New probate fees: FAQ

UPDATE 21/04/2017: the Ministry of Justice has conceded that the new fee regime has been abandoned due to lack of parliamentary time. See more information.


Newcastle District Probate Registry has supplied the following FAQs to help practitioners implement the new probate fees.

Q. What happens in cases where there is a need for an HMRC Assessment will any delay mean I incur the higher fee?

In cases where you are required to submit an IHT 400 or any IHT document for assessment by HMRC for Inheritance tax purposes then it is possible for you to submit the appropriate forms to both HMRC and HMCTS Probate simultaneously. We will not issue your grant until the approved IHT 421 is received but we will mark your application as lodged. To assist us in not raising this as a query it would be advisable to clearly mark your application that the IHT document will follow after assessment.

Q. Do we have the actual date of implementation?

No we do not have the actual date of commencement yet. However we can assure you that on receiving that date a mail shot will be released immediately informing you of that date. HMCTS Probate would however like to work with you now to ensure that we reduce as much as possible the added burden on applications nearer that date. You can assist us in doing this by following the steps in the mail shot sent to you on Monday 6th March.

Q. How do I calculate the estate value that the fee will be charged upon?

The fee is calculated from the net value of the estate after deducting liabilities or debts from the total of assets and gifts – you can do this using the appropriate Inheritance Tax form.

  • On an Inheritance Tax Summary Online application this figure will be the figure noted in the net estate value box
  • On form IHT 205 the net estate value for fees purposes can be found at Box F
  • On form IHT 207 the net estate value for fees purposes can be found at Box H
  • On form IHT 421 the net estate value for fees purposes can be found at Box 5

Q. What is considered as a full application?

A full application for Probate purposes and therefore to qualify for the appropriate fee is defined as the following. It must include:

  • An full oath sworn by all deponents and commissioners
  • An original will and codicil(where appropriate) endorsed by all commissioners and deponents
  • The appropriate number of correct copy wills an codicils
  • An Inland Revenue account (with the exception of IHT 400’s/421’s where assessment is ongoing and it has been noted on the covering letter that it will follow)
  • All associated documents including any affidavit evidence required at the time of submission, renunciations, Powers of attorneys
  • The appropriate fee.

Upon receipt of an application in this form prior to commencement then the existing fee will be charged.

Settlers and Prelodgements are not considered as full applications and therefore submission of an oath for settling prior to commencement and a subsequent oath after commencement will result in the new fee being applied.

Q: When will the new fees be implemented – at date of death or date of application?

The new fees will apply to all applications received by the probate service on or after the implementation date of the new fees irrespective of the date of death. Any application received within working hours of the Probate Registry before the implementation date will be charged the current fee. Subject to approval of the necessary legislation by Parliament, we expect the new fees to take effect from May 2017, but the exact date will be confirmed nearer the time.

Q Is there to be any equivalent of the IHT instalment option for an asset rich / cash poor estates?

There will not be an instalment option available to pay fees. If the estate does not have enough cash to pay the fee, executors will be able to apply to the Probate Service to access a particular asset for the sole purpose of paying the fee.

Q. How does the new fee affect property held between cohabitating couples?

The law remains the same. Any jointly owned assets (e.g. property held as joint tenants) will not require probate, regardless of whether couples are married, in a civil partnership or neither. All couples are free to choose how they hold their property, and they can change to a joint ownership arrangement via the Land Registry.

Are you a Trust or Company Service Provider under Schedule 23?

UK Emily Deane TEPHMRC has confirmed today that firms that advise their clients on the establishment of offshore companies or trusts may receive pre-Notice letters this month.

The letter requests that advisors come forward and volunteer the following information to HMRC: name and address of the client, the entity details (name, jurisdiction, date of registration) and details of persons with beneficial ownership or interest in the entity. Following the issue of the pre-Notice letters the formal Notices will be issued under Schedule 23 of the UK Finance Act 2011 in February 2017.

