Practitioner perspective: We need to work together to help vulnerable clients

Robin Melley TEPVulnerability is not synonymous with poverty or age, it can happen to anyone, at any time.

While I have been interested in vulnerability for many years, it was the development of my firm’s corporate social responsibility (CSR) policy, with the theme, ‘vulnerability and combating financial abuse,’ that really crystallised my desire to develop my technical knowledge.

The issue was highlighted for me when I started working with NS&I Premium Bond winners, who had each scooped a GPB1 million jackpot. You might not think such a group are people to be concerned about, but I discovered there are sometimes substantial difficulties faced by those who come into ‘sudden wealth’, particularly vulnerable minors and elderly people who have lost mental capacity.

For me, it highlighted the fact that we, as professional advisors, should not try and pigeonhole people as vulnerable, but look at a person’s overall circumstances and make sure we consider potential vulnerabilities for all clients.

Everyone is potentially vulnerable

Importantly for financial planners such as myself, and, I’d think, most STEP members, dealing professionally with vulnerability should be at the core of our work. It is too important an issue to be relegated to a compliance tick-box exercise. The Financial Conduct Authority (FCA) is in the middle of a consultation on vulnerability; and the risk is that advisors fall into the trap of viewing ‘vulnerable clients’ as a defined group of people and focus on complying with a set of regulatory requirements.

In real life, everyone is potentially vulnerable, and the signs of vulnerability are often not immediately obvious. Consequently, the issue of vulnerability has to be embedded in the advice process for all clients.

I believe it’s also vital for chartered financial planners, lawyers, and other professionals to work together. For example, when there is an application to the Court of Protection for gifts to be made, the legal advisor usually needs to demonstrate that the attorneys are acting in the donor’s best interests and fully meeting their obligations under the Mental Capacity Act 2005. A chartered financial planner can provide support by undertaking detailed analysis, incorporating a lifetime cashflow forecast to demonstrate the long-term financial consequences of making gifts at the levels proposed.

Helping our fellow human beings is a basic human instinct and, like many STEP members, I have spent my career helping clients solve some of their problems to satisfy their aspirations for themselves and their families. It has been very gratifying to help them, often supporting them with issues not normally considered part of the financial planner’s responsibilities, and it’s a special feeling to give a safe pair of hands to a client who particularly needs help.

Watch out for abuse

Financial planners who adopt a holistic approach with clients can often spot problems because of the nature of the long-term (and often lifelong) relationship they have with clients, where they are meeting on a regular basis. He or she is well placed to pick up on any cues of possible financial abuse. I have, for instance, become aware of an adult child attempting to persuade an elderly parent to make gifts to them to the detriment of the parent; and have been able to intervene to guide and support the client in what is often an emotional situation.

Why I took the STEP Diploma

I realised I could better help others by deepening my understanding and achieving a higher level of technical competence. The STEP Diploma in Advising Vulnerable Clients offered the most comprehensive professional qualification in this area. I certainly found it a challenge finding the time over the last three years to study, but it has been hugely worthwhile. I have learned so much and it has enabled me to adapt our approach to financial planning to be more closely aligned with the needs of those who find themselves in vulnerable circumstances.

Examples of the improvements include the provision of detailed information and guidance to the parents of minors, to ensure they are clear on their fiduciary duties and obligations, and improving the way in which we refer to and collaborate with legal advisors.

Put simply, I believe that I am a better financial planner because of what I have learned through the attainment of the STEP Diploma and becoming a Full Member of STEP. The biggest beneficiaries are, of course, our clients.

Robin Melley FPFS TEP is a Chartered Financial Planner, at Matrix Capital in Shropshire.

STEP welcomes UK government response to Fifth Anti-Money Laundering Directive consultation

Emily Deane TEPHM Revenue & Customs (HMRC) and HM Treasury (HMT) have published a response to the technical consultation ‘Fifth Money Laundering Directive and Trust Registration Service’. The consultation ran from January to February 2020 and sought views on how the Fifth Money Laundering Directive (5AMLD) should be transposed, and how certain processes could work for the expanded Trust Registration Service (TRS).

STEP submitted a consultation response and has held numerous meetings with HMRC and HMT over the last 18 months, on various issues related to the implementation of 5AMLD.

