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:

• principles 1 to 5 of the SRA Standards and Regulations 2019, and
• paragraph 2.1 of the SRA Code of Conduct for Firms 2019