HMRC’s five traps to avoid with CRS/FATCA reporting

Emily Deane TEPHMRC has identified the most common errors made by financial institutions (FIs) when filing their Automatic Exchange of Information (AEOI) returns, which include Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA) reportable information.

1. The FI misunderstands what constitutes an undocumented account

FIs are wrongly reporting accounts as ‘undocumented’ on the basis that a self-certification requested from an account holder has not been completed.

Accounts should only be reported as undocumented where they meet specific criteria, which include that the account has either a hold-mail instruction or a ‘care-of’ address. The full criteria can be found in CRS, Section III: Due Diligence for Preexisting Individual Accounts, subparagraphs B(5) and C(5). HMRC guidance is available at IEIM402850 and IEIM403040.

Any accounts that are correctly reported as ‘undocumented’ must show Great Britain as the residential country code.

2. The FI misunderstands what information is required to be reported 

Some FIs only complete the mandatory fields in the schema or portal, even though they hold additional information which is legally required to be reported. In addition, some FIs fill in mandatory fields with ‘n/a’ or similar.

CRS and the UK-US FATCA Intergovernmental Agreement (IGA) state which information is required to be reported. Where a schema or portal field is not mandatory, there can still be a legal requirement to provide this information. For example, where a Taxpayer Identification Number (TIN) or date of birth is held or obtained by the FI, it is required to be reported even though it is not down as a mandatory field within the portal or schema. Where an address is held, the full address must be provided, even though the only mandatory field is for ‘city’ in the schema or portal.

3. The FI reports accounts held by persons who are not reportable persons

FIs are reporting publicly traded corporations, as well as related entities, governmental entities, international organisations, central banks, and financial institutions. In most cases, such accounts are not reportable. HMRC guidance at IEIM402010 outlines which accounts are not reportable.

4. The FI misreports joint accounts and/or partnership account

Some FIs confuse the treatment of joint individual accounts and partnership accounts.

Joint individual accounts must be reported as individual accounts with the entire balance or value of the account, as well as the entire amounts paid or credited, attributed to each holder of the account.

A partnership is defined as an entity for reporting purposes, and accounts held by partnerships should be reported as entity accounts, with the respective due diligence and reporting requirements applied.

5. The FI reports entities as controlling persons 

Some FIs report entities as the controlling persons of entity accounts, resulting in trusts and companies being reported as controlling persons. However, entities cannot be controlling persons; under CRS and FATCA, ‘controlling persons’ means‘natural persons who exercise control over an entity. In the case of a trust, such term means the settlor, the trustees, the protector (if any), the beneficiaries or class of beneficiaries, and any other natural person exercising ultimate effective control over the trust, and in the case of a legal arrangement other than a trust, such term means persons in equivalent or similar positions. The term ‘Controlling Persons’ shall be interpreted in a manner consistent with the Recommendations of the Financial Action Task Force.’

Full HMRC guidance on AEOI reporting can be found at: International Exchange of Information Manual.

Please email Emily.Deane@step.org with any further queries.

Emily Deane TEP is STEP Technical Counsel

How to win a STEP Private Client Award 2019/20

John Barnett TEPEntries are open for the 2019/20 STEP Private Client Awards until 30 April. The Awards are widely acknowledged as being the premier event in the private client industry calendar. Winning an Award is a very clear and recognised hallmark of excellence.

How then, do you go about winning an Award? John Barnett TEP, Chair of the Presiding Judges, gives us his top tips based on his personal experience over the last three years on the judging panel.

Don’t be scared to enter

There can sometimes be a perception that the Awards are only for larger firms or for the usual London suspects. However, the judges have clear instructions to make allowance for smaller entrants and to take cultural differences into account for international entries. Last year’s entrants and winners were the most international yet. Entries from all sizes and types of firm are therefore welcome. Strong entries will always attract attention from the judges, from wherever they originate.

Enter the right category

It is a constant surprise to the judges how many firms enter the wrong category. One submission even began with the bold statement: ‘We are a leading [another category entirely] firm…’. Read the category criteria carefully, and if you think the judges might have difficulty understanding why you are applying for a particular category, help them by explaining your business better.

Put yourself in the mind of the judges

My number-one tip, when writing your submission, is to imagine yourself as one of the judges.

Be aware that most of the judges will not know most of the applicants. If they do, then all the better – judges are encouraged to bring their personal knowledge to the process – but for the most part, judges will be relying heavily on the submission. So even if you think you are the best-known firm in the world, make your submission count.