STEP and the Law Society of England & Wales have been in protracted talks with HMRC about this issue over the last year. There are concerns about the potential breach of legal professional privilege, access difficulties to the relevant data and the definition of Trust or Company Service Providers (TCSPs).

HMRC has launched this initiative in order to gather information on the beneficial ownership of offshore companies and beneficial interest in offshore partnerships, trusts and other entities from UK-based TCSPs or their overseas subsidiaries. However, the definition of a TCSP in this connection is a little uncertain. The Money Laundering Regulations 2007 (MLR) incorporate the meaning of a TCSP within regulation 3:

’10) “Trust or company service provider” means a firm or sole practitioner who by way of business provides any of the following services to other persons—

(a) forming companies or other legal persons;

(b) acting, or arranging for another person to act—

      (i) as a director or secretary of a company;

      (ii) as a partner of a partnership; or

      (iii) in a similar position in relation to other legal persons;

(c) providing a registered office, business address, correspondence or administrative address or other related services for a company, partnership or any other legal person or arrangement;

(d) acting, or arranging for another person to act, as—

      (i) a trustee of an express trust or similar legal arrangement; or

      (ii) a nominee shareholder for a person other than a company whose securities are listed on a regulated market,

when providing such services.’

We believe that the most likely scenario whereby a UK practitioner will be classed as a TCSP is under section 10(d) when the UK practitioner arranges for another person to set up the entity offshore. It is not entirely clear whether this would  be a formal referral to another firm, involving a transaction fee, or whether an informal recommendation of an offshore firm is sufficient to trigger the classification as a TCSP.

Regulation 6 of the MLR sets out in detail which persons should be treated as though they are beneficial owners for the purpose of Anti-Money Laundering. Those categories are:

  • any individual who is entitled to a specified interest in at least 25 per cent of the capital of the trust property
  • any trust, other than one which is set up or operates entirely for the benefit of individuals, falling within sub-paragraph (a) the class of persons in whose main interest the trust is set up or operates
  • any individual who has control over the trust.

There is a GBP300 penalty for initial non-compliance, followed by daily penalties of up to GBP60 if the non-compliance continues. The TCSP will have 90 days to respond with the requisite information.

We understand that the Notices are only being sent to a select number of firms in February and HMRC has not issued any guidance at this time, therefore please contact if you have any queries.

Emily Deane TEP is STEP Technical Counsel

The UK Client Notification Regulations – what is your obligation?

The UK Client Notification Regulations came into force on 30 September 2016 and the obligation for practitioners to notify any clients with offshore accounts and assets must be met by 31 August 2017.

The objective of the Regulations is to ensure that clients have advance warning that HMRC will soon begin to automatically receive data from over 100 jurisdictions relating to UK tax residents and their offshore accounts, in accordance with the UK’s Automatic Exchange of Information (AEOI) agreements.

Financial institutions that provide offshore advice (‘Specified Financial Institutions’ – SFIs) and practitioners who provide clients with advice or services relating to offshore income or assets (‘Specified Relevant Persons’ – SRPs) that is not disclosed in their clients’ tax returns are required to send each of their clients a Client Notification Letter advising them that their offshore tax information will be shared with HMRC under the Common Reporting Standard (CRS).

The notifications are only applicable to individuals and there is no obligation to notify companies or trusts.

There is a flat-rate penalty of GBP3,000 per SRP or SFI for not complying with the notification requirements.

SRP obligations

HMRC advises that if you are an SRP there are two options that you may wish to consider when identifying the relevant clients:

  1. To notify all of your clients for whom you have not submitted a return, or
  2. To specifically target the clients to whom you have provided offshore advice or services or referred offshore advice or services.

