers in considering the technical and practical issues in each client’s specific context. The note has been sent to HMRC for comment and will be updated to reflect any comments HMRC make.

03 December 2021: International - STEP responds to FATF’s consultation on revisions to Recommendation 24 and its Interpretive Note

STEP has submitted a response to the FATF consultation on its revisions to Recommendation 24 and its Interpretive Note. STEP agrees with FATF's aim to increase transparency and encourage rigorous safeguards, which will help combat financial crime, including tax evasion. However, STEP stresses that transparency should have appropriate and legitimate boundaries. In its response STEP has identified potential issues relating to examples provided by FATF for a sufficient link to exist with another country, such as owning a bank account, and has called that FATF explore whether CRS information could be made available for this purpose instead which would avoid the burden of dual reporting. STEP has also reiterated that bearer shares should only be permitted in the most exceptional of cases where there is a controlled environment and the paper also raises concerns over FATF’s understanding and definition in the glossary of “Nominee Directors”. STEP's response follows the white paper consultation on the review of Recommendation 24 held on 20 August 2021 which STEP also responded to.

18 October 2021: UK - STEP launches guidance note on HMRC’s "Reliance Statement"

The Institute of Fiscal Studies (IFS) Tax Law Review Committee (TLRC) responded to HMRC’s call for evidence seeking views on how the tax administration framework could be updated and simplified. In its response it highlighted that HMRC’s ‘reliance statement’ has not been substantially updated since 4 March 2009 and that a taxpayer or professional agent cannot always rely on HMRC’s published guidance. STEP has written a letter to HMRC reinforcing this issue and has produced guidance that highlights this risk to members and recommends that they carefully consider the guidance that is being relied upon and whether there could be adverse consequences if that guidance was found to be inaccurate. Members should also be reminded that HMRC’s guidance does not carry the force of law.

13 October 2021: UK - STEP responds to Ministry of Justice's consultation on modernising Lasting Powers of Attorney

STEP has submitted a response to the Ministry of Justice's (MOJ’s) consultation on modernising Lasting Powers of Attorney. In its response, STEP highlights the unfortunate and unacceptable delays in processing registration applications for both types of LPAs at the Office of Public Guardian (OPG). STEP in its response suggests that resources are improved/increased immediately to counter these registration issues and a “fast-track” procedure and channel should be established forthwith to deal with urgent matters. The Law Society also submitted a response to this consultation.

23 September 2021: UK - STEP responds to Ministry of Justice's consultation on aligning the fees for grants of probate to cost recovery

STEP has submitted a response to the Ministry of Justice's (MOJ’s) consultation on its proposal to align the fees for professional and non-professional applicants of probate into a single fee of GBP273. In its response, STEP reinforces that the distinction between professional and non-professional application fees should remain since the complexity of preparing a probate application should not be underestimated nor should the expertise and value that professionals bring to the process. STEP notes that the fee increase is modest but it is being proposed at a time when the probate service has faced significant criticism and challenges, which have impacted its efficiency, and suggests that that these inadequacies are addressed before a fee increase is introduced.

21 September 2021: Global - STEP publishes report on Digital Assets

STEP and the Microsoft-funded Cloud Legal Project at Queen Mary University of London have recently published a report on the results of joint research on practitioner experiences with digital assets. Key findings included that digital assets have become a common part of estate planning and administration; that clients frequently experience difficulties accessing digital assets on death or incapacity of a family member; that law reform is needed to enable effective estate planning; and importantly that there is a need for greater education for practitioners on best practices for dealing with digital assets. The report recommends a threefold approach based on education, collaboration and legislation to address the challenges

03 September 2021: UK - STEP launches guidance note on location of cryptocurrencies

HMRC’s crypto-assets manual has stated its view that exchange tokens (i.e. cryptocurrency) are located where the beneficial owner is resident. For this purpose, HMRC considers an individual to be UK-resident if they are tax-resident under the statutory residence test. Members should be aware that there are alternative views. To help highlight this area and these alternative views, STEP’s Technical Committee has produced a guidance note, which has also been shared with HMRC.

25 August 2021: International - STEP responds to European Commission's consultation on fighting the use of shell entities and arrangements for tax purposes

STEP has submitted a response to the European Commission's (EC’s) consultation on fighting the use of shell entities and arrangements for tax purposes. In its response, STEP has noted that any new requirements to tackle the use of shell entities for tax avoidance purposes (and the associated cost) would have a minimal positive impact given the significant number of measures already introduced over recent years. STEP argues that the concept of a shell entity ought to be clarified and further co-ordinated efforts, if any, be limited to providing soft guidance as to what would be sufficient substance, and requiring consideration of the specific facts in each case. STEP also has produced a paper covering its position in more detail.

25 August 2021: International - STEP responds to European Commission's consultation on the recognition of parenthood between member states

STEP has submitted a response to the European Commission's consultation on the recognition of parenthood between member states. STEP in its response states that cross border recognition of birth/ adoption/ surrogacy is a difficult but important topic, and that also the cross border recognition of and effects of declarations of presumption of death should also be included in the initiative. As whilst not politically sensitive to the families involved failure to agree on the effects of declarations of death cross border adds extra trauma to situations that are almost always traumatic and stressful. STEP calls for action by the EU which would be simple yet highly effective.