Each judge will, at the shortlisting stage, have to review up to 100 submissions, each of up to 1,100 words. They will then do the same again at the finalist stage. Judges have to mark each submission against five criteria and write at least 50 words about each one. That is 220,000 words of reading, 1,000 scores to give out, and at least 10,000 words to write. It is an awful lot of work: first time around, I took a week’s holiday to do the process justice. With this in mind…

Answer the questions

It is the first rule of exam-technique we should all have learned at school, but every year I am amazed at how many submissions do not answer the question. There are five criteria for each award. Each of the criteria is weighted equally and we score each out of five. So answer the questions and pick up the easy marks. Don’t waste half of your words on criteria where you have already scored 5/5 and then fail to say anything at all in response to others.

Further, make sure that you clearly answer each of the criteria in turn. If instead you give a general narrative answer, even if it addresses all the criteria, judges aren’t going to thank you for having to read it several times in order to extract and mark each one. Make the judges’ lives easier and they are likely to mark you more highly.

Don’t waste word-count

You have 1,100 words. Make them all count. So many submissions waste words. Précis rigorously. Then do so again.

A favourite example from a few years’ ago: ‘We acted for an elderly lady of great age in relation to her complex affairs. She…’ 16 words (1.5 per cent of your total) when ‘An elderly client…’ would have done just as well.

Avoid the marketing spiel!

You will be judged by fellow senior industry professionals who can spot flannel and hyperbole from a long way off.

In response to the question ‘what makes you different?’ a particular bugbear of mine is an answer that says: ‘Putting the client at the heart of everything we do is our USP and in our DNA’. If this really makes you different, why have I read something similar in 50 other submissions?

Most of the work in our industry is advisory. The ability to communicate clearly with clients is crucial to this. So demonstrate your ability to give clear advice, with a clear and well-written submission. If your marketing team is superb, then by all means use them. The judges’ experience, though, is that submissions written by those at the coal-face often read more convincingly.

Pay attention to spelling and grammar, and beware unnecessary adverbs and superlatives.

Big numbers (and names) are irrelevant

Many submissions make great play of the financial value of their clients or cases. Others seek reflected glory in acting for big names. Yet both of these have almost no effect on the judges. Tell us what makes your case unusual, complex or novel. Don’t simply name-drop celebrity connections.

Provide evidence; don’t merely assert

Most criteria ask you to ‘demonstrate’ or ‘provide evidence’. Yet many submissions assert things – ‘We are the leading firm providing a superlative level of client-service and exceptional satisfaction’ – without any evidence to back this up.

What will go down well is an evidence-based entry that gives clear examples of what the firm has done over the past year to make it stand out from the crowd.

Entries should be particularly careful about unguarded assertions. ‘We are the only firm that can…’ or ‘We are the largest firm which…’ are particularly dangerous assertions – especially where some of the judges might work for a competitor and dispute whether this is true.

Tell us something unusual

A good answer for each of the criteria might get you shortlisted. But if you want to win, you will need to stand out.

Tell the judges something different, something unusual, something genuinely innovative. Think forward to the awards ceremony and the announcement of the winner. When the celebrity-host says: ‘The judges were particularly impressed by…’, what one facet of your submission will the judges have chosen?

Be consistent

The judges are both curious and cynical in equal measure. They will check what you say in your submission against what you say on your website and other sources of information. Glaring inconsistencies tend to result in entries receiving short shrift.

Remember the Awards are ‘….of the Year’

Your firm will obviously be very good at what it does, but the Awards are intended to highlight those that have achieved particular success over the past year. Make sure you are rigorous in only referring to evidence from 1 May 2018 to 30 April 2019. General statements about historic successes will waste words and not score any marks.

….and finally, good luck!

The judges look forward to having a harder job this year, with many well-written submissions to choose from!

John Barnett CTA (Fellow) TEP is a Partner at Burges Salmon, Bristol.

England & Wales probate fees: an update

flowersThis Blog will be updated with developments on the Non-Contentious Probate Fees Order 2018 as they occur.

Background and details on the proposals, including the fee structure, can be found here.

7 February 2019:

A House of Commons Delegated Legislation Committee has voted 9 to 8 in favour of progressing the draft Non-Contentious Probate (Fees) Order 2018 to the Commons for approval.