SFI obligations

If you are a financial institution that maintains an offshore account for an individual or have referred clients to a financial institution, wherever located, for the purpose of opening an offshore account you will need to send notifications. The two options in this connection are:

  1. Notify all account holders who have an account balance in excess of USD1 million in the UK, or
  2. Notify all account holders who are tax resident in the UK for whom the SFI maintains a financial account overseas, or who they refer to another financial institution to provide an overseas account.

Further information and guidance on what needs to be included with your notification letter is available here.

The HMRC-branded Client Notification Letter is available here.

We have been informed that the HMRC team will be happy to take queries in this connection at and

See my earlier Blog of 14 September 2016 for further information on the International Tax Compliance (Client Notification) Regulations.

Emily Deane TEP, STEP Technical Counsel

How will Brexit affect the third sector?

Brexit Puzzle Pieces STEP’s Charities UK and Philanthropy Advisors Special Interest Groups hosted a seminar on Charities and Brexit on 6 September presented by STEP members Ed Powles TEP and Tom Dumont TEP and chaired by Suzanne Reisman TEP, writes Emily Deane.

According to those in the charity sector there was an immediate drop in charitable donations after Brexit, but this proved only temporary before it stabilised. However politicians and economists are struggling to gauge what will be different following Brexit. Ed Powles pointed out: ‘If we invoke Article 50 it will be biggest de-merger in history.’

So what are the main points of concern for those who work in the third sector?

Tax reliefs – UK law is vulnerable to significant legislative change following Brexit. EU law currently makes it possible for British citizens to donate to EU charities and claim tax relief. Likewise EU members can donate to the UK and obtain tax relief. European charities can also use UK tax relief in the form of Gift Aid. It seems very unlikely that this regime will continue and that the EU will extend charitable exemptions to the UK after we leave.

EU funding – UK charities receive up to GBP300 million in donations directly from the EU every year, representing a significant contribution towards vulnerable beneficiaries and vital research. It seems highly unlikely that this will continue. There will inevitably be a decrease in grants available through the European Social Fund (ESF) and the European Regional Development Fund (ERDF).

Economic instability – the uncertainty that people are facing in their jobs and personal investments means that they are far less likely to make donations from their disposable income. In addition, charities that depend upon profit from their investments may have major concerns about how the economy will affect them. Having said that, we have survived recessions before and charities have managed to endure.

Legislative change – it is unclear how Brexit will affect charity law. The UK may be compelled to repeal laws that we were obliged to adopt from the EU. Will we modify the European Union Act, and if so, what will we keep and what will we discard? There could be a serious impact on the UK if we re-visit employment, regulatory and data protection laws. Will there be further, onerous due diligence and money laundering requirements imposed upon charities? It seems almost inevitable.

In these pre-Brexit days it is proving very difficult for tax practitioners to advise their clients regarding charitable gifts, cross border gifts and property across Europe. The future seems precarious for the third sector at this stage and the impact over the next few years is relatively uncertain.

John Low CEO of Charities Aid Foundation comments on the future of charities following Brexit, ‘Britain’s culture of charitable giving and the important work of our international charities are hugely significant to how we are viewed by other nations. As Britain starts a new chapter in our approach to international relations, charities must be given the chance to play a leading role.’

STEP is hosting two relevant Special Interest Group events in the next few weeks, with discounted rates of attendance for SIG Members at both:


Emily Deane TEP, STEP Technical Counsel

STEP UK News Digest wrap-up – fourth quarter 2015 top stories


Will disputes and tax matters, often involving property, were at the forefront of our readers’ minds, according to the top ten news items from the UK. Here they are again:

Lost challenge to will costs litigant dearly: A Berkshire woman who lost her legal challenge to her natural father’s will may have to pay legal costs far higher than the amount she was left in the will.

Charities defeat family’s claim for probate of home-made will: Four charities named as Dorothy Whelen’s residuary beneficiaries have defeated a claim that she executed a second home-made will leaving her entire estate to a friend.