20 August 2021: International - STEP responds to FATF’s consultation on the review of recommendation 24

STEP has submitted a response to the FATF consultation on its review of recommendation 24. STEP agrees with FATF's aim to increase transparency and encourage rigorous safeguards, which will help combat financial crime, including tax evasion. However, STEP stresses that transparency should have appropriate and legitimate boundaries. As information released into the public sphere can expose beneficiaries of trusts to substantial risks such as being targeted by criminals. STEP also advocates that rigorous safeguards and robust mechanisms must be in place, mainly when trust information is accessible to anyone other than the competent authority. STEP's response follows its initial position paper on this review which was released in June.

16 August 2021: UK - HMCTS announces new guidance on probate applications not submitted by 19 August

Her Majesty’s Court and Tribunal Service (HMCTS) has provided an update on the online probate service upgrade planned for 19 August. Any incomplete applications on the system that have not been deleted or submitted by 19:00 GMT will be moved to a new state called 'end state stopped,' which practitioners will be able to see on their dashboard but will not be able to progress. Applicants unable to complete their submission before 19 August should wait for the change to go live before starting the application, says HMCTS.

30 July 2021: UK - STEP responds to the Law Commission's consultation on its 14th Programme of law reform

STEP has submitted a response to the Law Commission consultation on its 14th Programme of law reform. In its response STEP stated that it hopes that the Law Commission’s project on examining English trust law (which has not been comprehensively reviewed since 1925) and its project to review the Wills Act 1837 will both be prioritised, with a particular focus on arbitration of trust law. Additionally STEP has submitted a paper which calls for reform on the process of recording Nil Rate Band Trusts.

29 July 2021: UK - STEP responds to the Law Commission's call for evidence on digital assets

The STEP Digital Assets SIG has submitted a response to the Law Commission call for evidence on digital assets as part of the scoping study into digital assets and whether digital assets should be “possessable”. In its response STEP welcomes the Law Commission’s interest in this area, however STEP stressed the belief that there is a serious need for a more wide-ranging examination of how the English and Welsh legal system is accommodating the astonishing growth in digital assets in recent years. In particular on the succession and location issues with these new type of assets.

20 July 2021: UK - Government releases draft legislation for Finance Bill 2021-22

The UK Government has released information on a number of tax proposals for technical consultation which will be covered in the upcoming Finance Bill 2021-22. One of the main new measures will introduce new proposals designed to clamp down on promotors of tax avoidance arrangements. The proposed legislative change is designed to clamp down on the supply of tax avoidance arrangements and will include new powers for HMRC to seek freezing orders that would prevent promoters from dissipating or hiding their assets before paying the penalties they owe and will enable HMRC to present winding-up petitions to the Court for companies operating against the public interest. Additionally the Government will introduce new rules that will enable HMRC to make a UK entity, who facilitates the promotion of tax avoidance by offshore promoters, subject to a significant additional penalty. Coinciding with this new legislation release the Government has released its response to the consultation Clamping down on promoters of tax avoidance which STEP responded to in June.

20 July 2021: UK - OPG launches a consultation on modernising Lasting Powers of Attorney

The Office of Public Guardian (OPG) has announced it is launching a consultation which will run until 13 October and will examine the entire process of creating and registering an lasting powers of attorney (LPA) with a view to boosting its powers to prevent fraud and abuse while introducing a mainly digital service. It will look at how technology can be used to reform the process of witnessing, improve access and speed up the service, and will propose widening the OPG’s legal powers to check identities and stop or delay any registrations that raise concern. It will also look at making the process for objecting to the registration of an LPA simpler to help stop potentially abusive LPAs. Based on the feedback of the consultation any substantial changes will require amendments to the Mental Capacity Act 2005.

19 July 2021: UK - HMCTS announces new improvements to the online probate service

Her Majesty’s Court and Tribunal Service (HMCTS) has announced that a number of improvements will be made on 19 August to the online probate service. The key change which will be unveiled will be that Trust Corporations will be able to apply for a Grant of Probate using MyHMCTS. In order to prepare for these changes, HMCTS are encouraging users to check their MyHMCTS dashboard and either submit applications or read the guidance on deleting unsubmitted applications for those that are no longer valid. As any applications that are not submitted, or cannot be submitted, before the change on 19 August will not be able to progress and a new application will need to be created. If applicants are unable to fully submit their application to HMCTS before 19 August, they should wait for the change to go live before starting the probate application on MyHMCTS.

05 July 2021: UK - STEP responds to the House of Commons women and equalities committee call for evidence on the Rights of Cohabiting Partners

STEP has submitted a response to the House of Commons women and equalities committee call for evidence on the Rights of Cohabiting Partners. The call for evidence feeds into the committee's enquiry in this area where they are investigating the equalities issues around cohabitation, how cohabitation rights could be strengthened and what legal protection for cohabitants could look like and how this might be introduced. STEP in its response calls for a legal definition of cohabitation which is essential if any legal rights are going to be given to co-habitants.

