Guidance Notes

Guidance and briefing notes for members on a range of subjects, from FATCA to trustee exemption clauses.


Guidance Notes

NB: While these Guidance Notes do not form part of STEP's Codes of Conduct, STEP may have regard to them when exercising its disciplinary functions.

Access and disclosure of an incapacitated person’s will (E&W)

Published jointly by the SRA, Legal Services Ombudsman, The Law Society of England & Wales and STEP, this guidance note clarifies when a solicitor can disclose a copy of a client’s will to a property and financial affairs attorney or deputy appointed by the Court of Protection, in circumstances where the client has lost mental capacity. The guidance provides that, unless the donor has expressly said that the will should not be disclosed, or the solicitor has reason to believe that the attorney has not acted (or is/will not be acting) in the donor’s best interests, the will is the property of the donor, and a copy can be released.

England and Wales Practice Rule to Trustee Exemption Clauses

These guidance notes have been produced, following discussions with the Law Commission. They protect the public by formalising what is accepted best practice among STEP members. STEP’s Practice Rule results from close involvement with the Law Commission’s consultation on exemption clauses.

HMRC guidance: Trust Registration Service (TRS) FAQs

This guidance was issued by HMRC on 9 October 2017 to address STEP member queries about the UK Trust Registration Service. It was subsequently updated on 22 November 2017 to reflect a revised position in relation to the use of a 'class' to describe the beneficiaries of a trust. The revisions mean that individual beneficiaries do not need to be identified until they receive a distribution from the trust, and beneficiaries who will only potentially benefit from the trust upon a contingent event happening will only need to be identified once that event has occurred.

Information on penalties can be found here:

Indirectly owned UK residential property and TRS

Please also find below correspondence between STEP and HMRC seeking clarification regarding indirectly owned UK residential property and the Trust Registration Service. One particular section to note in HMRC’s response is the following (Paragraph 2):

'In light of this we accept the legal arguments you have set out in your letter and require non-UK trusts that incur IHT as a result of schedule A1 not to register on TRS on the basis that no other UK tax is due by the trustees in relation to trust assets or income.'

EU General Data Protection Regulation (GDPR)

The purpose of this memorandum is to summarise STEP’s current understanding of how certain aspects of the GDPR should be applied in the context of private, non-charitable, trusts and estates.

Briefing Notes and Practitioner Guides

NB: These documents have been produced to assist members in various area or provide clarification on aspects of legislation. They are not intended to be directional in nature, but informative.


Common Reporting Standard

CRS and Trusts - March 2017: This note intends to provide a current summary of issues of concern in the context of how CRS is intended to apply to trusts, persons connected with trusts and trust assets. It has been prepared by STEP following discussions with the OECD Secretariat and HMRC and sets out STEP’s understanding of the application of the Common Reporting Standard to the circumstances set out below with a view to highlighting points of uncertainty in the reporting framework. 

February 2016: The OECD released a CRS implementation handbook in August 2015, designed to assist government officials in the implementation of the CRS. It provides guidance on the application of CRS generally with some detailed commentary with specific reference to trusts. STEP subsequently met the OECD Secretariat team responsible for the guidance in order to clarify a number of points of information. As a result, we prepared this summary of our dialogue. While this cannot be viewed as official OECD guidance (and we understand there will be future answers to FAQs and updates to the Handbook) we nevertheless thought it would be helpful to members to share these notes.

Digital Assets Practitioner Guides

With digital assets having become important to many areas of our clients’ lives, estate planning now needs to include plans for what happens to our clients’ digital assets on death or incapacity. The Digital Assets Working Group have created a set of practitioner guides to digital assets. The guides have been prepared to assist practitioners with the issue of digital assets when taking instructions from clients for estate planning or estate administration.

EU Succession Regulation, No. 650/2012

Richard Frimston TEP, Partner at Russell Cooke and Chair of STEP's EU Committee has produced FAQs and some examples to help practitioners with the application of the EU Succession Regulation, and to correct some misunderstandings that have arisen.


FATCA recalcitrant entity account reporting - February 2017

UK HMRC has confirmed the position for FATCA reporting where a Financial Institution (FI) has been unable to get a self-certification in respect of a new entity account. This only applies to new entity account reporting for FATCA.