UK Autumn Statement may target tax reliefs: Most tax specialists predict it will be harsher than previously expected, for two reasons. First, the Chancellor has failed to push through legislation cutting tax credits for the low-paid, so that the public sector borrowing requirement will be larger than planned at the time that Finance Bill (no.2) 2015 was drafted.

Cash extracted from wound-up firms to be taxed as income: Next year’s Finance Bill will impose an income tax charge on owners of close companies who liquidate the company in order to share out its assets. At the moment, distributions on liquidation and similar events are taxed as capital gains rather than income.

Inheritance tax (‘IHT’) and trusts – tips and traps: Discretionary trusts, whenever created, and most other forms of lifetime trusts (other than bare trusts and qualifying trusts for disabled persons) established on or after 22 March 2006 are subject to what is known as the ‘relevant property’ regime which imposes a charge to IHT on the capital value of the trust assets on each 10 year anniversary of the creation of the trust and ‘exit’ charges when capital is distributed or property otherwise ceases to be relevant property.

Survey says competition leads to lower price of basic wills and estate administration: A survey of 60 will-writers has found that the average price of a standard single will in the UK fell to GBP83 this year, with the average price quoted by law firms and solicitors at GBP118 (falling from GBP124 in the last year).

Judge bars ex-wife from further litigation: An English family court judge has imposed an extended civil restraint order on an ex-wife to stop her bringing further ‘bitter and intense’ litigation against her former spouse.

HMRC waives ‘correct and complete’ declaration for agents’ online IHT returns: Practitioners who submit an online inheritance tax (IHT) return on behalf of a client no longer need to provide a declaration that the information is ‘correct and complete to the best of their knowledge and belief’.

Second home buyers hit with stamp duty surcharge: Yesterday’s Autumn Statement announced that buyers of ‘additional properties’ will be charged an extra 3 per cent rate of stamp duty land tax (SDLT) from next April. The phrase ‘additional properties’ explicitly includes second homes as well as residential lets. The 3 per cent surcharge will be added to the usual SDLT rate for the property’s price band.

Inheritance Tax: main residence nil-rate band and the existing nil-rate band: Individuals with direct descendants who have an estate (including a main residence) with total assets above the Inheritance Tax (IHT) threshold (or nil-rate band) of £325,000 and personal representatives of deceased persons.

The STEP Industry News Digests provide a round-up of relevant industry news for trust and estate practitioners and other professionals in the wealth management sector. They provide brief summaries of topical news stories gathered from news providers internationally, providing a quick reference for busy practitioners to all the relevant news and issues. The News Digests also feature job listings from our recruitment site and list local STEP branch events and conferences. STEP’s digest services include twice weekly UK and Wealth Structuring (international) editions as well as a bi-weekly North America Digest focusing on the US, Canada and Mexico, and a Latin America Digest.

To subscribe to STEP’s digest services you will need to first register here:

Follow @STEPSociety for regular updates.

STEP International News Digest wrap-up – fourth quarter 2015 top stories

Readers of our STEP International News Digests showed a marked interest in the OECD’s Common Reporting Standard (CRS) during the fourth quarter of 2015. In case you missed them, here are the top ten items:

Barclays fined heavily for due diligence failure: The UK’s Financial Conduct Authority (FCA) has fined Barclays Bank GBP72 million for failing to conduct proper due diligence checks on a group of ultra-high-net-worth clients who used the bank to move GBP1.88 billion of funds in 2011 –2012.

UK sets out beneficial ownership register demands on territories: The UK Foreign and Commonwealth Office (FCO) has set out exactly what it requires of its Overseas Territories regarding transparency of company beneficial ownership. The demands stop short of a public central register, but do require that companies or their beneficial owners must not be alerted to the fact that an investigation is under way.

UK professional bodies challenge new benefits charges on non-doms: A group of professional associations have questioned the UK government’s plans for significant reform of the taxation of non-domiciled residents, in particular the ‘dry benefits’ charge to be imposed on settlors of offshore trusts.