One of STEP’s outstanding concerns has been in relation to the interpretation of the business relationship point, which could have had an incredibly damaging effect on the use of UK professional service providers if interpreted in the same way as 4AMLD. We have been advising the government on the negative impact that a wide interpretation of the directive could have on the industry, and we are delighted to see that our recommendation has been accepted.

Para 2.15 of the consultation confirms that, ‘the government has opted to take a measured approach and will only require non-UK trusts to register on entering a business relationship with a UK obliged entity if the trust has at least one UK resident trustee. This means that non-UK trusts will not be required to register if their only link to the UK is through a business relationship with a UK based adviser.’

There is also a significant expansion of the categories of trust that will not need to be reported, which will ease the reporting burden on our members, although we were disappointed to note that bare trusts have not been exempted from registration as we would have liked. The government has also recognised that it would not be appropriate to require trusts created by will to register on the TRS if they are wound up within two years of death.

STEP also had concerns over the ‘legitimate interest’ application process, and the consultation confirms that it will aim to ensure that each request will be reviewed on its own merits, and access will be given only where there is evidence of money laundering or terrorist activity. We will continue to engage with the government on this issue.

The government has set a deadline of 10 March 2022 for existing trusts to register on the TRS, or to update their records if they have already done so. A 30-day deadline will be imposed for new trust registrations and updates. The regulations to implement the provisions have now been laid before Parliament for consideration.

We are very pleased that our discussions and papers have been taken into consideration so comprehensively, and we will continue to engage with the government on the remaining policy issues and assist with the development of the guidance.

 

Emily Deane TEP, STEP Technical Counsel

 

STEP’s first Virtual UK Annual Tax Conference

Robert CaringtonThe first STEP Virtual STEP UK Annual Tax Conference was held on 26 June with over 800 people attending online. The day was a radical departure for STEP, with conventional meetings postponed or cancelled due to COVID-19. While it did include some glitches, attendees have the opportunity to catch up on any material they missed, with presentations available for a full year.

The day saw some outstanding STEP members speaking on topical matters, and we were delighted to host Emma Chamberlain OBE TEP, Robert Jamieson TEP, John Barnett TEP, Dawn Register TEP, Katherine Bullock TEP, John Woolley TEP and Deborah Clark TEP.

Emma Chamberlain presented the first session, giving an update on inheritance tax (IHT), which covered the Barclays Wealth case and the resulting legislation on excluded property settlements; and the definition of charity in IHT after the Routier case and its implications. She noted the work done by the Office of Tax Simplification and the All-Party Parliamentary Group for Inheritance & Intergenerational Fairness (APPG) on IHT reform was something to watch.

Robert Jamieson TEP covered capital gains tax (CGT) main residence relief and the statutory changes in the Finance Bill 2020 relating to residency, in a comprehensive presentation.

John Barnett TEP gave an informative update on Agricultural Property Relief (APR) and Business Property Relief (BPR), covering their structure, key cases such as Gill and Brander; and finishing with predictions on their reform; he noted that the CGT uplift was the most likely to be reformed by any government in the near future.

The afternoon session started with Dawn Register TEP giving advice on dealing with HMRC, covering areas such as its No Safe Havens 2019 programme to ensure offshore tax compliance and its risk assessment process. She also explained changes made due to the COVID-19 pandemic, including the relaxation of some deadlines.

Katherine Bullock TEP followed with a practical session focused on such IHT calculations as chargeable lifetime gifts, how to arrange settlements and when grossing up is necessary.

John Woolley TEP was next with an update on pension transfers and lump sum IHT plans following the Staverley decision in the Supreme Court in May 2019. John covered the advantages and disadvantages of death benefits being paid through either flexi access drawdown or by-pass trusts the protection of funds on divorce or insolvency; and dealing with the valuation issues of the ten-year periodic charge and their impact on loan trusts and discounted gift trusts, as well as any problems that may arise.

The final presentation of the day was from Deborah Clark TEP who spoke on family investment companies and their use. Her presentation covered their structure and funding and asset protection as well as how they were treated by income tax.

  • Our thanks to the event’s sponsors: James’s Place, Fraser and Fraser, National Philanthropic Trust, Octopus Investments, and Remember a Charity.

