UK Ministry of Justice enacts video-witnessing of wills

Gavel And A Last Will And Testament

The UK Ministry of Justice (MoJ) has today announced the implementation of secondary legislation under the Electronic Communications Act 2000 that can be applied retrospectively to the beginning of the COVID-19 pandemic on 31 January. The new legislation, which only applies in England and Wales, enables individuals to video-witness the execution of their wills if they are unable to observe the normal formalities, and cannot have two independent witnesses present. Therefore if someone is isolating and there is no feasible way to arrange for witnesses to be there, they can video record themselves executing their own will and it will be legally valid.

The fight against COVID-19 has made the will writing process even more complicated with social distancing and self-isolation throwing up some difficulties for people looking to get their will written. It has been possible to speak to a will writer over the phone or via video conference in order to draft a will; however, to be valid, a will must be signed by two witnesses present at the same time. The witnesses must be independent and cannot be beneficiaries of the will or related to the person that the will applies to.  For some, it may have been possible to enlist neighbours and arrange a situation where all are able to see each other while maintaining the requisite distance, but for others, for example vulnerable people, or people confined to bed or in hospital, this has not been possible.

STEP has been in discussion with the MoJ since the lockdown was enforced and has welcomed the introduction of video conference witnessing of wills, which removes the need for any physical witnesses at all. Of course, not everyone has access to laptops or mobile phones with video facilities, which would exclude a small part of the population, but it can work for the majority. Whilst the government has maintained the current law, it has effectively been condoning gatherings of at least three people from two of more households, and has been putting people at risk of catching or spreading the virus.

We are delighted that the government has responded to our calls to allow will witnessing by video facility. By removing the need for any physical witnesses, wills can continue to be drawn up efficiently, effectively and safely by those isolating. We also endorse the move to apply this retrospectively, which will provide reassurance to anyone who has had no choice but to execute a will in this manner prior to this legislation being enacted.  The legislation is anticipated to come into force in September 2020 and will be in force for two years until 31 January 2022. Practitioners should be aware of the sunset clause and make sure that any remote execution takes place prior to the expiry of the legislation.

STEP has prepared some guidance for members, with thanks to our working group comprising Paul Saunders TEP, Jennie Pratt TEP, Amanda Simmonds TEP, Leigh Sagar TEP, Charlotte John TEP, Charlie Tee TEP and Laura Kermally TEP.  However we are keen to reinforce that the new remote method of witnessing should not be a substitute for the conventional method of physical witnesses. The remote method should only be used in an emergency when conventional witnessing is impossible and extreme caution is required when taking this course of action.

Emily Deane TEP, STEP Technical Counsel

HMCTS announces interim operational arrangements

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

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

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

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

If you have any feedback on the FAQs please send your comments to [email protected].

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 [email protected] 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

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).

The Gift Aid tax gap

Emily Deane TEPSTEP is working with HMRC on a Gift Aid working group set up to explore options to maximise the amount of Gift Aid that charities can claim on donations, together with ways of increasing customer understanding of the system and how it works. HMRC is also investigating opportunities to improve the way that Higher Rate Relief is claimed; and whether it works as intended, is future-proof and provides the relief in the best way possible.

HMRC began the process by instructing an external research company to look into charitable giving and the use of Gift Aid. Its specific objectives were to estimate the value of the Gift Aid tax gap and unclaimed Gift Aid, and develop an understanding of correct and incorrect behaviours among donors.

The report has found that 25 per cent of the value of donations made in the 12 months prior to interview did not have Gift Aid added to them where the donor was eligible, contributing up to GBP560 million to the value of unclaimed Gift Aid. This represents potential missed income for charities and is generated by eligible donors who only sometimes (30 per cent), or never (18 per cent), add Gift Aid to their donations. It is mostly driven by a lack of opportunity for donors to add Gift Aid, and to a lesser degree, by failing to understand what Gift Aid is, or where they are eligible to add it.

The report also finds that 8 per cent of the value of donations had Gift Aid incorrectly added to them by ineligible donors, generating a Gift Aid tax gap of up to GBP180 million. This is caused by ineligible donors who always (5 per cent) or sometimes (10 per cent) add Gift Aid, partly where they do not understand the relief, and partly where they misunderstand what it means to be a taxpayer. This has resulted in donors who are not taxpayers attempting to add Gift Aid, where they are not eligible to do so.

Better understanding of these issues would lead to a drop in Gift Aid claims among ineligible donors, and a rise in claims among eligible donors. It was recommended to provide information about (1) Gift Aid eligibility criteria (ie clarifying what it means to be a UK taxpayer, and that the donor must be one to add Gift Aid to their donation) at every opportunity, and (2) the benefits of Gift Aid at the point of donation; to help effect the change.