CRS by jurisdiction: A jurisdiction-specific overview of the steps taken and choices made by jurisdictions in the context of implementing the Standard. The overview table below will show the current state of implementation of all committed jurisdictions in a single table. In case you would like to have more detailed information about the current state of implementation of the Standard in a particular jurisdiction, you will be able to access jurisdiction-specific legislation by clicking on the green tick relating to that jurisdiction.

BVI to require compulsory register of directors: British Virgin Islands premier Orlando Smith has announced some legislative amendments to improve the BVI authorities’ access to company beneficial ownership information. In a speech to the Assembly on Monday, Smith noted that the BVI, as well as other British Overseas Territories and Crown Dependencies, are under pressure from London to introduce publicly available central registries of the beneficial owners of companies.

Overseas Territories head off UK’s demand for central registers: Britain’s Overseas Territories appear to have successfully resisted the UK’s demands that they set up central registers of company beneficial ownership, directly accessible by the UK authorities.

Have you sorted your LEIs?: The Financial Stability Board is probably the most powerful body nobody has heard of. It was set up by the G20 after the financial crisis and is drawn largely from central bankers. One of the issues it has focused on is effective monitoring of counterparty risk in financial markets.

CRS-related FAQs (pdf): The OECD has published a summary of 41 jurisdictions’ position regarding the Common Reporting Standard (CRS) for automatic exchange of financial information. It has also issued an updated list of CRS-related frequently asked questions, including one concerning the time allowed to verify a self-certification.

Automatic Exchange: The Automatic Exchange of Information (AEOI) portal provides a comprehensive overview of the work the OECD and the Global Forum on Transparency and Exchange of Information for Tax Purposes in the area of the automatic exchange of information, in particular with respect to the Common Reporting Standard.

Russian Federal Tax Service publishes draft blacklist of states that do not exchange information with Russia (pdf): On October 23, 2015 the Russian Federal Tax Service published on the official web-site for information disclosure ( the first list of states and territories that do not exchange information for tax purposes with Russia or information exchange with which did not meet Russia’s expectations (the “blacklist”). The blacklist may become effective from January 1, 2016.


The STEP Industry News Digests provide a round-up of relevant industry news for trust and estate practitioners and other professionals in the wealth management sector. They provide brief summaries of topical news stories gathered from news providers internationally, providing a quick reference for busy practitioners to all the relevant news and issues. The News Digests also feature job listings from our recruitment site and list local STEP branch events and conferences. STEP’s digest services include twice weekly UK and Wealth Structuring (international) editions as well as a bi-weekly North America Digest focusing on the US, Canada and Mexico, and a Latin America Digest.

To subscribe to STEP’s digest services you will need to first register here:

Follow @STEPSociety for regular updates.

Quantum of Success

Richard FrimstonI used to understand the Succession Regulation, but now I am not so sure.

The EU Commission put together an excellent conference in Brussels on 19 November, on the subject, which many STEP members attended.

Although several interesting individual topics were covered, the overriding impression I obtained was that we are all still looking at the Regulation through the prism of our own individual national systems. Not all of us have quite made the mental leap that the Regulation introduced a new system that is supra national.

The most contentious debate probably related to the legal effects of the Succession Certificate (ECS). Does it really replace local certificates? France may be concerned as to the fact that an ECS is not an Acte Authentique, while Germany worries as to the preservation of the purity of its Land and other Registers.

If a notary is not acting as a ‘Court’, are notaries subject to the jurisdictional limits of the Regulation? Who is asking?

The Italian perspective was expressed in the view that a professio juris of the national law might not be effective, if it coincided with the current habitual residence. Everyone else disagreed.

Many differing opinions were expressed, but the only real conclusion was that we are all feeling our way in territory that has never been explored before. We need to keep talking to professionals and advisors in other jurisdictions and try to discuss these matters with as few preconceptions as possible.