Lucy Frazer MP, the Minister responsible for the legislation, confirmed during her speech that the changes will be introduced in April (date yet to be confirmed) and that guidance on how to pay fees will be published before the changes take effect.

The next stage is for the Order to go to the House of Commons for approval. The date for this has not yet been announced.

31 January 2019:

Probate fees due to go before House of Commons Delegated Legislation Committee on 7 February at 11.30am (more information).

Background notes

The Committee’s role is to debate the merits of the statutory instrument, instead of an extended debate in the House of Commons itself.

The proceeding will effectively be like a miniature session of the House of Commons (Lucy Frazer MP will speak as the minister responsible and then the Opposition spokesperson, followed by backbenchers). The Committee cannot block the measure from proceeding to a vote in the House of Commons, but at the end of the debate it will vote on whether the Committee has considered the Instrument. Other MPs can speak, but only those on the Committee will be able to vote at the end.

Once it has cleared this stage the instrument goes to the House of Commons for a vote soon afterwards, in this case, probably the following week.

9 January 2019:

STEP received a reply to a letter to Lucy Frazer QC MP, the Parliamentary Under-Secretary for Justice and Minister responsible for the Non-Contentious Probate Fees Order 2018, which set out our concerns with the proposed changes. The reply restated the government’s rationale for introducing the measure and refuted the assertion that it represented a tax rather than a fee covering the cost of a service. You can read the full reply here.

18 December 2018:

The Non-Contentious Probate Fees Order 2018 was debated in the House of Lords on 18 December 2018. As an affirmative measure it required a majority to pass. The House stopped short of rejecting the Order, but put on record its concerns, with the following Motion to Regret moved by Lord Beecham:

‘This House regrets that the draft Order will introduce a revised non-contentious probate fee structure considered by the Secondary Legislation Scrutiny Committee to be “so far above the actual cost of the service [it] arguably amounts to a stealth tax and, therefore, a misuse of the fee-levying power” under section 180 of the Anti-social Behaviour, Crime and Policing Act 2014; and that this Order represents a significant move away from the principle that fees for a public service should recover the cost of providing it and no more.’

The next stage for the Non-Contentious Probate Fees Order 2018 is to be scrutinised by a House of Commons Delegated Legislation Committee. No date has been set for this and it will depend on other business in front of MPs. STEP will continue to monitor the situation and provide updates where appropriate.

6 December 2018:

The Joint Committee on Statutory Instruments scrutinised the Non-Contentious Probate (Fees) Order 2018 (see the Fortieth Report of Session 2017–19 (PDF)) and drew it to parliament’s special attention:

The Committee draws the special attention of both Houses to this draft Order on the grounds that, if it is approved and made, there will be a doubt whether it is intra vires, and that it would in any event make an unexpected use of the power conferred by the enabling Act’

The other committee tasked with examining secondary legislation, the House of Lords Secondary Legislation Scrutiny Committee, in the 6th Report of Session 2017–19 (PDF) also drew parliament’s attention to the measure, calling it a ‘stealth tax’.

More detail on these developments can be found here.

Daniel Nesbitt, Policy Executive, STEP 

 

GDPR Roundtable

Emily Deane TEPSTEP’s GDPR working group recently hosted a roundtable event that enabled representatives from professional bodies, including the Law Society, ICAEW and CIOT, to update each other on their progress in relation to GDPR implementation. It is widely felt by the private client industry that when the legislation was drafted it was not designed with trust and estate practitioners in mind and there are some significant grey areas in practice.

Key issues that continue to be an industry concern discussed were:

  • How the GDPR applies to lay trustees and personal representatives.
  • How non-legal advisors process special category data.
  • How the GDPR impacts upon international transfers.
  • Queries in relation to joint data controllers and confidentiality.
  • GDPR and its impact upon engagement letters.
  • GDPR and its impact upon attorneys and deputies.
  • Erasure of files and filing system requirements.

STEP’s working group is in the process of preparing a joint paper that it will submit to the Information Commissioner’s Office (ICO) identifying the practical issues that have arisen for trust and estate practitioners. We hope that the ICO will be able to address some of the gaps in the guidance and legislation.

STEP has scheduled another roundtable in February 2019 to further discuss these issues and aims, to provide STEP members with a best practice position and guidance in due course. In the meantime, STEP has published an update to its briefing note on the GDPR, listed below.

