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ISCUSSION What do you think?



STEP has made a submission to the UK Treasury regarding the draft Foreign Account Tax Compliance Act guidance and legislation issued by the UK government on 18 December 2012.

The submission focuses on the position of trusts under the UK-US intergovernmental agreement (IGA) and highlights four key areas where trustees working to ensure that the trusts for which they are responsible are IGA-compliant need further information and guidance as a matter of priority. The position of trusts under the UK-US IGA is of worldwide signifi cance as it is likely that this agreement will act as a blueprint for how trusts are to be treated under all subsequent FATCA IGAs between the US and other jurisdictions. STEP argues that the regulations and guidance need to be as clear as possible

to minimise the risk of inadvertent non-compliance. The draft regulations and guidance in their current form are said to be inadequate in relation to the treatment of trusts and trustees. The regulations categorise trusts

by reference to the nature of their trustees and the nature of the third- party service providers they engage, which STEP says will result in large numbers of UK resident trusts being categorised as fi nancial institutions and so being burdened by signifi cant and unnecessary compliance costs. The reporting requirements and associated guidance suggested for trusts have been designed for institutions primarily holding fi nancial assets. Given that trusts often hold signifi cant non- fi nancial assets such as real property or chattels, the regulations risk imposing


ON 21 FEBRUARY 2013 the fi rst meeting of the Trustee Managed Portfolio Indices (TMPI) Practitioner Group took place at the offi ces of STEP. The purpose of this meeting was to set the terms under which the group would operate, its areas of interest and its responsibilities, as well as the terms of operation of the TMPI. The meeting started with

a welcome from the Chair and a note of thanks to all the committee members who were willing to give their time to assist in the operation of the free service. The purpose and remit of the group was confi rmed, with a particular note that the committee is

8 APRIL 2013

to focus its eff orts to ensure that the interests of members are served at all times, paying specifi c attention to the reputation, operation and pertinence of the indices, their uses and future developments. Additionally, group members

would seek the views of other practitioners and make known any relevant issues that may require attention to ensure that members are able to use the indices as part of their overall toolkit and to ensure that they aid practitioners in serving their clients’ interests. Any comments on or questions about the TMPI should be directed to Russell Bussey at

costly annual valuation requirements on trustees, which will add little to the more readily available information on distributions from the trust. STEP liaised with the American

College of Trust and Estate Counsel and the Institute of Chartered Accountants in England and Wales over this submission. To see the full FATCA submission and all of STEP’s other consultation responses, visit the STEP Consultation Tracker


ESTATES SIG LAUNCHED STEP has launched a new special interest group focusing on contentious trusts and estates. The risk of trustees becoming involved in court proceedings appears to be increasing, with cases such as Thyssen, Grupo Torras and Alhamrani suggesting that such proceedings are increasingly hostile and hard- fought. Possible explanations include poor investment performance, the growing blame culture and a perception that trustees have deep pockets and are a soft target for a plaintiff Bar that’s hungry for work. The STEP Contentious Trusts and Estates Special

Interest Group has been set up to provide a forum for sharing international trust and estate jurisprudence; to facilitate networking and to provide a forum for training and education among individuals with an interest in this area; to marshal expertise and promote best practice (including the use of alternative dispute resolution); and to help non-contentious practitioners avoid pitfalls encountered in trust and estate litigation. Visit to fi nd out more and subscribe to the group.


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