28 June 2021: UK - HMCTS issues advice on dealing with stopped cases

HM Courts & Tribunals (HMCTS) has provided advice on how to deal with stopped cases. HMCTS has explained that at present, just over 1/3 of all current STOPs have evidence attached to them to be re-examined. HMCTS has also deployed additional resources to focus on addressing these cases working on the basis of examining the oldest application date first. It has also announced that there will be a review of the approach to STOP priorities, with some additional functionality pending, which will also be prioritising these cases based on the date the evidence was received/attached.

15 June 2021: UK - STEP responds to HMRC's discussion document on helping taxpayers get offshore tax right

STEP has submitted a response to HMRC's discussion document on helping taxpayers get offshore tax right. STEP in its response highlighted that from member's experiences non-compliance relating to offshore matters was normally due to either; deliberate conduct, a lack of awareness, or the complexity of the tax rules. To address these cause of non-compliance STEP suggests HMRC should improve education and awareness in this area as any people are unaware of their tax obligations in relation to overseas income/asset. Additionally STEP calls for simplification of the rules relating to the taxation of income and gains in respect of assets held through non-UK structures which are currently extremely complicated.

15 June 2021: UK - STEP responds to HMRC's consultation on Raising standards in the tax advice market: professional indemnity insurance and defining tax advice

STEP has submitted a response to HMRC's consultation clamping down on raising standards in the tax advice market with a focus on introducing professional indemnity insurance (PII) for tax advisors and defining tax advice. STEP in its response states that it is supportive of HMRC’s aims to raise standards in the tax advice market. STEP considers that PII is a signifier of a professional acting with integrity and the best interests of their clients. However, STEP stresses that it does not consider that by itself, standards will be raised by this measure, and that a more holistic approach is required focusing on the non-regulated sector of the market. In addition STEP is a signatory to Professional Conduct in Relation to Taxation (PCRT), and has also signed up to the joint PCRT response which has been submitted.

07 June 2021: International - STEP comments on FATF’s review of recommendation 24

STEP has met with FATF to discuss the review and the potential areas for improvement within this area. STEP has produced a paper where it states it agrees with FATF's aim to increase transparency and encourage rigorous safeguards, which will help combat financial crime, including tax evasion. However, the paper stresses that transparency should have appropriate and legitimate boundaries. Information released into the public sphere can expose beneficiaries of trusts to substantial risks such as being targeted by criminals. STEP also advocates that rigorous safeguards and robust mechanisms must be in place, mainly when trust information is accessible to anyone other than the competent authority.

03 June 2021: UK - Government responds to Treasury Select Committee’s inquiry into Tax after coronavirus

The government has in its response formally rejected several of the suggestions made by the parliamentary Treasury Committee's Tax After Coronavirus report, published in March 2021. It dismissed the Committee's suggestion that stamp duty land tax should be significantly reduced and noted that a long-term tax policy strategy (something STEP had called for in its submission) was ‘not always appropriate’ because of the risk of forestalling activity by taxpayers. STEP maintains that an overall tax strategy is vital for a coherent, competitive and fair tax system.

01 June 2021: UK - STEP responds to HMRC's consultation clamping down on promoters of tax avoidance

STEP's UK Technical Committee has submitted a response to HMRC's consultation clamping down on promoters of tax avoidance. HMRC in the consultation announced a range of new measures to further tackle promoters and enablers of tax avoidance including strengthened sanctions and additional HMRC powers taken at an earlier stage to disrupt the business model on which promoters rely.

24 May 2021: UK - OTS releases second CGT report

HM Treasury's Office of Tax Simplification (OTS) has published the second instalment of the capital gains tax (CGT) policy review it began in July 2020. The first report, published in November 2020, took a strategic approach. The follow-up review has now been published and focuses on ironing out some of the complexities and technical issues in the CGT regime. A number of its suggestions closely follow recommendations made by STEP and other interested parties during last year's consultation process. Such as reforming the 'no gains no loss' window granted to separating couples and adjusting private residence relief (PRR) on the sale of a house, extending it to cover developments in a taxpayer's garden that the taxpayer subsequently occupies.

20 May 2021: UK - HMRC to check on CRS and FATCA obligation fulfilment

HMRC has notified STEP that it will undertake a number of automatic exchange of information (AEOI) compliance checks again this year to help ensure that any Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA) reporting obligations have been fulfilled. HMRC will be writing to trustees over the coming months to request further information for trusts that have submitted AEOI returns and for trusts that are registered for FATCA global intermediary identification numbers but have not submitted AEOI returns. HMRC intends to send the first batch of letters in June 2021 after the filing deadline. STEP’s Policy Team can be contacted with any queries.

20 May 2021: UK - HMCTS issues probate service contact advice

Following concerns from STEP members, HM Courts and Tribunals Service (HMCTS) has acknowledged that while it is endeavouring to improve its service and reduce the waiting times for contact, practitioners are experiencing difficulties in getting through to the probate service. The issue has arisen particularly in cases where practitioners are trying to speak with someone who is legally trained and who appreciates the legal points connected to the application process, especially when relating to why a practitioner’s application have been stopped. In response to numerous reports of such issues, HMCTS has issued advice on how to best contact the probate service.