Trusts under a Model 1 Intergovernmental Agreement – general guide

STEP has provided this general guide to assist practitioners in Model 1 jurisdictions that have not yet published their own guidance. Where a local tax authority has produced guidance, this should be consulted in preference. Although the Model 1 IGA is intended to provide a standard template, some jurisdictions have indicated that they are going to implement it in different ways (Canada is, so far, the most notable example of a jurisdiction adopting an approach different to that taken by others). This guide, however, is based upon what we understand to be the consensus approach being taken to FATCA implementation in most Model 1 jurisdictions. 

UK trusts under the UK-US Intergovernmental Agreement

STEP, ICAEW and the Law Society of England and Wales have produced the following guide, flowchart and practical examples on the status of UK trusts under the UK-US IGA.


Payment Protection Insurance (PPI)

A member of STEP's UK Practice Committee has raised concern that claims management companies may begin pursuing fiduciaries based on the argument that they and their advisors would have been expected to investigate whether estates were entitled to compensation. A briefing note outlining the potential issue and informing members of the action they may wish to take has been prepared.   

Business Property Relief and complex holding company structures (UK)

In correspondence between STEP UK Technical Committee member Emma Chamberlain TEP and HMRC in 2015, the technical division helpfully clarified a few queries in relation to groups and intra group activities such as loans. The correspondence also clarifies the wholly or mainly test in relation to groups. The correspondence is attached below. HMRC confirmed in 2017 that their views remained the same as in the correspondence.  

Clarification on certain aspects of the draft UK legislation on the taxation of non-domiciliaries and offshore trusts

The draft legislation published on 5 December 2016 and 26 January 2017 for consultation relating to the changes to the taxation of non-domiciliaries and offshore trusts is extremely complex and leaves a number of areas of uncertainty, many of which have been highlighted in the formal responses that STEP's UK Technical Committee has submitted to HMRC. These have all been collated in a Briefing Note for members' information.

Criminal Finances Act 2017 - 'Failure to prevent the criminal facilitation of tax evasion'

The UK Criminal Finances Act 2017 introduced two new criminal offences. The ‘failure to prevent the criminal facilitation of tax evasion’ holds corporations and partnerships liable if they fail to prevent individuals acting on their behalf from criminally facilitating tax evasion. If individuals acting on behalf of an organisation criminally facilitate tax evasion, then the organisation is automatically liable for having failed to prevent this, unless it can make a defence that it had reasonable procedures in place to have prevented this. The offences commenced on 30 September 2017 and relate to both UK tax and overseas taxes. This Briefing Note provides a summary of the new offences.

EU General Data Protection Regulation (GDPR)

Since 25 May 2018, UK organisations processing personal data have been required to comply with the EU General Data Protection Regulation (GDPR). This updated briefing note provides you with an overview of the legislation, highlights the core changes to UK data protection and gives some general assistance.

Finance (No.2) Act 2017: Professional bodies Q&A

Questions and draft suggested answers have been prepared by committee members of ICAEW, STEP, CIOT, and the Law Society of England & Wales to highlight and consider areas of uncertainty in the statutory provisions for:

as introduced by Finance Act (No 2) Act 2017 with effect from 6 April 2017. The questions and the draft suggested answers have been sent to HMRC for comment.

Finance Act 2018: Notes on practical points and areas of uncertainty

These notes have been prepared by committee members of STEP, ICAEW, the CIOT and the Law Society to highlight practical issues and uncertainties raised by Finance Act 2018,  and Schedule 10 (anti–avoidance, etc.):

Instruments of variation

This STEP Briefing Note, written by Paul Saunders on behalf of STEP's UK Practice Committee, looks into issues around instruments of variation, including gifts, beneficiaries' income rights, and variations involving trusts.

Money Laundering Regulations 2017 overview (UK)

The Money Laundering Regulations 2017 implement the UK’s obligations under the EU Fourth Money Laundering Directive 2015/849 (4AMLD) to introduce a UK trust register. This briefing note, written by STEP Technical Counsel Emily Deane, provides an overview of the new reporting requirements.

STEP Model Clause IHT (UK)

Following the entry into force of the UK Finance Act 2012 we set out below a model clause that can be used by persons wishing to leave a legacy qualifying for the reduced rate of inheritance tax to 36 per cent where 10 per cent or more of an estate is left to charity on death. The Finance Act 2012, Schedule 33, inserts a new Schedule 1A into the Inheritance Tax Act 1984 making provision for the new relief. The clause set out below is based on the draft clause submitted to HMRC in the course of the consultation process leading to the finalisation of the legislation.