Robert Carington is Policy Executive at STEP

The five most common reporting errors for trusts to avoid

HM Revenue & Custom’s (HMRC) compliance team has identified the five most common errors made by UK administered trusts which are Financial Institutions (FIs) when fulfilling their obligations under the International Tax Compliance Regulations 2015.

These obligations relate to Automatic Exchange of Information (AEOI) which includes the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA). Any errors should be rectified by submitting amendments using an online HMRC AEOI account, or if relating to the FATCA FFI list, an IRS FATCA online account.

1.Trusts wrongly classified for AEOI purposes

A trust can be either a FI or a non-financial entity. A trust will be classified as an FI where more than 50 per cent of its income is from investing, reinvesting, or trading in financial assets, and another FI has discretionary authority to manage these assets wholly or in part. A trust or settlement is regarded as being managed by an FI where either one or more of the trustees is an FI or the trustees have appointed an FI, such as a discretionary fund manager, to manage the trust’s assets or the trust itself. Trusts that are FIs have to register and submit AEOI returns to HMRC if they have reportable accounts. More information.

2.Due diligence requirements incorrectly carried out

Trusts that are FIs must carry out due diligence on their financial accounts to determine whether any are reportable accounts.  For trusts, financial accounts are the debt or equity interests in the trust. The equity interests are deemed to be held by any person treated as a settlor or beneficiary of all or a portion of the trust, or any other person exercising ultimate effective control, including trustees and protectors.

The debt and equity interests of the trust are reportable accounts if they are held by a reportable person. For example, if a settlor or beneficiary is resident in a reportable jurisdiction (outside of the UK), their equity interest is a reportable account.

The trust that is an FI must apply the due diligence rules in order to determine the identity and residence of its debt and equity interest holders. Please see the due diligence rules.

A trust that has reportable accounts must report the account information and the financial activity for the year in respect of each reportable account. The account information includes the identifying information for each reportable person (such as name, address, jurisdiction of residence, taxpayer identification number, date of birth and account number), and the identifying information of the trust (name and identifying number).

3.Mistakes when reporting discretionary beneficiaries and trustees.

A discretionary beneficiary will only be treated as an account holder in the years in which it receives a distribution from the trust. Other reportable accounts are reportable regardless of whether a distribution is made in the calendar year. More information (para 253).

4.Reporting entities as controlling persons.

Where an equity interest (such as the interest held by a settlor, beneficiary or any other natural person exercising ultimate effective control over the trust) is held by an entity, the equity interest holder will instead be its controlling persons. As such, the trust will be required to look through a settlor, trustee, protector or beneficiary that is an entity to locate the relevant controlling persons. (This obligation corresponds to the obligation to identify the beneficial owners of a trust under anti money-laundering rules). More information (para 253).

5.Errors relating to the IRS FATCA Foreign Financial Institution (FFI) list.

A trust that registers on the IRS FATCA registration website as being a FFI, will receive a Global Intermediary Identification Number (GIIN) from the IRS, upon approval. Some UK administered trusts are incorrectly registered on the FFI list, including trusts that do not meet the definition of being an FFI, or that have already been terminated.

Where FFI registration has been approved but is no longer appropriate, the trust should cancel the agreement. Cancelling a registration agreement that is in approved status will mean it will no longer be published on the FFI List and the GIIN will no longer be valid. The FATCA registration user guide contains guidance on deregistration and cancelling the agreement.

 

Emily Deane TEP, STEP Technical Counsel

Update from HMRC’s Trusts and Estates team

HMRC’s Trusts and Estates team met with the Agents Advisory Group and Capital Taxes Liaison Group in May and provided the following updates:

Operational update

Despite the unique challenges presented by the current COVID-19 situation, inheritance tax and trusts operational areas are currently meeting all key targets and processing post and new accounts within published turnaround times.

A new webchat service was launched in May, which can be used to obtain help when completing the IHT400 forms and schedules, and to answer other inheritance tax and probate questions.

HMRC confirmed that IHT421 forms can now be emailed directly from HMRC to HM Courts and Tribunals Service. HMRC is unable to email customers due to security protocols in place, but will either reply in writing, or add a note to the calculations.

There have been periods when the Trusts Helpline call response times have increased. If you are experiencing problems getting through, you can email HMRC at trustsfeedback@hmrc.gov.uk.

