Private Client and Charities

In a nutshell

You have money. You need to know how best to control it, preserve it and pass it on: enter the private client lawyer. Solicitors advise individuals, families and trusts on wealth management. Some offer additional matrimonial and small-scale commercial assistance, others focus exclusively on highly specialised tax and trusts issues, or operate predominantly in wills and probate.

Charity lawyers advise on all aspects of the activities of non-profit organisations, including the defence of legacies bequeathed to a charity in a will. These specialists need exactly the same skills and knowledge as private client lawyers, but must also have the same kind of commercial knowledge as corporate lawyers.

What lawyers do

 

Private client lawyers 

  • Draft wills in consultation with clients and facilitate their implementation after death. Probate involves the appointment of an executor and the settling of an estate. Organising a house clearance or even a funeral is not outside the scope of a lawyer's duties.
  • Advise clients on the most tax-efficient and appropriate structure for holding money and assets. Lawyers must ensure their clients understand the foreign law implications of trusts held in offshore jurisdictions.
  • Advise overseas clients interested in investing in the UK and banks whose overseas clients have UK interests.
  • Assist clients with the very specific licensing, sales arrangements and tax planning issues related to ownership of heritage chattels (individual items or collections of cultural value or significance).
  • Bring or defend litigation in relation to disputed legacies.

Charities lawyers

  • Advise charities on registration, reorganisation, regulatory compliance and the implications of new legislation.
  • Offer specialist trusts and investment advice.
  • Advise on quasi-corporate and mainstream commercial matters, negotiate and draft contracts for sponsorship and the development of trading subsidiaries, manage property issues and handle IP concerns.

Realities of the job

  • An interest in other people’s affairs is going to help. A capacity for empathy coupled with impartiality and absolute discretion are the hallmarks of a good private client lawyer. You’ll need to be able to relate to and earn the trust of your many varied clients.
  • Despite not being as chaotic as other fields, the technical demands of private client work can be exacting and an academic streak goes a long way.
  • A great deal of private client work is tax-based, particularly involving income and estate tax. Specialists in this area also need their corporate tax knowledge to be up to scratch as it's not unusual for the families they work for to have multimillion-dollar businesses to their names.
  • The stereotype of the typical ‘country gent’ client is far from accurate: lottery wins, personal injury payouts, property portfolios, massive City salaries and successful businesses all feed the demand for legal advice.
  • If you are wavering between private clients and commercial clients, charities law might offer a good balance. Charities range from small voluntary organisations to large, global behemoths.
  • Your charity clients may have more worthy goals than those of your friends working for big business, but they'll need advice on many of the same issues: from how to incorporate, to supply contracts, to the duties of management and trustees.
  • Charities law still conjures up images of sleepy local fund-raising efforts or, alternatively, working on a trendy project for wealthy benefactors. The wide middle ground can incorporate working with a local authority, assisting a local library or school to establish an after-school homework programme, or rewriting the constitution of a 300-year-old church school to admit female pupils. Widespread international trust in English charity law means that you could also establish a study programme in Britain for a US university or negotiate the formation of a zebra conservation charity in Tanzania.

Current issues

  • Since the UK voted to leave the EU there has been much speculation about the impact on the private client and charity sector. It's likely that income and inheritance tax rates will eventually be increased and certain tax relief payments may be restricted. 
  • The changing legislative landscape is likely to have a fairly significant impact on non-profit companies receiving EU funds, working with European organisations, or undertaking projects in Europe. Furthermore, tax relief for cross-border donations between EU countries might no longer be available for UK-based non-profits. 
  • In the wake of the Panama Papers data leak in early 2016, (which revealed how the world's wealthy hide their assets in offshore tax havens), public and media pressure has forced governments to take steps towards cracking down on money laundering and tax evasion. The Common Reporting Standard (CRS) – which standardises accounting practice internationally – was created in 2014 to increase the sharing of pertinent information between participating countries; it started collecting data from entities in 2017. Over in the UK HMRC has a new software programme called 'Connect' which can analyse large amounts of private data, allowing suspicious behaviour to be spotted more quickly than before. On top of this HMRC has stated that it wishes to process 100 prosecutions of wealthy individuals and corporations per year by 2020.
  • Despite the scandal surrounding the Panama Papers, financial arrangements relating to offshore financial centres remain important, and a group of small and specialist law firms deal with much of the related legal work. You can find them ranked in the 'Offshore' category in Chambers UK
  • The Finance Bill 2017 proposes to implement penalties for enablers of defeated or 'abusive' tax avoidance schemes. A proposed penalty is a fine equalling the total amount of money the enabler made off of their role in the scheme. Some lawyers and accountants expressed concern over how they could identify an 'abusive' scheme, as well as how the term 'enabler' would be defined; the government has since clarified its stance to allay these concerns. 
  • Non-dom rules have been changed to allow returning expats to reacquire their UK domicile status as soon as they return. This is likely to affect clients of law firms who were born in the UK but subsequently settled abroad, especially if they've kept their wealth out of the UK's tax net. If they now return to the UK any gains or income made from their offshore trusts or companies will be taxed.
  • As part of a wider push towards transparency in the charity sector, the Charities Act 2016 gives new powers to the Charity Commission, to strengthen and increase regulation of the sector. The act also broadens the scope of criminal offences which could lead to an individual's disqualification from trustee status.
  • The rise of social enterprises (commercial organisations with social or charitable, rather than simply monetary, objectives) has blurred the lines between commercial and charities law. A range of legal structures exists for these enterprises to make use of, including charitable trusts, co-operatives and Community Interest Companies (profit-making enterprises that must reinvest their income for the benefit of social objectives).