Perpetuities and Accumulations Act 2009 (UK)

The UK Perpetuities and Accumulations Act 2009 came into force on 6 April 2010. It simplified the rules against perpetuities and accumulations of income and made drafting wills and trusts easier. Ruth Hughes has written the following Briefing Note explaining the Act.

Reforms to the taxation of non-domiciles: trust protections (UK)

In the Summer Budget 2015 the UK government announced a series of reforms to the tax rules for people who are not domiciled in the UK. This topic has been explored further via a follow up consultation in 2016. The changes are intended for the 2017 Finance Bill. This paper, drafted by STEP's UK Technical Committee in September 2016, sets out a potential alternative approach to legislating the trust protections.

Requirement to Correct

The UK Finance (No 2) Bill 2017 introduced a new ‘Requirement to Correct’ obligation, which requires taxpayers with any existing non-compliance relating to offshore issues to correct the situation before 30 September 2018.  This is a one-year opportunity before those in this position become liable to more severe penalties for non-compliance. It applies to any taxpayer (including individuals, companies, and trusts) and applies to income tax, inheritance tax and capital gains tax. 

Settled Land Act (UK)

The ability to create a new trust under the Settled Land Act 1925 (SLA) ceased on 31 December 1996. However, many SLA trusts continue to exist. Paul Saunders TEP on behalf of the STEP UK Practice Committee has written the following briefing notes to explain what happens to the land when the (last) tenant for life dies (see part one); sale of land by the tenant for life; investment powers of the tenant for life and the SLA trustees; the purchase and/or exchange of land; the rights to a grant on the death of the tenant for life; tenant for life powers of delegation; legal capacity and other miscellaneous points.

Statutory Residence Test (UK)

STEP UK Technical Committee has drawn up the following briefing note to clarify the rules on temporary non-residence. 

Trustee residence: revised guidance

STEP, the ICAEW Tax Faculty and CIOT have issued revised guidance on trustee residence to replaces TAXGUIDE 3/10.

Trusts (Capital and Income) Act 2013 (UK)

STEP’s UK Practice Committee has drawn up the following guidance note to explain the impact of the Trusts (Capital and Income) Act 2013 on practitioners.

Trusts - 50% income tax rate (UK)

With effect from 6 April 2010 the UK Finance Act 2009 increased the trust rate to 50% from 40% and the dividend trust rate from 32.5% to 42.5%. This STEP briefing note looks at the implications for practitioners. 

England & Wales

Lasting Powers of Attorney and Deputyship Guidelines (E&W)

Dealing with a person’s property and investing their money – a guide for Attorneys and Deputies in England and Wales.

Appropriations (England and Wales)

This STEP Briefing Note, written by Paul Saunders and Jo Summers on behalf of STEP’s UK Practice Committee, gives practitioners background information on what appropriations are, how to make one when administering a trust or estate and some of the common challenges they may encounter in doing so.

Property holding by trustees in England and Wales

This consolidated series on property holding by trustees in England and Wales was written, on behalf of the STEP UK Practice Committee, by:

  • Paul Saunders FCIB TEP, Independent Trust Consultant, STEP UK Practice Committee
  • Katherine Rose (MARLA), LSL Corporate Client Department
  • Sian Pinheiro-Torres (MARLA), LSL Corporate Client Department

The law is that applicable as at 30 June 2017.

Personal representatives and trustees - genealogists fees

This STEP Briefing Note sets out some issues to consider when a personal representative hires a genealogist to find heirs. 

Removing a trustee who no longer has capacity

Where a trustee lacks capacity, it can be problematic. Often, the solutions can seem complex, but a structured approach will help. Sir Alex Elphinston TEP, member of STEP's Mental Capacity Special Interest Group Steering Committee, provides this guidance, comprising a flowchart of the main procedures that need to be followed.

Revocation of an Enduring and Lasting Power of Attorney by a donor

This Briefing Note from Caroline Bielanska, a member of STEP's Mental Capacity Special Interest Group, considers how and when an Enduring or Lasting Power of Attorney can be revoked.

Safeguarding provisions in lasting powers of attorney (England and Wales)

Lasting Powers of Attorney (LPAs) are easy to make and, particularly in the case of a property and financial affairs LPA, unfortunately easy to abuse. Simply advising a donor to choose an attorney who is trustworthy, is not sufficient. This guidance and enclosed template for advance consent, prepared by Caroline Bielanska TEP, can be used by practitioners for their clients.

STEP Briefing Note: Our safeguarding vulnerable clients’ policy (England and Wales) 

This briefing note was prepared by Caroline Bielanska TEP, who gives permission for its use