A welcome return to STEP Canada to attend the 21st National Conference

Canada student winnersIt was an absolute pleasure to be back in Toronto, Canada for the 21st National Conference, the STEP Canada Board meeting and AGM. I had visited in February, early in my tenure, given the importance of the region to STEP overall and to learn more about how we operate in different parts of the world.

I was joined on this trip by Simon Morgan TEP, our worldwide Chair and Jim Walkinshaw, COO Finance and HR, from the London office.

We met the Canada Board on the first day, and then attended the AGM and Board meeting. It was great to meet the incoming and outgoing board members and get the opportunity to update the Canada Board on what we are working on in the worldwide office to further the vision and mission of the society.

In the evening we moved on to a reception which included Simon Morgan and STEP Vice Chair Nancy Golding TEP presenting Prof Albert Oosterhoff with Honorary Membership of STEP. Prof Oosterhoff became the second Canadian to receive such an honour and is one of only 11 worldwide.

The next morning saw the conference open and 784 delegates converge on the Metro Toronto Conference Centre. After the formalities, we were into the first session of the day with Richard Hay TEP leading us through a masterclass thought-leader piece on the effects of globalisation on the tax collection of nation states. The question of whether we could be headed toward a central taxing authority that imposes globally-coordinated taxation may not be so far-fetched; how would we have reacted to the current disclosure rules ten or 15 years ago?

Alongside the many important technical sessions the two other stand-out pieces for me (as a non-practitioner) were the lunchtime sessions. On Thursday we listened to S Jay Olshansky from the University of Illinois looking at ageing and longevity; some of the ‘markers’ for that were surprisingly basic, eg the younger you look, the older you tend to live, and what impact that should have on planning for future health and finances. On Friday we had the equally thought-provoking Caron Croland Yanis sharing her experiences on the intersection of family values, sustainable governance and technical compliance in philanthropy.

Before heading off to dinner we were delighted to attend the Student Awards ceremony where the latest winners were recognised (pictured). I always enjoy these type of events and getting to meet the brightest of the new professionals coming through, and I’m confident that we saw some of the future leaders of the profession. Dinner that evening had to be the networking and social highlight of the two days – held at Arcadian Court, an historic and impressive art deco event space.

For me the barometer of a conference’s success is how many people are still actively engaged at the end of the event – and STEP Canada certainly set the bar high by having a varied and well thought-through programme that kept most of the delegates through to the final sessions.

It certainly met our mission statements of promoting high professional standards, educating professionals and connecting advisors. As ever with these events, the eventual success sits deep in the planning, and I saw first-hand during my visit back in February how detailed, focused and accountable that planning was. Based on that, the event was always going to a success!

Altogether it was a very informative and enjoyable few days. I genuinely learned lots, I have seen content and formats that we can use, and/ or adapt for the Global Congress in Dublin next year, and the networking was outstanding.

Huge congratulations go out to the whole STEP Canada conference programme committee led by Corina Weigl TEP (Chair), Brian Cohen TEP and Richard Niedermayer TEP (Co Deputy Chairs) and the fabulous staff team led by Michael Dodick and Janis Armstrong. What a formidable force to have behind the biggest conference event in the STEP calendar.

It’s always interesting to see what other conferences are on in a major venue. As I arrived in Toronto the hotel and centre was full of body builders at the 2019 Toronto Pro Supershow and EXPO, and as we left the cannabis industry had moved in for the 2019 Toronto Cannabis EXPO – it’s a booming market after it was legalised last year…

Mark Walley is CEO of STEP

What can you do to improve employee engagement?

Christopher TaliaWe all know that employee engagement is important, but that doesn’t mean it’s easy to get right. Next month’s STEP Employer Partnership Programme (EPP) Summer Forum will look at this key area, and help you devise a strategy that works for your organisation.

Employee engagement can mean different things to different people. Some will see it as recognition, others as financial reward. No matter how you view it, employee engagement holds three distinctive characteristics: realising employee potential; clear and shared organisational goals; and promoting employee wellbeing.

Many organisations fall short of achieving one, or all of these factors, leaving employees feeling under-appreciated, and in turn, unwilling to perform at their full potential. So how can employers bridge the ‘employee engagement’ gap while ensuring business success?

The forum, Employee engagement: boosting employee capability and potential for business success, will be hosted by Platinum Employer Partner RSM, and will share valuable insights from the following industry practitioners:

All our speakers have substantial experience in different jurisdictions including Guernsey, Jersey, Switzerland and the UK. Each will share her own experiences, strategies and learning on how they have successfully developed and implemented programmes to support employee engagement.