31 March 2021: UK - STEP responds to the Law Commission's call for evidence on smart contracts

The STEP Digital Assets SIG has submitted a response to the Law Commission call for evidence on smart contracts as part of the scoping study into smart contracts. In its response STEP states that it believes that the Law Commission should take this opportunity to consider how smart contracts fit in to the law concerning death, incapacity and trusts.

18 March 2021: UK - STEP updates guidance note on the effect of the GDPR on trusts and estates

The EU General Data Protection Regulation (EU GDPR) has been in force since 25 May 2018. Following the end of the Brexit transition period it has been partially supplanted in the UK by the UK General Data Protection Regulation (UK GDPR), which has been in force since 1 January 2021. Practitioners, trustees and personal representatives should be aware that they could be subject to one or both of these regimes. STEP’s updated guidance note takes account of these legislative changes and summarises STEP’s understanding of how certain aspects of the UK GDPR should be applied in the context of private, non-charitable, trusts and estates. Whilst the guidance focuses on the UK GDPR, the similarities between the UK and EU regimes mean that it may also be of use when interpreting the EU GDPR. More STEP guidance and briefing notes on GDPR can be found here.

17 March 2021: UK - STEP member survey shows majority for APPG proposal to reform IHT to pay for the cost of COVID-19

The 2020 report by the All-Party Parliamentary Group for Inheritance & Intergenerational Fairness called for the introduction of a ‘flat-rate gift tax’ to sweep aside the current IHT system’s byzantine array of reliefs and exemptions. The proposals would tax all lifetime and death transfers of wealth, with very few reliefs and a low flat rate of 10 per cent (the current rate is 40 per cent). Rates would reach a maximum of 20 per cent on estates of over GBP2m. A recent STEP survey found that 65 per cent of inheritance advisors agree with the APPG recommendation of a 10 per cent flat rate as the best way to simplify the IHT system and discourage avoidance by wealthier families.

24 February 2021: UK - STEP produces briefing note on gift with reservation and spouse exemption in Inheritance Tax

STEP, together with other professional bodies, has been discussing with HMRC the availability of the inheritance tax spouse exemption in relation to assets held in a trust which are treated as beneficially owned by the settlor as a result of the reservation of benefit rules. HMRC have indicated their agreement to the analysis set out in this note and propose to amend the IHT manual (IHTM14303) to reflect this.

12 February 2021: Canada- STEP Canada produces submission on repealing the Ontario Estate Administration Tax

STEP Canada sent a submission to the Ontario Minister of Finance on repealing the Ontario Estate Administration Tax (EAT).

12 February 2021: UK - STEP produces briefing note on ACC, JGJ and HPP [2020] EWCOP 9

STEP along with the Law Society, Solicitors for the Elderly, the Court of Protection Practitioners Association, and the Professional Deputies Forum have produced a briefing note which outlines when professional deputies should seek authority from the England and Wales Court of Protection (CoP) before acting in P’s interest.

03 February 2021: UK - STEP responds to Companies House consultations

STEP has commented on three consultations which have proposed wide ranging reforms to the powers and role of Companies House. Under the new proposals, directors cannot be appointed until their identity has been verified and the register’s powers will be expanded so that it can query, investigate and remove false or inaccurate information.

28 January 2021: STEP Report - Social and Economic Benefits of Trusts

STEP has published a report on the Social and Economic Benefits of Trusts, which draws together existing evidence and research about the ways in which trusts can be, and are, used for wider societal benefit, and how they impact every facet of society. The aim is to improve understanding and address common misconceptions, presenting the positive evidence base and shining a light on how and why trusts are used.

25 January 2021: UK - STEP survey on recommendations contained within APPG for Inheritance & Intergenerational Fairness report on reform of inheritance tax

In January 2020, the All-Party Parliamentary Group (APPG) for Inheritance & Intergenerational Fairness published a report,Reform of Inheritance Tax, with two major recommendations for the government to reform the UK’s current inheritance tax (IHT) regime. The report calls for the introduction of a flat-rate gift tax, which would replace the current IHT system’s array of reliefs and exemptions. The APPG has published some FAQs on the recommendations contained within the Reform of Inheritance Tax report of January 2020.

With the government currently focusing on ways to remedy the financial deficit that has been caused by COVID-19, and IHT reform under the spotlight.

11 January 2021: UK - Dormant assets scheme to be expanded

Following a 2020 consultation, the government has announced a significant expansion of the dormant assets scheme under which GBP800 million of unused assets from the insurance, pensions, investment, wealth management and securities sectors will be made available for community use. STEP’s consultation response in July 2020 urged that the legislation should give trustees, directors and agents explicit statutory protection from the risk of personal liability if their participation in the scheme gives rise to a loss.

07 January 2021: UK withdraws from most of DAC6's disclosure provisions

The UK government will cancel almost all of its planned implementation of the EU’s Council Directive (EU) 2018/822 (DAC6), regarding mandatory disclosure of cross-border tax planning schemes. Following the conclusion of negotiations between the UK and the EU on a Free Trade Agreement (FTA), HMRC has confirmed to STEP that only arrangements which meet the hallmarks under Category D of DAC6 need to be reported in the UK, in accordance with the OECD’s Mandatory Disclosure Rules (MDR). Therefore historic reporting (for arrangements up to 31 December 2020) in respect of the other hallmarks will no longer be required. More information can be found in the following blog produced by STEP.