Please note that STEP will be publishing a webinar in January 2019, recorded by the chair of STEP’s GDPR working group, Edward Hayes TEP of Burges Salmon, that will offer some interim guidance on the application of the GDPR to trust and estate practitioners.

Emily Deane TEP is STEP Technical Counsel

What’s happening in England and Wales?

Rita Bhargava TEPAs I come to the end of my term as Chair of STEP’s England and Wales Regional Committee, I wanted to reflect on some of the developments since I took on the role in January 2017.

Raising our profile

Internally at STEP, much of the emphasis over my time as Chair has been on raising STEP’s profile. From the ‘Talk to a TEP’ public-awareness campaign and accompanying website, advisingfamilies.org, which has seen 130,000 visits and 15,000 ‘Find a TEP’ searches since its launch 18 months ago, to the ‘Grow with STEP’ member recruitment campaign launched earlier this year, which has led to a 250 per cent increase in visits to the ‘Join’ section of the STEP website. It’s great that resource is being put into these important projects, which should help build greater awareness of STEP – ultimately benefiting all members.

Battling probate fees

Externally, my time as Chair has been dominated by political turmoil, the Trust Registration Service and of course, probate fees. The latter has once again reared its head in recent months, and like many of you, I am disappointed the government is again threatening to increase probate fees to extortionate levels that are wholly disproportionate to the costs involved. It has failed to take into account any of the concerns raised last year when this was first mooted. Ironically, it comes at a time when the government is introducing online application processes for probate, and removing the need to swear papers, making the cost of an application cheaper and more efficient. STEP has once again been active in highlighting concerns around the proposed measures, and we are pleased to see our arguments echoed by the House of Lords committees that review Statutory Instruments, which have both stated that the proposals amount to a ’stealth tax‘ and a ’misuse of the fee-levying power’. We hope these concerns are enough to stop the measure being approved as it is debated by parliament in the coming weeks.

Looking ahead

So what’s coming up over the next few months?

Last month, branch chairs from all over the region gathered for the England and Wales Branch Chairs’ Assembly. Over 20 branches were represented, and it was wonderful to meet so many branch chairs. It was a great opportunity to discuss how to increase engagement with members, how to support branches, and to ask branches what they expect from STEP. It was also the perfect time to hear about work being done by STEP, in particular the Member Journey project, which involves examining the experience of a member from their first contact with STEP and throughout their membership to see where improvements can be made. This is an important and far-reaching project, which will be worked on throughout 2019.

Another big project that will be launched shortly is the all-new STEP Directory. 2018 saw the last hard-copy STEP Directory and Yearbook, and in January 2019 STEP will launch the new online-only Directory. The new Directory will build on the existing online member-search facility, with upgraded functionality and new features, such as a Firm Search. Members will have access to an extensive and up-to-date network of firms and practitioners for referral and business development, and clients will be able to search for qualified professionals and firms. As the new Directory will be extensively promoted throughout 2019, you will want to make sure your contact information is current, and your profile properly showcases your expertise and experience. Log on now to update your details.

Separately, work is also underway to upgrade the STEP website to make it more user-friendly; to continue to build on the success of STEP’s Employer Partnership Programme; and to develop STEP’s qualifications so that students can tailor elements of the STEP Diploma so that it is more relevant to their specific areas of practice.

Sadly, I will be stepping down as Chair at the end of December and take this opportunity to welcome Denese Molyneux TEP as Chair from 2019 and wish her every success. I would like to thank all the staff at STEP for their hard work, dedication and continued support.

Finally, may I wish you all a merry holiday season and a peaceful New Year.

 

Rita Bhargava TEP, Chair, STEP England & Wales Regional Committee

Cross-border protection of vulnerable adults in Europe under discussion

Emily Deane TEPSTEP took part in the EC-HCCH Joint Conference on the Cross-Border Protection of Vulnerable Adults last week in Brussels, to discuss the ratification of the Hague Convention of 13 January 2000 on the International Protection of Adults (the Hague Convention) at EU and global level and the possible future EU legislative initiatives in this field.

The event, organised jointly by the European Commission and The Hague Conference on Private International Law, brought together legal practitioners, judges, academics and government officials who deal practically with the challenges associated with the cross-border protection of vulnerable adults in Europe and beyond.

