Where we hold money in a client account for you, the SRA Accounts Rules require us to account to you for an equivalent to interest that would be earned if the funds were placed in a separate client deposit account where it is fair and reasonable to do so in all circumstances. This is typically where we are holding a substantial amount of money for a significant period of time.
The level of interest you can expect to receive, referred to as a payment in lieu of interest earned, will be based on the published client deposit rate of National Westminster Bank PLC. At the time of writing, the published client deposit rate of National Westminster Bank PLC can be found at https://www.natwest.com/business/savings/client-deposit-manager.html.
Interest will not accrue on any property-related matters, including but not limited to, funds held pending completion, mortgage advances, deposits received or sales proceeds held pending distribution (save by prior arrangement). Any net sale proceeds held on a property ledger which relate to a matter where we are instructed to act in a Probate matter will be promptly transferred to the relevant probate ledger (and in any event within 3 working days following completion of the sale) and interest shall then accrue on that ledger in accordance with this policy.
Interest will also not accrue on any funds provided by you on account of our anticipated or actual costs or for anticipated disbursements this includes funds on account of any Court fees, Counsel fees or any other costs or fees payable to third parties.
There shall be a de minimis of £50.00. Interest will not be paid unless over £50.00 becomes due to the client in accordance with this policy prior to those funds being distributed, it having been deemed that the administrative costs for sums below this figure would be prohibitive.
Where your money is held in our client account, any interest paid to you is paid without any deduction for income tax (unless you are resident overseas – see below). As such, it is your responsibility to inform HMRC of amounts of interest received from us and the implications of this will depend upon your own financial circumstances.
Under the European Savings Directive, regulation 2003/48/EC, we are required to inform HMRC of payments of interest to relevant payees and residual entities in prescribed territories. Where you reside outside the UK and EC, we are required to deduct income tax at the current basic rate and account for this interest to HMRC directly and pay you the net amount.
Where we hold money on more than one matter for a client or third party, interest will be calculated separately for each individual instruction.
Interest will be calculated from the time the funds become cleared for interest purposes. On cheques or banker’s drafts, this will be 3 working days after the cheque or draft has been deposited with our bank. For amounts received by debit or credit card, interest will start to accrue from the date of the actual receipt, usually 3 working days after the transaction has been authorised. For direct transfers or same-day payments, the funds become cleared on the day after receipt. Interest will be calculated on a daily basis and calculated on amounts held overnight from the day the funds become cleared for interest purposes.
For probate matters, the interest will be paid on the deemed final date of administration or as close to the administration.
Please note there may be a short delay between the final administration date and the actual distribution of funds on probate matters and funds may also be retained for as yet undetermined liabilities Interest will not accrue on these funds.
We reserve the right to set off any interest due to you against any amounts due to us.
Should a client believe their specific circumstances warrant special consideration or arrangements in terms of interest payable, then this must be discussed and agreed to prior to or within 3 working days of funds being received, otherwise, this policy shall apply. We cannot guarantee a particular rate of interest in any circumstances. Funds are not intended to be held by this firm for longer than necessary to conclude your transaction and we do not and cannot provide banking facilities.
We will not be liable to you or any third party for any loss or damage suffered as a result of any act, omission, fraud, delay, negligence, insolvency or default of any bank, financial institution, clearing or payments system nor that of the directors, officers, employees, agents or representatives of any of the foregoing. We will not pay interest to you where for any reason we are prevented by law from doing so and in such circumstances will have no liability for non-payment. Nothing in this policy excludes our liability below the minimum level under the SRA Indemnity Rules.
This policy will be reviewed from time to time to ensure the overriding objectives under the Solicitor’s code of conduct are met.