HMCTS announces interim operational arrangements

emily-deane-tep-2018-v2Update 25 August 2020: HM Courts & Tribunal Service (HMCTS) has provided some further guidance in relation to submitting England and Wales probate applications in the correct format:

  1. If you have lodged an application through the online portal using your registered account you do not need to send any application forms, when you send in the will and other supporting documents. If you send either of the application forms, PA1P or PA1A, this will delay your application. Please only send in the supporting documents requested on the summary page.
  2. Form PA13 is only for use by personal applicants and not to be used by legal professionals. Please lodge the usual lost will affidavit and supporting exhibits. Changes are being made to GOV.UK and form PA13 to show only for use by personal applicants. Using form PA13 will delay your application if you have not provided an affidavit.

More information on on how to apply online is provided here: www.gov.uk/guidance/hmcts-online-services-for-legal-professionals.

Update 11 June 2020: HMCTS has published the attached FAQ document (pdf) for professional users of the Probate Service to support professionals with online applications. HMCRS has confirmed that this is a working document which it intends to continually update as the process continues to evolve.

If you have any feedback on the FAQs please send your comments to policy@org.uk.

Update 1 May 2020: HMCTS met with STEP, the Law Society, SFE and ICAEW this week for its regular Probate Service meeting. The following updates were provided:

  • The combined form is timetabled for approximately two weeks’ time and a formal notification will be provided.
  • Partners who are Executors are now able to make online applications.
  • Trust corporations and others which are currently unable to apply online will be added to the process over the next couple of months.
  • HMRC intends to start sending IHT421 forms directly to the Probate Registry within 15 days of issue. A formal notification will follow when this has been implemented.

We have requested an additional meeting in the next ten days to discuss specific form issues with HMCTS and the Probate Registrar. Please contact us at policy@step.org if you have issues that you would like to be reported.

HMCTS has also enquired whether firms are struggling to get the original wills to the Probate Registry during remote working. Please do let us know if this is the case.

Original blog: HMCTS has announced some interim operational arrangements that it will be making in light of the COVID-19 restrictions. The key changes will relate to the following areas:

  • acceptance of statements of truth in place of affidavits,
  • guidance on the signing/witnessing of renunciations and powers of attorney,
  • Statutory Instrument 2020 No 33: The Administration of Estates Act 1925 (Fixed Net Sum) Order,
  • probate practitioner forms and electronic signatures.

Acceptance of statements of truth in place of affidavits 

Statements of truth can be accepted in place of affidavits in the following circumstances:

  • identity of executor,
  • misrecital of date of will in codicil (if rectification not required under S20 Administration of Justice Act 1982),
  • Rule 41 – amendment of grant,
  • Rule 41 – revocation of grant,
  • Rules 30(1) (a),(b) and (c),
  • Rule 35(4),
  • Rule 13 (knowledge of content of will),
  • Rule 14 (alterations in will),
  • Rule 15 (attempted revocation of will).

HMCTS is awaiting further advice in relation to the acceptance of statements of truth for use in applications that specify evidence must be submitted by affidavit.

Guidance on the signing/witnessing of renunciations and powers of attorney 

Documents including renunciations and powers of attorney that are required to be signed as a deed before a disinterested witness may be effected in the usual way using any method of signing/witnessing that can be achieved under the safe distancing measures currently specified by the government. HMCTS will not look beyond any document that is submitted that is signed and witnessed in the usual way, including the use of electronic signatures.

Statutory Instrument 2020 No 33: The Administration of Estates Act 1925 (Fixed Net Sum) Order 

With effect from 6 February 2020 the fixed net sum for spouses and civil partners of persons who have died after that date without leaving a will has been increased to GBP270,000. If you have been issued with a grant of Letters of Administration since 6 February 2020 and you believe the entitlement to the estate may have been affected by this, you are advised not to administer the estate and, if you are a personal applicant, to seek legal advice.

Probate practitioner forms and electronic signatures 

HMCTS has received queries from practitioners in respect of whether the new forms are for use by practitioners and personal applicants. These forms will become a combined form for use by both at the end of the transitional period and will be uploaded as a combined form on the gov.uk website.

For clarity, the links to all the relevant paper forms for probate professional practitioners only to use are:

You can find where to send your forms at the Directory of probate registries and appointment venues (PA4SOT).

Please note: All forms for practitioner use contain the following statement in the title for probate professional practitioners only. If this statement is not included, the application is only for the use of personal applicants at this stage.

‘HMCTS advises that any new work which is undertaken should now be completed by either using the new paper application forms (electronic signatures including typed signatures will be accepted) or you could alternatively apply online. HMCTS is actively encouraging the use of online applications as this enables us to maintain the service whilst many of our staff are also remote working.’

For further information on how to apply online, please use HMCTS online services for legal professionals.

STEP will continue to keep you apprised of any changes to the service made by HMCTS.

Emily Deane TEP, STEP Technical Counsel

PCRT: Continuing to raise professional standards

Business people discussion advisor conceptThis week we publish a short report reflecting on the use of PCRT (Professional Conduct in Relation to Taxation) by the professional bodies since the Standards for Tax Planning were added in March 2017.