05 January 2021: UK - STEP launches guidance note on the end of the Brexit transition period: Areas for members to be aware of and prepared for after 1 January 2020

With the United Kingdom’s departure from the European Union (EU) and the end of the transition period on the 31 December 2020. STEP has produced guidance which highlights the specific areas that STEP believes will most affect members. It also raises awareness of these issues and links to the relevant guidance documents to assist members.

17 December 2020: UK - CMA urges review of reserved services list in England and Wales

A Competition and Markets Authority (CMA) assessment of changes within legal services sector in England and Wales has found that many more legal firms are now providing information on price, service, redress and regulatory status than in 2016. However, it notes that there appears to have been only a limited impact on the intensity of competition between providers and sector outcomes since the CMA's 2016 study found the market was not working well for consumers. It calls for a review of the list of reserved legal activities, and a mandatory public register of unregulated providers, who will be required to provide redress. STEP's comments can be found here.

10 December 2020: UK - STEP produces note on disclosable arrangements regulations and IEIM (DAC 6)

STEP’s UK Technical Committee has produced a paper commenting on the relevant issues surrounding the implementation of DAC6 as a result of statutory instrument 25/2020, the International Tax Enforcement (Disclosable Arrangements) Regulations 2020 and HMRC’s International Exchange of Information Manua (IEIM), in the context of trusts and trust structures.

09 December 2020: UK - Report assesses wealth tax to rebuild public finances, post-pandemic

A panel of accountants, economists and lawyers, including Emma Chamberlain TEP of STEP’s UK Technical Committee, set up to examine proposals for a UK net wealth tax released its preliminary analysis paper and evidence papers in November. The Wealth Tax Commission's final report was published in December, and assessed the feasibility of using a wealth tax to rebuild public finances after the unprecedented public spending required to tackle COVID-19.

04 December 2020: UK - Professional bodies issue new trust protections note

A note jointly issued by STEP, the Chartered Institute of Taxation and the Institute of Chartered Accountants in England and Wales highlights practical issues and uncertainties in the statutory provisions for trust protections as introduced by the deemed-domicile provisions in Finance (No 2) Act 2017. The changes took effect from 6 April 2017 but left significant uncertainties in the statutory provisions for trust protections, mixed-fund cleansing, rebasing, foreign capital losses and the extension of IHT to overseas property representing UK residential property interests.

12 November 2020: UK - STEP replies to OTS CGT Review

STEP has submitted a response to both parts of the Office of Tax Simplification (OTS) review on Capital gains tax (CGT). The OTS has also released its report based on findings from the first part of the review which suggests that the government should consider CGT rates more closely with income tax rates, or address the boundary issues between the two taxes to discourage taxpayers from disguising income as capital gains.

12 November 2020: UK - HMRC proposes compulsory indemnity insurance for tax advisors

HMRC’s consultation on raising standards in the tax advice market has concluded with plans to make professional indemnity insurance compulsory for tax advisors. A further consultation will be held on the proposal, which derives partly from the loan charge affair in which many of the affected taxpayers had acted on advice from their tax advisors and now find themselves with no effective remedy for the consequences. The government will separately announced details of further action against tax avoidance scheme promoters. STEP's response to the consultation can be found here.

09 November 2020: UK - Further updates to HMCTS digital probate system

HM Courts and Tribunals Service (HMCTS) has announced that it has deployed an update to the digital probate system, allowing users to see the progress of each application that they have submitted via the digital probate service. Additionally, users will be able to use the MyHMCTS dashboard to see the latest action taken on their application. The exemptions page has also been updated to clarify: what must be done through the digital service; what the digital service can be used for and what can only be done using the paper form. Further improvements are also currently underway and will be announced in due course.

02 November 2020: UK - Updated guidance on DAC6 reporting of cross-border arrangements

HMRC has updated its guidance on the disclosure of cross-border tax planning arrangements under Council Directive (EU) 2018/822 (DAC6), which nominally came into force on 1 July 2020, although the first reporting deadlines have been postponed as a result of COVID-19. Any person involved in cross-border arrangements, including loan agreements, payments from a resident of one country to a resident of another, or putting funds in an offshore trust, has to report it to HMRC if one of the so-called hallmarks applies.

29 October 2020: UK - HMCTS publishes guidance letter for digital probate service

HM Courts & Tribunals (HMCTS) has published a letter regarding the mandatory digital probate service for grant of probate applications (with exceptions), coming into force on 2 November. This letter explains the steps practitioners must take to ensure they are ready for this change and where to go if they require help or support. If an organisation has not yet registered, guidance on how to register and use the system can be found on the HMCTS website. HMCTS has requested that if practitioners email for assistance, they include the word ‘probate’ in the subject of the email, to ensure the request is actioned efficiently.

The new rules will come into force on 2 November 2020; however, there will be a grace period until 30 November 2020 during which paper applications will still be accepted, to provide additional time for professional users to sign up for online accounts in readiness for the future submission of grants of probate applications via MyHMCTS.