Key topics will include: what employee engagement means, understanding flexibility in the workplace and understanding gender diversity and inclusion.

If you have ever wanted to know how you can increase both your employees’ potential and their engagement levels, then this is the forum for you. I look forward to seeing you there to learn more about employee engagement.

Christopher Talia, Programme Manager, Employer Partnership Programme, STEP (Christopher will officially join the EPP team from mid-July).

5AMLD consultation: STEP’s view

Emily Deane TEP

The UK Treasury has published a consultation paper on the transposition of the EU’s Fifth Anti-Money Laundering Directive (5AMLD), which expands upon the scope of registration for trusts and widens the accessibility provisions to the beneficial ownership records. The 5AMLD Directive provides for public access, but it is up to each Member State to decide whether or not they will restrict this.

Express trusts

5AMLD will require that all UK express trusts register with HMRC, not just those with UK tax consequences (as was the case with 4AMLD). It will also bring into scope non-EU resident trusts that own UK land or property. STEP is concerned that under 5AMLD, a much wider range of trusts will need to be registered. Express trusts may include co-ownership of land, insurance trusts and other dormant trusts, which will significantly enhance the number of trusts that need to be reported. The consultation seeks to clarify the definition of express trusts, which we hope will provide some clarity and narrow the scope.

Access to the register

There will be expanded accessibility provisions. In the UK, the records will be accessible by law enforcement agencies, any UK obliged entity that enters into a business relationship with a trust, and anyone who can show that they have a ‘legitimate interest’ in the data. An exception is that if a trust has a ‘controlling interest’ in a non-EU company, then anyone will be able to access the information by making a written request and no legitimate interest is required. A trust will be deemed to hold a controlling interest in any corporate or other legal entity when the trust has 25 per cent or more of either the voting shares or other means of control over that entity as defined in the Persons with Significant Control (PSC) guidance. It is currently unclear how legitimate interest applications will be dealt with by the government since ‘legitimate interest’ is not defined within 5AMLD.

Legitimate interest

The government will need to decide whether or not requests for trust data meet the definition of legitimate interest. The current train of thought is that those with legitimate interest should be limited to people with active involvement in anti-money laundering or counter-terrorist financing activity, or those who have reason to believe or evidence that a particular trust or person is involved with money laundering or terrorist financing.

We hope that the government will require strong evidence of illegality and/or wrongdoing that clearly implicates the trust concerned before agreeing to consider a legitimate interest application. There are many people who seek to obtain confidential information about individuals and families with wealth for purposes other than the exposure of illegality or wrongdoing. People are often keen to obtain information about the affairs of the wealthy and those in the public domain, for example, and we are concerned that vague assertions of impropriety could be used to obtain confidential information about family trusts.

The consultation does, however, acknowledge that many trusts are used for children and vulnerable adults, and requests for personal information on either of these will be given ‘special consideration’ and will possibly even be withheld, which we fully endorse.

Registration deadlines

For trusts already in existence on 10 March 2020, the government proposes a deadline of 31 March 2021 for them to register. This gives a long lead-in time, given the greater number of trusts that will need to be registered.

For trusts created on or after 1 April 2020, the government proposes that the trust should be registered within 30 days of its creation. The government envisages that this approach will be the most straightforward, as registration can occur as part of the set-up process, when the required details should be readily available to trustees/agents. The proposal for registration within 30 days for new trusts means there is no single deadline each year and it seems sensible for the trust to be registered at the same time it is created.

It is also intended that this 30-day deadline will be used for any amendments that need to be made to the trust register data, for example, to update an address or change a trustee.

Penalties

Due to the fact that 5AMLD extends registration to non-taxpaying trusts, the government considers that the self-assessment penalty regime is not a suitable basis for the 5AMLD penalty framework. The new regime is also being consulted on within the paper.

STEP will be submitting a response to the consultation, which closes on 10 June 2019. The transposition deadline is December 2019, with an implementation deadline of January 2020. There is an extended trust register deadline for the UK of March 2020.

Emily Deane TEP is STEP Technical Counsel

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.

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

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 

Employer partners gather at STEP Global Congress

STEP Global CongressWe’ve just returned from the STEP Global Congress in Vancouver – what a great event it was, reports Nigel Race.