STEP became a signatory to PCRT in 2011 following its inception 25 years ago by the other UK tax bodies. PCRT is reviewed annually and updated by representatives of each of the seven bodies (along with STEP, these are AAT, ACCA, ATT, CIOT, ICAEW and ICAS).

In its present form, PCRT sets outs the Fundamental Principles and Standards for Tax Planning behaviours required by all our full, associate, affiliate and student members when they are advising on UK tax (regardless of the jurisdiction in which they may be based).

While 2017 saw the Standards introduced, the version issued on 1 March 2019 was the first major restructuring in 25 years to take account of feedback from our members. The updated help sheets provide guidance on how members can apply PCRT to their day to day professional activities, exercise their professional judgement and resist any undue pressure they may receive from clients or employers to act in an unethical manner. The help sheets focus on

  • submission of tax information and tax filings,
  • tax advice,
  • dealing with errors,
  • request for data by HMRC,
  • members personal tax affairs.

Application of PCRT

STEP’s Code of Professional Conduct sets out our core standards, and PCRT supplements this. It does not stand in isolation, and any member who is found to be in breach of PCRT will likely have breached our core Code, other membership requirements, plus any regulatory requirements that members may have to abide by.

PCRT does not only affect members in professional practice. Its Fundamental Principles and Standards of Tax Planning apply to all members who practise in tax, including employees attending to the tax affairs of an employer or client, those dealing with their own tax or that of their family, friends, charities, etc, whether or not for payment, and those working in HMRC or other public sector bodies or government departments.

Tax agents who are not members of any of the signatory bodies are not ‘off the hook’ either. All agents, including those with no professional qualifications at all, are covered by HMRC’s own Standards for Tax Agents published on 4 January 2018, which incorporates the principles of PCRT.

The eagle-eyed among you will have noticed HMRC’s current call for evidence on ‘Raising standards in the tax advice market’. STEP will be responding to this call for evidence by its closing date of 28 May 2020.

How do members use PCRT?

At its simplest level, PCRT is intended to guide and assist members, enabling them to ensure that they undertake work effectively and appropriately. In practice it is being used as a reference point for professional standards, helping members make informed choices.

PCRT helps members demonstrate the required standards to clients and employers, and assist with explaining why some planning arrangements are not suitable and cannot be undertaken, helping members to support their colleagues and fellow professionals in making correct decisions, and showing a commitment to ethical practice.

As professionals, members serve their clients’ interests, but also uphold the reputation of the tax profession, and the reputation of STEP as a society, all of which take account of the wider public interest. PCRT is a powerful tool in helping us retain public confidence in the work of members.

In these various ways, PCRT appears to be working successfully in supporting members, their clients and the wider community by describing the standards of behaviour that clients can expect when seeking advice on their tax affairs.

How do the professional bodies use PCRT?

PCRT has been widely promoted and debated by the professional bodies across our member communications, and its Fundamental Principles and Standards for Tax Planning play an essential role in promoting ethical conduct among our members.

STEP, along with each of the professional bodies, has entered into a memorandum of understanding with HMRC, allowing HMRC to report to us any alleged misconduct by any of our members. Where such a report is received, we will use the PCRT Fundamental Principles and Standards of Tax Planning to assess whether an appropriate professional approach has been adopted to determine whether we need to commence an investigation under our own Disciplinary Rules.

Finally, HMRC’s report, ‘Measuring tax gaps 2019’ shows a significant reduction in the tax gap attributable to tax avoidance. While there is no direct evidence, each body is of the firm belief that the changes to PCRT have helped to support this reduction. Any questions should be sent to Sarah Manuel, STEP’s Professional Standards Manager at standards@step.org.

The above has been adapted with agreement from Tax: Raising professional standards, first published by ICAS, April 2020.

Update on HMRC’s Capital Gains Tax Manual

Robin_Vos 100Following a query raised on the Trusts Discussion Forum, STEP’s UK Technical Committee has been considering the capital gains tax consequences of a deed of variation of a will in circumstances where the asset which is the subject of the variation has already been disposed of by the original beneficiary.

The specific issue raised was whether the original beneficiary should be taxed on the disposal of the asset or whether the capital gains tax deeming provisions relating to deeds of variation have the effect that the donee under the deed of variation should be treated as having disposed of the asset.

Part of the uncertainty had been caused by the apparent inconsistency of two paragraphs in HMRC’s Capital Gains Tax Manual: CG31600 and CG31630.

The committee has been in correspondence with HMRC in order to clarify this point. HMRC has confirmed that:

  1. It is possible to have a valid deed of variation in relation to an asset which has already been disposed of by the original beneficiary.
  2. The effect of the deeming in s.62(6) TCGA is that the donee under the deed of variation is treated as having acquired the asset from the personal representatives and must therefore also be deemed to be the person who disposed of the asset.
  3. If the original beneficiary and/or the donee have already filed tax returns for the relevant tax year they will be able to amend their tax returns and/or make a claim for relief from overpaid tax.

HMRC has amended paragraph CG31600 of its CGT Manual to reflect its view.

Robin Vos TEP, Chair of STEP’s UK Technical Committee.