As ever, the real benefit of the conference was the opportunity to spend time meeting others from different Member States, and discussing the problems of international succession. We all shared a common interest in trying to find solutions to the problems faced by EU citizens attempting to plan their succession.

Clients and advisors like certainty. Helping everyone understand that it does not exist, and finding the best route through, has always been the unhappy job of the quantum mechanic.

  • EU Regulation on Succession and WillsFor more analysis of the Regulation see EU Regulation on Succession and Wills, Commentary by: Ulf Bergquist, Domenico Damascelli, Richard Frimston, Paul Lagarde, Felix Odersky, Barbara Reinhartz. STEP members receive a 20% discount: (log in).

Richard Frimston, Partner, Russell-Cooke, London

Have you sorted your LEIs?

George HodgsonThe Financial Stability Board is probably the most powerful body nobody has heard of. It was set up by the G20 after the financial crisis and is drawn largely from central bankers. One of the issues it has focused on is effective monitoring of counterparty risk in financial markets. In a process most bureaucrats will recognise, the Financial Stability Board (FSB) therefore spawned the Regulatory Oversight Group (ROC), which decided that what the world needed was better identification of the legal entities which are counterparties to transactions on financial markets, so it in turn spawned the Global Legal Entity Identity Foundation (GLEIF) based in Switzerland.

The GLEIF has designed a system where every ‘legal entity’ will need to register and obtain a unique identification number – a Legal Entity Identifier (LEI) before it can trade on financial markets. Crucially, to the dismay of the purists, in the world of GLEIF, ‘legal entities’ appears to include trusts.

Acquiring an LEI will of course involve a fee (in the UK around GBP100), and it will need renewing annually (a further fee, of course), but the real challenge is that the body which issues the LEI (which in the UK will be the London Stock Exchange) will need to validate the details of everyone it issues an LEI to against various public sources. If it can’t validate the details, then it can’t issue an LEI, and the entity can’t trade in financial markets, even when it’s acting through a third party such as a fund manager or broker.

This all works for corporate entities, but what about trusts? Trusts generally do not have publicly available information against which their application for an LEI can be validated. With the current plan, therefore, they will not be able to get an LEI.

To be fair, the London Stock Exchange acknowledges the problem and has looked for guidance to its own regulator, the Financial Conduct Authority. The regulator, however, seems to be disinclined to get in the way of the GLEIF, ROC or FSB.

LEIs are already being issued but the new regulations will come into force in January 2017, and after that date an LEI will be required by all investors in financial markets. We therefore seem to be heading for a situation in which, apparently by accident, trusts – one of the commonest ways of holding family wealth in the common-law world – are effectively locked out of participation in financial markets.

Some might call this a bit of a mess, but the American term of SNAFU might be nearer the mark. We can, however, only see if over the coming months some common sense can be brought into the process.

George Hodgson, Deputy Chief Executive, STEP

Lord Lucan is presumed dead, but what about other missing people?

empty armchair
Lord Lucan has been back in the news, with his son’s bid to inherit the title from his father, who disappeared in 1974 after the family nanny was found murdered.

But it throws into sharp focus the plight of around 30 – 40 families a year who lose a family member but are unable to prove a death.

The Presumption of Death Act 2013, which came into force in England and Wales in October 2014, much improved their position. Under the new law, which was passed after a lengthy campaign from the charity Missing People, families can apply for a Certificate of Presumed Death, which acts like a death certificate and means the estate can be administered.

However, many legal professionals are unfamiliar with the new law, and Missing People is actively campaigning to get it better known.

“Although the law helps families resolve their loved one’s affairs, making the decision to apply for a Declaration of Presumed Death is a difficult, daunting and emotional one,” said Susannah Drury, Director of Policy, Research and Development at Missing People, “The process is currently made all the more challenging as we know that there is a shortage of legal and financial professionals who are familiar with the new legislation.”