26 October 2020: UK - STEP contributes to qualifications and regulation consultation

The Professional Associations Research Network (PARN) has submitted a collective response to the Department for Business, Energy and Industrial Strategy (BEIS) call for evidence on professional qualifications and regulation. The call for evidence requested insights on the UK’s approach to the recognition of professional qualifications and the regulation of professions from individuals, businesses and organisations that interact with all aspects of regulated professions. STEP has supported PARN’s response, along with 36 other professional bodies including ACCA, ATT, CIMA and the Law Society of Scotland.

19 October 2020: UK- OTS suggests simpler system for relief claims and elections

HM Treasury's Office of Tax Simplification (OTS) has published a report recommending ways of simplifying the process under which taxpayers make claims and elections for reliefs from income tax, corporation tax, capital gains tax and VAT. Among other things, it criticises the personal and business tax account system, the process of claiming employee expenses, and the standard of HMRC's online forms. It also suggests simplifying the Gift Aid carry back provisions by allowing part of a donation to be treated as carried back and allowing amendments within the normal timescales.

08 October 2020: UK - HMRC’s new AML regulations now in effect

The Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2020 (991) legislation came into effect on 6 October 2020. HMRC is hoping the new system will be in place as soon as possible in 2021, to allow trustees to register trusts that are caught by the new rules and to make updates to trusts that are already registrable. This will therefore be the key date for matters such as whether a business relationship has been entered into or whether UK land has been acquired. Business relationships entered into and UK land acquired prior to 6 October should not trigger a need to register. HMRC hopes to release more information on the scope of the regulations later this autumn, and STEP continues to talk to the team about outstanding issues.

30 September 2020: UK - STEP and other professional bodies urge caution on compulsory use of online probate system

The Ministry of Justice's (MoJ’s) Consultation on plans to compel professionals in England and Wales to submit their non-contentious probate applications through the new online service developed by HM Courts and Tribunal Service (HMCTS) has closed. STEP in its response welcomed mandatory use in the case of standard, day-to-day and non-complex probate applications, for which the online system can work well. However, STEP’s particular concern is that the existing system is 'simply unequipped' to deal with a regime in which the more complex applications and those which require more niche types of grant must all be submitted online. STEP has suggested that the simpler approach would be to make online applications the default position for simple applications and that HMCTS should continue with the traditional paper method for the more complex grants. The benefits associated with moving online for simpler estates will not be possible for more complex applications until the online system is comprehensively updated to facilitate them. The MOJ response to the consultation can be found here and information on how to use the online system can be found here.

24 September 2020: UK - HMCTS releases further online probate guidance

HMCTS has released the latest FAQ and cover sheet required for using the digital probate service, reiterating that the cover sheet must always be used with an applicant’s case number included. It has also reminded that for the online submission, the legal statement should always be signed by the executor(s), and practitioners cannot yet sign on their behalf.

01 September 2020: UK - STEP publishes response to Treasury Select Committee’s call for evidence for its inquiry into Tax after coronavirus

STEP has submitted a response to the Treasury Select Committee’s call for evidence for its inquiry into Tax after coronavirus. STEP called that a strategic view should be taken in the form of a roadmap that links everything together, reducing complexity and any uncertainty in relation to the system.

27 July 2020: UK - STEP publishes guidance after remotely witnessed wills officially declared valid in England and Wales

The law of wills in England and Wales is to be amended to allow the remote electronic witnessing of wills under certain conditions. The change is to be backdated to 31 January 2020, in order to reassure the public regarding any wills that may have been remotely attested during the coronavirus epidemic. Guidance for STEP members has already been issued. It reinforces the Ministry's advice that remote witnessing should only be used in an emergency when conventional witnessing is impossible, and extreme caution is required when using it. More information can be found in the STEP Blog.

16 July 2020: UK - government publishes consultation response on 5AMLD and trust registration rules

The UK government has published the outcome of its technical consultation on implementation of the EU Fifth Anti-Money Laundering Directive (5AMLD) and its impact on trust registration. Several useful concessions have been made, in line with recommendations made by STEP, who have been consulting with Treasury regularly on the transposition of 5AMLD. In particular, offshore trustees entering into a business relationship in the UK will not have to register the trust on HMRC’s Trust Registration Service (TRS) unless there is at least one UK-resident trustee. The original regulations required registration of offshore trusts even if there were no UK trustee, which could have deterred trustees of offshore trusts outside the European Economic Area from seeking professional advice in the UK. More information can be found in the STEP Blog.

25 June 2020: UK - STEP publishes response to Legal Services Board Call for Evidence: Ongoing Competence

STEP has submitted a response to the LSB call for evidence on Ongoing Competence. STEP stated that a competence framework should encompass the core competence requirements to undertake a particular task. In its response STEP focused on defining Competence and competence assurance.

10 June 2020: UK -STEP publishes response to Bank of England discussion paper on Central Bank Digital Currency

STEP through the Digital Assets SIG has submitted a response to the BOE discussion paper on Central Bank Digital Currency (CBDC). STEPs response raises concerns over privacy and highlight provisions for death and incapacity. STEP also stated that it would like to see more debate and focus concerning how Payment Interface Provider (PiPs) as covered in the paper are appointed and will operate.

