Anti-money laundering

Is a deed of variation of benefits a money laundering or tax evasion risk?

I don’t make or receive third-party payments and my firm doesn’t act as a banker. Yet clients may arrange to pay third parties under a deed of variation and beneficiaries may agree to send the money to anyone. Is there a risk of money laundering or tax evasion?

There can be no money laundering offence where there is no suspicion that the funds to be paid are proceeds of crime, as there is no existing criminal property.

However, solicitors are duty bound to uphold the rule of law.

You should always be on your guard not to allow your services to be used in the commission of a crime.

Where it’s clear that the purpose of the variation is to facilitate tax evasion, you must advise the clients that this is a criminal offence with significant consequences.

If the clients insist on proceeding, you’ll need to advise them that you’re unable to continue acting, in accordance with:

Disclaimer

While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.

Have you got a practice question?

Call the Practice Advice Service on 020 7320 5675 or email practiceadvice@lawsociety.org.uk.

The Practice Advice Service is staffed Monday to Friday from 9am to 5pm.

Maximise your Law Society membership with My LS