The report, Charitable giving and Gift Aid research, is published today, accompanied by a press release issued by HM Treasury and HMRC.

If you have any questions or suggestions please email STEP’s Technical Counsel – [email protected].

Emily Deane TEP is STEP Technical Counsel

Improving HMRC guidance on Gift Aid donor benefits

STEP has been invited to join an HMRC Working Group which will review the guidance on Gift Aid donor benefits. The Working Group will review the interpretation of the rules that apply to donor benefits within the HMRC guidance covered by Chapters 3.18 to 3.25.

Objectives

Representatives have been selected from the charity sector, HMRC and HMT and the group held its first meeting hosted by HMRC last week. The group has initially identified the need to include the valuation of certain benefits for application of the relevant value test; the meaning of the ‘in consequence’ rule; and the correct application of the split payment rule.

The objective of the working group is not to amend the legislation or policy but simply to clarify and improve the guidance. HMRC has confirmed that proposed changes to the guidance cannot extend, override or supplement any statutory provisions.

HMRC is keen to mitigate the confusion and litigation that can ensue when the guidance is misinterpreted by charities and donors, for example, when gift aid contributions are misunderstood from the donor’s perspective which can lead to HMRC demanding large refunds. The overriding objective of the working group is to enhance the guidance to make it work as efficiently as possible and promote best practice within the sector.

Tell us your views

We would like to invite STEP members to provide examples of how the guidance could be improved in order to clarify interpretation of the existing legislation. You may wish to provide examples of how the guidance can be misinterpreted or, alternatively, mark up the guidance to show suggested changes.

Outcome

Once HMRC has collected the proposed changes from the working group representatives they will refer the guidance to HMRC’s solicitors for review prior to publication. The estimated date for publication is early 2019.

We would very much value your input. Please send your feedback to  [email protected] by 15 November 2017.

Emily Deane TEP is STEP Technical Counsel

Foreign domiciliaries – what next?

UK passport

Early in July, the UK government offered some clarity about what will happen to its proposed changes to foreign domiciliaries, which were dropped from the Finance (No.2) Bill 2017 in the rush to pass legislation prior to this year’s general election.

Following the election and the Queen’s Speech, a Ministerial Statement announced that, after the summer recess, everything that did not make it into the eventual Finance Act 2017 would be reintroduced in a second Finance Bill 2017.

Briefly, the main changes are:

  • If a person is born in the UK with a UK domicile of origin, and is resident in the UK during a tax year, he or she will be considered to be domiciled in the UK for all tax purposes.
  • Anyone who has been resident in the UK for at least 15 of the previous 20 tax years will be judged to be a long-term resident and domiciled in the UK for all of his/her tax purposes.
  • Inheritance tax will be extended to cover:
    • any UK residential property owned by foreign domiciliaries via a non-UK company or partnership;
    • any UK trust settled by foreign domiciliaries via a non-UK company or partnership; and
    • a loan, if the funds are used for the acquisition, maintenance or enhancement of an interest in UK residential property, as well as the collateral on such a loan.

Reliefs and protections

In addition, the government plans to introduce several accompanying reliefs and protections, including:

  • Capital gains tax (CGT) rebasing relief on assets held directly by individuals applying to income gains from non-reporting funds, as well as on capital gains on foreign assets.
  • A cleansing relief for individuals who have been remittance basis users in at least one tax year between 2008/2009 and 2016/2017 with mixed-fund bank accounts. This measure excludes formerly domiciled residents.
  • The protection of settlor-interested trusts, as long as the settlor is a long-term resident of the UK, through the continued disapplication of the capital gains tax anti-avoidance provision that would otherwise have levied a charge on the trust’s foreign income.
  • A small number of relaxations to Business Investment Relief.

The government has stated that there are no plans to alter the implementation dates of any of the measures. If they are passed, they will represent the most significant set of changes to the rules regarding foreign domiciliaries since 2008.

Time scales

Given that Parliament does not return until 5 September, rising on 14 September for the party conference season, it is unlikely that MPs will be able to properly debate the second Finance Bill 2017 before October. If so, the legislation would likely receive Royal Assent in late November – at the earliest.

Given the limited time MPs will have to debate and pass the Bill, and the important changes it will bring, STEP will carefully monitor developments as they happen, and provide updates on the legislation’s progress.

Daniel Nesbitt, Policy Executive, STEP 

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

A_very_small_house

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: www.step.org/register.

Follow @STEPSociety for regular updates.

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

transparency
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 (regulation.gov.ru/) 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: www.step.org/register.

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: www.step.org/discounted-books (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