21 February 2020: UK - STEP publishes response to technical consultation on 5AMLD

STEP has submitted a response to HMRC’s technical consultation in relation to how the UK will implement the Fifth Anti Money Laundering Directive and the Trust Registration Service. 5AMLD expands upon the requirements of 5AMLD and requires all express trusts, not just those with a tax liability, to register. The Directive came into force in the UK on 10 January 2020 but the trust register requirements will not become effective until 10 March 2020.

23 December 2019: UK - STEP publishes response to independent review of legal services regulation consultation

STEP has submitted a response to the independent review of legal services in England and Wales. STEP’s response notes that ensuring all providers are appropriately qualified is essential to protect the public along with extending the current access to full redress mechanisms to include all providers of legal services. STEP welcomes any attempts to simplify the landscape for the benefit of the consumer whilst providing a further layer of protection and assurance.

5 August 2019: UK - STEP publishes response to consultation on Companies House

STEP has submitted a response to a consultation about how Companies House registers information relating to businesses in the UK. STEP's submission supported the idea of Companies House verifying the information held on its register as well as calling for more specific work to be carried out on how this can be done effectively and proportionately when trusts are involved.

10 June 2019: UK - STEP responds to 5AMLD consultation

A STEP working group has produced a response to the UK government's consultation on the implementation of the EU's Fifth Anti-Money Laundering Directive in the jurisdiction. STEP’s response recognises the need to implement the legislation, but calls for it to be a done in a way which is both necessary and proportionate to the objective of the Directive.

14 May 2019: UK - STEP contributes to OPG guidance for financial institutions

The Office of the Public Guardian (OPG) has issued guidance advising the staff of financial services and utility companies on how to deal with customers whose decisions are taken for them under a power of attorney or deputy court order. The guide, written in partnership with various regulators, notes that companies' attitudes to these legal instruments are often both confusing and inconsistent. It aims to help regulated firms such as banks to provide a 'smoother, more uniform and straightforward' customer experience, while ensuring that safeguards against exploitation are maintained. STEP was invited by the OPG to join the focus group, and helped draft the guidance.

7 March 2019: UK - STEP committees respond to HMRC Trust Consultation

Two of STEP’s committees; the UK Technical Committee and the UK Practice Committee have produced a response to the Government’s The Taxation of Trusts: A Review consultation, which was published in 2018 and explored the principles underpinning the taxation of trusts in the UK.

23 November 2018: UK - STEP responds to Law Commission consultation on the electronic execution of documents

STEP's UK Practice Committee submitted a response to the process, which covered both documents where there is a statutory requirement for a signature and deeds, as well as a technical annex with further information.

19 October 2018: UK - Professional Body Q&As on Cleansing published

Following the significant changes to provisions on the cleansing of mixed funds made by the Finance (No. 2) Act 2017 STEP, along with CIOT, ICAEW and the Law Society, prepared a question and draft answer document to highlight areas of uncertainty in the legislation. The Q&A paper together with supporting documents, focusing on different areas of the legislation, was shared with HMRC and has now been published with their comments. The Q&A can be found here and links to Q&As on other Finance (No. 2) Act 2017 provisions can be found here.

2 October 2018: International - FATF draft Risk Based Approach Guidance to be discussed

FATF's Policy Development Group will discuss draft guidance relating to the organisation's Risk Based Approach for lawyers accountants and Trust and Company Service Providers (TCSPs) this month. STEP played a major role in the preparation of the TCSP guidance, which is expected to be published next year alongside the other guidance documents.

22 August 2018: UK - STEP scrutinises impact of the General Data Protection Regulation

Following the implementation of the EU's General Data Protection Regulation (GDPR) STEP formed a Data Protection Impact Group to review the GDPR’s effect on the trust and estate industry, collate the practical issues and submit them to the Information Commissioner’s Office (ICO). It is hoped the ICO will then be able to address any gaps in guidance or legislation. If you have any examples of how the GDPR is impacting your work please let us know via: standards@step.org.

4 July 2018: UK -DWP responds to STEP enquiry about statutory notices

STEP contacted the UK Department of Work and Pensions in March 2018, following queries from members, to ask whether the DWP is bound by statutory notices when it comes to making claims on an estate. The DWP has confirmed that it does not have any authority to dismiss the protection afforded to executors and trustees by the Trustee Act 1925, section 27. More information on the response can be found here.

29 June 2018: International - STEP publishes advice for members on how to respond to the OECD's Mandatory Disclosure Rules (MDRs)

Following the OECD's publication of their Model Mandatory Disclosure Rules (MDRs) to tackle CRS avoidance STEP made a number of resources available to help any members or branches wishing to respond to the implementation of the rules in their own jurisdictions. The information included STEP's original response to the consultation process, guidance on how to engage with policymakers and a media toolkit to assist members in communicating their messages more widely. The information can be found here and any members requiring further advice or help with engaging with policymakers are advised to email the Policy Team directly via policy@step.org.

12 June 2018: UK - HMRC provides updates on the future of the UK Trust Registration Service

STEP representatives attended a meeting with HM Revenue & Customs (HMRC) and HM Treasury (HMT) to discuss the current operation of the Trust Registration Service and its future following the EU's Fifth Anti-Money Laundering Directive. STEP's Technical Counsel has prepared a summary of the main points of the meeting which can be read in full here.