Sarah Young, Partner at Ridley and Hall Legal Limited, in Huddersfield, has used the Act a number of times and has more cases underway. “It’s working well,” she says, “It’s great that we now have this Act as it has raised public awareness that someone can be legally presumed to have died. The Act is also very useful in that it can dissolve a marriage or a civil partnership. Previously a separate application had to be made.”

She acknowledges, though, that even some legal professionals are not aware of the Act and have still been advising people they need to wait seven years. The fact that the Act refers to the old seven year rule does not help, she says.

The cost is also expensive for many people. Apart from the £480 fee, they have to place an ad in the local paper, which can easily be £200. They also find that placing an ad, and the requirement to send copies of court papers to any relative are a breach of their privacy, and can be problematic if family members don’t get on well or haven’t been in touch. “I suppose it is important as if it was private it could be concealing something dodgy,” she concedes, “but the families don’t much like it.”

Missing People’s Susannah Drury cites the case of one family whose suicidal 20 year old son with Asperger’s Syndrome disappeared in 2012. While he was witnessed jumping from the Humber Bridge, and had left suicide notes, no body was found, and the family decided to pursue a Certificate of Presumed Death.

The young man’s mother found she had to manage the application on her own after finding local law firms unfamiliar with the process. While it was ‘bittersweet’ when the judge granted a Presumption of Death certificate, the family was finally able to deal with such practicalities as closing accounts and stopping letters addressed to him.

Rita Bhargava TEP, a partner at Russell-Cooke Solicitors in London, notes how important this is for families. “While the Act cannot address the trauma and emotional struggles caused by the disappearance of a loved one, it will finally allow the family to deal with their loved one’s estate, giving them some closure,” she says.

Missing People has published information for professionals working with families on a missing person’s financial or legal affairs:

Joanna Pegum, STEP PR & Media Executive

Money laundering and ‘The Red Tape Challenge’

George HodgsonMost STEP members, almost wherever they are based, would probably agree that we are facing a real risk of bureaucratic meltdown. Practitioners have only just negotiated the joys of the US Foreign Account Tax Compliance Act, FATCA, but they must now focus on the Common Reporting Standard, CRS (not forgetting the UK/Crown Dependencies and Overseas Territories inter-governmental agreements). At the same time, many jurisdictions are now beefing up their anti-money laundering (AML) regimes in the wake of the revisions to the Financial Action Task Force international AML standards, with Europe now working on implementing the 4th AML Directive.

On top of all that, many STEP members will also need to think about the new European Markets in Financial Instruments Directive and the additional burdens that will place on investors in terms of registering and reporting.

In this environment STEP practitioners will probably welcome the announcement that the UK government, philosophically committed to cutting regulation and bureaucracy, has launched a so-called ‘Red Tape Challenge’ to see if there is any unnecessary bureaucracy in the AML area. This informal consultation closes on 23 October.

STEP has already made a short submission based on feedback we have received from members (see more). Our submission focuses first on the problems faced by those who don’t fit the normal tick boxes many financial institutions now use for AML checks.

Second, we highlight the growing difficulty many STEP members report in doing business with financial institutions as they switch to a much more risk averse approach.

Finally, we highlight the absurdity that practitioners in the UK now find themselves having to struggle with three different new reporting processes (FATCA/CRS, the Corporate Register of Persons with Significant Control and the Legal Entity Identifier registration process under MiFIR, the Markets in Financial Instruments Regulation). These are all broadly focused on tracking beneficial ownership, but coming through with no attempt at coordination, or to share either the administrative burden or cost.

Of course given that many of the problems we have identified flow from initiatives launched by the current UK administration, it may be politically difficult for the current government to change tack.

Nonetheless, if STEP members want to make their own submissions to the current consultation process, that may add to the pressure for a government philosophically committed to cutting the regulatory burden on business to examine if there any easier ways of achieving its AML policy objectives than those currently on the table.

George Hodgson, Deputy Chief Executive, STEP