Tuesday, September 20, 2016

Trust monies and the ISA

As you will be aware, where you receive funds in Compulsory Liquidations and Bankruptcies that may or may not actually be estate funds, you should still remit those monies to the ISA until you have resolved their status, treating them as trust monies.  This could arise, say, where you receive monies that are potentially due to a chargeholder under a fixed charge, or monies that may in fact belong to a third party. 

When remitting them to the ISA you should request that they be placed into a trust account so that they do not attract Secretary of State fees.  However, we have received feedback from clients recently that Estate Accounts Services are now asking for evidence that the funds should in fact be treated as trust monies and are not estate funds.  You need to ensure that you can indeed evidence their status as trust monies, or that their status is uncertain and needs to be resolved, when you remit the funds to the ISA.

As an aside, if you receive monies from a third party in connection with an annulment on the grounds of payment in full, then you should not remit those monies to the ISA since they are not estate funds, but should pay them into a clients’ account instead.