Digital signatures for IHT205

HMRC confirms that the digital signature process now applies to IHT205 forms, as well at IHT400 and IHT100 forms, until further notice. It will accept IHT205 forms that are not physically signed from professional agents, if:

  • the names and personal details of the legal personal representatives are shown on the declaration page;
  • the account has been seen by all the legal personal representatives, and they all agree to be bound by the declaration;
  • the agent includes the following statement:
    ‘As the agent acting on behalf, I confirm that all the people whose names appear on the declaration page of this Inheritance Tax Return have both seen the Inheritance Tax Return and agreed to be bound by the declaration on page 8 of the form IHT205.’

The GOV.UK website has been updated to reflect these changes.

Electronic submission of IHT form update

HMRC is offering Dropbox as a temporary measure to support agents when it is not possible or practical to submit IHT400 and IHT100 accounts by post during the COVID-19 disruption.

HMRC retains full ownership of all information/data that it places in Dropbox and all information/data that an agent submits there. Only the HMRC Dropbox account holder and the HMRC security audit team can access the information.

Time limits and penalties for late filing and payment

HMRC has updated the guidance on reasonable excuse to include occasions where customers have not been able to file their accounts on time due to the impact of COVID-19.

Claim time limits for IHT reliefs

HMRC has enquired about deadlines for IHT relief claims that may be impacted by the present disruption customers are facing. The three areas which have been raised are the time limits for: relief on property sales, relief on sale of shares and instruments of variation. HMRC is continuing to monitor the position.

STEP will continue to monitor the developments and update members accordingly.

Emily Deane TEP, STEP Technical Counsel

HMCTS announces interim operational arrangements

emily-deane-tep-2018-v2Update 11 June 2020: HM Courts & Tribunal Service (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.

 

UK government raises statutory legacy in England and Wales

Father and daughter at a beachThe UK government laid a statutory instrument on 15 January 2020, which increases the net sum that a surviving spouse or civil partner is entitled to receive in England and Wales where a person dies intestate leaving issue (children).

The new legacy has been increased from GBP250,000 to GBP270,000, and will come into force on 6 February. The formal title is the Administration of Estates Act 1925 (Fixed Net Sum) Order 2020.

Under the rules of intestacy, if there are no children, then the spouse or civil partner will inherit the whole estate. However, if there are children, then the spouse or civil partner will be entitled to all of the deceased’s personal property, the first GBP270,000 of the estate and 50 per cent of the remainder, leaving 50 per cent to be divided equally between the children.

How was the calculation made?

The government reviews the amount of the statutory legacy every five years and increases it in line with the Consumer Price Index.

When calculating the increase, the Lord Chancellor followed the standard methodology in Schedule 1A to the 1925 Act (following the amendments brought in by the Inheritance and Trustees’ Powers Act 2014). This involved calculating and then applying the change in the Consumer Price Index (CPI) from the ‘base month’ (October 2014) to the ‘current month’ – the most recent CPI figure available at the time of fixing the sum (November 2019, published by the Office for National Statistics on 18 December 2019). This equated to an increase of 8.1 per cent of the GBP250,000 sum, with the figure then rounded to the nearest thousand (as required by the Act), which resulted in the increase of GBP20,000.

STEP welcomes the increase to the fixed legacy, although we would caution that it is prudent not to rely on the rules of intestacy, and to make and review a will regularly.

Emily Deane TEP, STEP Technical Counsel

GDPR and trusts and estates: new guidance coming

STEP is aware that many members are looking for clarification as to how GDPR should be interpreted in the context of trusts and estates.

STEP’s Data Protection Working Group has made submissions to, and had discussions with, the Information Commissioner’s Office on this topic, and intends to publish guidance early next year (most likely in January or February 2020).

The topics covered by the guidance will include:

  • how to apply tests such as ‘number of staff’ and ‘turnover’ in the trusts and estates context;
  • the distinction between data processors and data controllers;
  • the extent to which GDPR applies to trustees and personal representatives acting in a non-professional capacity;
  • the legal basis on which trustees and personal representatives can process special category data;
  • the circumstances in which trustees and personal representatives should issue privacy notices to beneficiaries; and
  • the obligations on trustees and personal representatives when responding to subject access requests.

The Data Protection Working Group intends to add to this guidance in due course, including setting out views on matters such as the treatment of bare trusts and of attorneys and deputies.

Edward Hayes, Chair of STEP Data Protection Working Group