Legal Focus, part five: Residual balances rules have changed

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11 December 2014

Part five of the Legal Focus guide

Hazlewoods are pleased to announce a six-part series on current topics of financial business interest, entitled Legal Focus. This week, we will be releasing a daily guide produced specifically for the legal sector.

As expected, version 12 of the handbook includes confirmation of the increase in the limit for donating residual client balances without prior SRA authorisation. The changes are effective from 31 October 2014, and apply retrospectively, i.e. to existing and new balances.

For those of you who are unaware, prior to these changes the limit for donating residual balances to charity without first having to obtain written permission from the SRA was £50. The new rules have increased this to £500.

The limit applies to individual balances, not aggregate amounts, and any balances above £500 will still need to be approved by the SRA.

Other than the increase in the threshold, there are no changes to the underlying rules around what practices should do to try and return the balances to the clients, and the records that need to be kept when balances are donated.

This release has been prepared as a guide to topics of current financial business interests. Hazlewoods strongly recommend you take professional advice before making decisions on matters discussed here. No responsibility for any loss to any person acting as a result of the material can be accepted by Hazlewoods.


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