Congress kicked off with two excellent keynote sessions on the theme of change: ‘Change has changed’, which was focused on change in the individual practitioner; and ‘Serving the New Clientele’, which looked at cultural types and an emerging client-hybrid culture. Two top-ranking speakers, James Grubman TEP and Dennis Jaffe TEP, made the case for developing stronger interpersonal skills and cultural knowledge to better serve clients and emerging client groups. We discussed with Dennis the possibility of bringing that session to a wider audience at some point in the future. Perhaps this might be a special offer for STEP’s Employer Partnership Programme (EPP)!

And on the theme of EPP, it was fantastic to see so many accredited firms present this year. There were no EPP-accredited firms at the first Congress in Miami, only a couple at Amsterdam in the very early days of EPP in 2016, and now, at Vancouver, we had 11 partners*. It is growing into a great community and will only continue to grow. It was nice to bump into Leanne Kaufman TEP, President Royal Trust, RBC, who has done so much to support STEP and EPP. And many congratulations to Borden Ladner Gervais LLP on its award. What a cheeky move to achieve the accreditation just in time to receive it on home soil and at the STEP Global Congress! Nancy Golding TEP, a member of the STEP Worldwide Board, received the award on the Friday morning in front of the whole auditorium. Well done to Nancy and her colleagues at BLG – we were delighted to make the award to you.

With Congress now over, we’ve been taking stock and reviewing the event. Feedback from sponsors and delegates has been outstanding. We had 95 per cent of delegates rating it as excellent or good, 97.5 per cent saying they would attend a similar event in the future, and the sponsors were delighted to have so many high-profile, senior figures in the industry.

STEP has already received bids to hold the next event – watch this space!

*EPP attendees at STEP Congress:

  • Burges Salmon (England and Wales)
  • RBC Estate & Trust Services (Canada)
  • Rawlinson & Hunter (Cayman Is, E&W)
  • BLG (Canada)
  • Farrer (E&W)
  • Wright Johnston & Mackenzie (Scotland)
  • Stonehage Fleming (Switzerland)
  • Mishcon de Reya (E&W)
  • Butterfield Trust (Guernsey)
  • Carey Olsen (Guernsey)
  • Bedell Cristin (Jersey)

 

Nigel Race is Director, Professional Development at STEP

GDPR – Invitation to Members

Emily Deane TEP

Even though the European General Data Protection Regulation (GDPR) came into force on 25 May this year in the UK there is still widespread confusion around its application to the private client industry.

STEP has formed a Data Protection Impact Group with the objective of reviewing the GDPR’s impact in relation to the trust and estate industry. The group would like to collate some of the practical issues that have arisen and submit them to the Information Commissioner’s Office (ICO) with the intention of the ICO addressing some of the gaps in the guidance and legislation.

Tell us your views

STEP would like to invite members to provide examples of how the ICO guidance/legislation may be difficult to apply in practice, so that we can present these issues to the ICO and underline that the impact is potentially far-reaching.

Issues that have been identified include:

  • Firms will be holding large amounts of personal data on clients and non-clients relating to their wills, family trusts and estates. Information (‘special category data’) on individuals other than clients is generally required in order to carry out the client’s instructions, for example a will. However as it stands a firm will have to obtain consent from third parties for this information because there are no express exemptions that apply in Article 9(2). Unlike the express exemption for ‘legal advice’ in the DPA 1998.
  • Subject access requests have become a first port of call now for potential beneficiaries who are seeking further information about a will or trust. It is currently very difficult for an advisor to gauge how much information they can provide or restrict and what the applicable justifications are for doing so.
  • The majority of private client firms in the UK will also undertake international work. File notes and legal documents containing personal data will need to be sent to third countries. If this data applies to a client it is possible to reply upon their consent to the transfer, however when the data relates to non-client data subjects then their consent is required. There does not appear to be an exemption in the GDPR that deals with this common occurrence.
  • Firms are currently uncertain as to whether they should destroy/delete some of the personal data that they hold, for example, some personal information that is held on a family member could be more pertinent to one person than another. The firm may be exposing itself to risk by destroying data that become relevant at a later date.
  • There is uncertainty as to whether all potential beneficiaries of a trust or estate should be provided with a copy of the trust’s privacy policy, even when the settlor or testator was adamant that they did not want the individual, who may be vulnerable, to know that they may benefit at some stage.

STEP is hopeful that by providing the ICO with some working examples then it might recognise and review the difficulties that advisors are facing in this connection. We aim to provide members with a best practice position when further information is available.

We would very much value your input. Please send your examples to standards@step.org.

Emily Deane TEP is STEP Technical Counsel