STEP’s EU cross-border expert Richard Frimston TEP joined panellists to discuss the need for an international and regional legal framework for the cross-border protection of vulnerable adults from the perspective of organisations providing services and/or protection. Richard was accompanied by representatives from Dementia Alliance and Alzheimer’s Disease International, AGE Platform Europe, CEOs in global banking and the President of the International Union of Notaries (UINL).

Richard is the coordinator of the Protection of Adults in International Situations Project Team and spoke on behalf of STEP as a member of the Board and Co-Chair of the Public Policy Committee. He delivered some pertinent points on the need for a protective framework for our increasingly aged society and those living with disabilities, and their supportive loved ones, including family members and guardians, in accordance with their human rights.

He expressed concern with powers of representation which are generally not measures of protection, unless confirmed with sufficient legal process, and the manner of exercise of such powers of representation being governed by the law of the state in which they are exercised. He argued for more balance between the protection and autonomy of individuals, and called for improved methods of powers of representation to be accepted cross-border.

The conference emphasised that this work is invaluable since the Hague Convention determines which courts have the jurisdiction to take protection measures, and which law is to be applied in circumstances when a vulnerable person requires it.

Importantly it establishes a system of central authorities to cooperate with one another and locate vulnerable adults, as well as providing information on the status of vulnerable persons to other authorities. Although much work has been carried out already, more could be done to improve the quality of European law, increase practical guidance in the European legal field and enhance European legal integration.

STEP is asking members for any practical examples of when they have encountered difficulties in practice in relation to England and Wales not having ratified the Hague Convention. Please email STEP’s policy team if you have any feedback on this issue, at step@policy.org.

STEP will keep you updated on the outcome of these discussions.

Emily Deane TEP is STEP Technical Counsel

Committee draws probate fees legislation to UK parliament’s special attention

Daniel NesbittUPDATE 07/12/2018

The Joint Committee on Statutory Instruments’ full report (PDF) has now been published and includes the following conclusion:

The Committee draws the special attention of both Houses to this draft Order on the grounds that, if it is approved and made, there will be a doubt whether it is intra vires, and that it would in any event make an unexpected use of the power conferred by the enabling Act.

The Committee reached the same view regarding the government’s attempt to raise probate fees in 2017. Underlining this position, the report notes that the Ministry of Justice’s arguments did not ‘dispel the Committee’s doubts about vires expressed in its report on the 2017 Order’.

The depiction of the changes as a ‘fee’ was also challenged by the Committee, which felt the new banded system bore the characteristics of a tax. The report noted that the higher payments were disproportionate to the actual cost of the service and that the measure represented what was in effect a type of stamp duty on probate applications.

The views expressed by the Committee match the legal opinion STEP obtained from Richard Drabble QC in response to the 2017 proposals.

ORIGINAL BLOG 6/12/2018

The Joint Committee on Statutory Instruments has scrutinised the Non-Contentious Probate (Fees) Order 2018, and drawn it to parliament’s special attention.

The committee is responsible for examining the technical aspects of secondary legislation; ensuring that the drafting is correct, clear and within the powers granted by the act under which they are being made. Although it can highlight measures it believes to be of concern, the Joint Committee cannot block or amend legislation itself.

The other committee tasked with examining secondary legislation, the House of Lords Secondary Legislation Scrutiny Committee, in the 6th Report of Session 2017–19 (PDF) has also drawn parliament’s attention to the measure, calling it a ‘stealth tax’.

The next stage for the order in the House of Lords is for it to be voted on; and as an affirmative measure it will require a majority to pass. In the House of Commons a delegated legislation committee will be convened to scrutinise the legislation.

The Joint Committee’s full report on the order, setting out its detailed views, is yet to be published but it is expected to be released tomorrow (Fri 7 Dec 2018).

STEP will continue to monitor the situation and will provide updates where appropriate.

Daniel Nesbitt, Policy Executive, STEP 

UK Labour party tables motion against probate fees rise

Houses of Parliament, LondonThe UK government’s plan to increase probate fees has been criticised by the opposition in the House of Lords.

Labour’s Justice Spokesperson, Lord Beecham, has tabled the following motion of regret in relation to The Non-Contentious Probate (Fees) Order 2018:

‘Lord Beecham to move that this House regrets that the draft Non-Contentious Probate (Fees) Order 2018 will introduce a revised non-contentious probate fee structure considered by the Secondary Legislation Scrutiny Committee to be “so far above the actual cost of the service [it] arguably amounts to a stealth tax and, therefore, a misuse of the fee-levying power” under section 180 of the Antisocial Behaviour, Crime and Policing Act 2014; and that this Order represents a significant move away from the principle that fees for a public service should recover the cost of providing it and no more.’ 6th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A).