8 June 2018: UK - STEP submits evidence on tax avoidance involving profit fragmentation

The STEP UK Technical Committee produced a response (PDF 360KB) to a HM Revenue & Customs (HMRC) consultation, which is intended to inform proposals for the 2018-19 Finance Bill.

6 June 2018: UK - STEP responds to HMRC consultation on Capital Gains Tax

STEP's UK Technical Committee has provided a response (PDF 302KB) to a HM Revenue & Customs (HMRC) consultation regarding the introduction of a requirement to pay any capital gains tax due on the disposal of residential property within 30 days of the completion of the disposal.

1 June 2018: International - STEP Journal article - MDR: the story so far

In this article Simon Hodges, Director of Policy at STEP provides an overview of the debate surrounding the OECD’s incoming Mandatory Disclosure Rules.

31 May 2018: UK - STEP provides evidence to the UK's Treasury Sub-Committee

As part of its inquiry into tax avoidance and evasion the UK Parliament's Treasury Sub-Committee invited interested parties to provide written evidence. STEP's UK Technical Committee made a submission to the process. The full text of STEP's response can be found here.

14 May 2018: UK - STEP responds to HMRC consultation

STEP's UK Technical Committee has produced a response (PDF 326KB) the HM Revenue and Custom's consultation on the extension of offshore time limits for assessing tax in cases which involve offshore income, gains or chargeable transfers. The proposals were put forward by HMRC in anticipation of the UK's 2018-19 Finance Bill.

8 May 2018: UK - STEP responds to UK Treasury Committee inquiry on Economic Crime

STEP has submitted written evidence (PDF 310KB) to the UK Parliament's Treasury Committee as part of its Economic Crime inquiry. The response addresses the scale of money laundering in the UK, the effectiveness of the government's response to the issue and the role of professional bodies in the anti-money laundering regime.

30 April 2018: Bahamas - STEP Bahamas updates FATF Forum

The Financial Action Task Force's (FATF) Private Sector Consultative Forum included a number of sessions on Anti-Money Laundering and Counter Terrorist Financing. As part of one session the Chair of STEP Bahamas, Cecil Ferguson TEP was invited to report on the progress of the National Risk Assessment (NRA) in the jurisdiction. Cecil reported that following a collaborative process the Bahamas’ NRA had been adopted in December 2017 and was in the process of being implemented. More details about the NRA and the process behind it can be found here.

22 March 2018: UK - HMRC responds to STEP query on the application of SDRT in relation to the TRS

HMRC has responded to STEP member Robin Vos TEP, Chair of the UK Technical Committee, regarding the application of stamp duty reserve tax (SDRT) in relation to the Trusts Registration Service (TRS), and examining the liability of the trustee. Read the HMRC response (PDF 315KB)

19 March 2018: International - STEP responds to OECD consultation

STEP's Public Policy Committee has sent a response (PDF 210KB) to the OECD's consultation process on preventing abuse of residence by investment schemes to circumvent the CRS. The response notes that the current approach would be too broad and outlines a more targeted scheme to help the OECD achieve its objectives more successfully.

9 March 2018: UK - STEP has been invited to join the Advisory Panel for the England & Wales Law Commission’s 'Making a Will' Consultation

STEP’s Technical Counsel Emily Deane TEP and member Stephen Lawson TEP have been invited to join an advisory group of academics, practitioners, members of the judiciary and others involved in this area as part of the England & Wales Law Commission’s 'Making a Will' Consultation. The purpose of this group is to discuss proposed policy, to consider any points arising out of the proposed recommendations and to provide expert advice and opinion on specific matters that may arise during the preparation of the final Report. In due course, they may also invite the advisory group to scrutinise the draft Bill that will be published with the report to implement the recommendations.

8 March 2018: International - STEP is co-chairing the focus group to re-write the FATF Risk Based Approach guidance for TCSPs

STEP’s Technical Counsel Emily Deane TEP and member John Riches TEP have been invited by the Financial Action Task Force (FATF) to join a working group to produce a risk based approach (RBA) guidance for professional intermediaries (lawyers, accountants and trusts and company service providers (TCSPs). STEP has been invited to co-chair the TCSP group and the guidance will be developed following the principle of public-private partnership. FATF have arranged representation from both the official and the private sectors, including professional associations and the composition of the groups will be approved by the FATF in its next Plenary in February 2018. STEP representatives will be attending the FATF Private Sector Consultative Forum in Vienna, Austria in April to discuss the draft guidance.

7 March 2018: UK - STEP has received a communication from UK HMRC outlining the penalties for late TRS registrations

STEP received a bulletin from HMRC on 5 March 2018 explaining the penalties that will be incurred for trusts that have not been registered by the 5 March deadline. HMRC extended the original 31 January deadline to 5 March due to teething problems with the registration service but it has been unknown what penalties trustees or agents would face if they failed to meet the deadline. HMRC has confirmed that it will take a 'pragmatic and risk based approach to charging penalties' for trust registrations made after this time, particularly in cases where it is clear that trustees or their agents have made reasonable efforts to meet their obligations under the regulations. Please see The STEP Blog for details of the penalties.