As statutory instruments cannot be amended, this type of measure can put parliamentarians’ disapproval on record, if passed. Motions to regret are usually voted on at the same time as the legislation.

The probate fees order is currently awaiting scrutiny by the Joint Committee on Statutory Instruments. As noted by Lord Beecham’s motion, the House of Lords Secondary Legislation Scrutiny Committee has already voiced its concern [PDF] about the proposals.

STEP will continue to monitor the situation and will provide further updates where appropriate.

Daniel Nesbitt, Policy Executive, STEP 

House of Lords report criticises HMRC’s treatment of taxpayers

HMRCThe House of Lords Economic Affairs Committee has found that HMRC is failing to guarantee fairness for taxpayers by failing to differentiate between users of sophisticated tax avoidance schemes and ordinary citizens who break the law through uninformed or naive actions.

In its report, The Powers of HMRC: Treating Taxpayers Fairly (PDF), the committee found that declining resources had left HMRC unable to tackle tax avoidance and evasion whilst ensuring taxpayers are treated fairly. Highlighting a number of areas where the HMRC’s conduct appeared disproportionate, the committee recommended further work take place to ensure there is sufficient oversight of the department.

The report heavily criticised the process HMRC uses to introduce new powers, noting that too often specific solutions were identified by the department before any consultation on the wider objectives. The committee recommended that HMRC listen more carefully to the views of tax and business experts during future consultations, to ensure new legislation is properly targeted.

The committee said new measures on offshore time limits should be withdrawn, pending further discussions between HMRC and tax professionals. The plans would require those with offshore elements to their tax affairs to keep records for up to 12 years to deal with HMRC questions. Any new legislation should be more proportionate and targeted than the current plans allow.

There was heavy criticism for proposed new civil information powers, which would allow HMRC to seek information from third parties without the agreement of the tax tribunal, or the relevant taxpayer. The committee said HMRC had failed to offer a convincing rationale for the change, and recommended it be withdrawn ahead of further consultation.

The committee also noted that the government has a responsibility to give HMRC sufficient funding to be fair to taxpayers. The Treasury is recommended to assess whether the department is adequately resourced as part of the 2019 Spending Review.

The next stage in the process is for the government to respond to the committee’s findings. STEP will monitor the situation and provide updates on any further developments.

Daniel Nesbitt, Policy Executive, STEP 

OTS report supports STEP’s calls for simplification

Simon HodgesThe UK Office of Tax Simplification (OTS) has published its first report of its review into inheritance tax (IHT).  The report, in which STEP is widely quoted, finds that the process for completing IHT forms is too complex and old fashioned, and that too many people are having to fill them in unnecessarily.

The OTS is undertaking this two-part review of IHT in response to the request from the Chancellor of the Exchequer in January 2018. Since the review was announced, STEP has been in regular contact with the OTS. STEP’s response to the consultation was one of more than 3,500 to be submitted to the OTS, with the overwhelming majority seemingly negative about the IHT process.

The report concentrates on the concerns and administrative issues facing the public and professional advisors when confronted with the IHT process and related forms. It includes a number of positive recommendations, such as potentially reducing or removing the requirement to submit forms for smaller or simpler estates, especially where there is no tax to pay; having standardised requirements; and automating the system by bringing it online.

STEP has long argued that the IHT system is too complex, and that any moves to simplify the process, particularly through the implementation of a digital system, will be beneficial for bereaved families.

The Chancellor will now review the OTS recommendations before deciding whether to implement or ignore them. The key recommendation from the OTS, that ‘The government should implement a fully integrated digital system for inheritance tax, ideally including the ability to complete and submit a probate application,’ will be the mostly keenly watched, not least by STEP members.

As the report notes, inheritance tax and probate are closely linked, so it is timely that the OTS recommends that HMRC and HM Courts and Tribunals Service (HMCTS) liaise on streamlining the payment and probate process. As has been widely reported, legislation currently before the UK parliament would see a radical change to the probate fee system in England and Wales, and will mean an increase in fees for the vast majority of families. This approach has already been criticised in the House of Lords, and this latest OTS report further highlights the need to simplify the tax system surrounding death, rather than complicate it further.

We will keep members updated.

Simon Hodges is Director of Policy at STEP