Transparency data

Accounts for the Crown’s Nominee for the year ended 31 March 2022

Published 19 December 2022

Contents

Foreword
Accountability Report
Statement of Responsibilities of the Crown’s Nominee
The Governance Statement
The Independent Auditor’s Report to the House of Commons

The Accounting Schedules

Statement of Net Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Reserves

Notes to the Accounts

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Foreword

Introduction and Background

As Treasury Solicitor, I have been appointed by the Sovereign to be the Crown’s Nominee for the purpose of collecting and disposing of bona vacantia (ownerless assets). The Bona Vacantia Division of the Government Legal Department administers bona vacantia in England and Wales on my behalf, except for the Duchies of Cornwall or Lancaster for which I have no responsibility. In Northern Ireland, the Crown Solicitor deals with bona vacantia as my Agent. I have no responsibility for bona vacantia in Scotland which is dealt with by the King’s and Lord Treasurer’s Remembrancer.

Bona vacantia arises from: the estates of persons who die intestate and there is no entitled kin to inherit; from the assets of now dissolved companies; and other miscellaneous bona vacantia, for example failed trusts. More information about bona vacantia, including a postal address for written correspondence, can be found at this website:

https://www.gov.uk/government/organisations/bona-vacantia

The Bona Vacantia Division is notified of potential bona vacantia from a number of sources. For estates of deceased persons, this is mainly by local authorities, members of the public, solicitors and banks. For companies, referrals of cash assets generally come from banks and other financial institutions, but in the case of other assets, such as land, referrals come from a variety of sources, similar to the referrals for estates.

The Bona Vacantia Division, before taking on the referral and commensurate with the potential value of assets, undertake checks to ensure that the assets are, or are likely to be, bona vacantia. Once confirmed, for estates, the Division generally disposes of the assets and settles known and relevant liabilities, but does not take on insolvent estates. For companies, it will sell assets and, where there is a secured interest (e.g. mortgage), may settle any sum due in order to realise the value of the asset. However, assets may be disclaimed on various grounds including where, for example, there is negative equity. Company liabilities, unless secured, do not vest as bona vacantia.

Dissolved companies can usually be restored within six years of dissolution (Companies Act 2006). Generally, this will be done by creditors or former owners to allow them access to the assets of the company. If this happens, the company comes back to life and bona vacantia no longer exists. The assets belong to the company again, unless they have been disposed of, in which case the Bona Vacantia Division will pay over the proceeds of sale, less any costs incurred in dealing with the asset.  However, it is recognised that restoration is not always an economic proposition and the Division can make discretionary payments of up to £3,000 to former members or former liquidators of dissolved companies. Where a dissolved company cannot be restored to the Companies Register, a discretionary payment can also be made, but under different criteria.

The Bona Vacantia Division is obliged to pay over the value of the estate to entitled kin on subsequent receipt of a valid claim. These payments can be made many years after the assets have been realised but generally the time limit for claims to estates is 12 years (Limitations Act 1980). Payments to kin can be made outside of the 12 year limit, up to a period of 30 years from the date of death, but such payments are on a discretionary basis.

Using the provisions of the Administration of Estates Act 1925, the Division can make a discretionary payment to people whom the deceased might reasonably have made provision for. Such discretionary payments will not be recovered, even if entitled kin subsequently come forward nor, will the amount be deducted from the value of the estate when it is paid over to kin.

The Companies Act 2006 created an administrative restoration process which allows company members to restore a dissolved company to the Companies Register quickly and efficiently. Prior to restoration, the consent of the Crown’s Nominee, referred to as a waiver, is required.  As a result, the Crown’s Nominee charges an administrative fee to recover the cost of dealing with such applications.

Recovery of Crown Costs represents the fees charged to entitled kin and restored companies for administration of estates and companies while the assets were considered to be bona vacantia.

The Bona Vacantia Division work very closely with its key stakeholders who are:

• His Majesty’s Treasury, who is the recipient of bona vacantia income and acts as the Division’s client;

• Local Authorities;

• The Probate Registry;

• Companies House;

• Land Registry;

• District Valuers; and

• Auctioneers.

The Government Legal Department charges the Crown’s Nominee Account for the services provided by its Bona Vacantia Division. A charge is also paid to the Crown Solicitor for handling bona vacantia in Northern Ireland. The fees are shown in Note 9 of the Account.

Preparation of Accounts and External Audit

The Accounts have been prepared in accordance with a statement of approved form issued by the Treasury for the purposes of rule 4 (1) of the Treasury Solicitor (Crown Nominee) Rules 1997.

The Crown’s Nominee Accounts are audited by the National Audit Office (NAO) on behalf of the Comptroller and Auditor General. The notional audit fee is £90k in 2021-22 (2020-21: £50k) and no further assurance or other advisory service has been provided by the NAO.

Performance in 2021-22

Net income for the 2021-22 year amounted to £77 million (2020-21: £52 million).  The increase can be mainly attributed to an increase in Estates and Companies receipts, as shown in Note 2.

Receipts in 2021-22 were £132 million (2020-21:  £85 million), with the 55 per cent increase being mainly attributed to an increased volume of Companies cases. Income disclosed in Note 2 of the accounts was £82 million (2020-21: £58 million), which is lower than receipts as income has been constrained for the amounts that may be refunded in the future to kin claimants and restored companies and deductions from income have been made for discretionary payments and legal charges on estates. The overall number of Estates cases received this year was similar to the previous year, although Estates new referral cases increased by 17%. The Crown’s Nominee receipts vary from year-to-year depending on the number and value of cases referred that, after some investigation, are identified as bona vacantia. High value estates or dissolved companies with significant assets, can make a material difference to annual receipts.

The COVID-19 pandemic and subsequent lockdowns had affected the number of new cases being referred from financial institutions and local authorities although this year we have seen signs of a recovery, with increased referrals compared to the year before. The volume of new cases is still just below pre-pandemic levels. To minimise the impact of the COVID-19 pandemic, several measures were introduced to encourage the electronic referral of new cases. In addition, several new processes were implemented to facilitate more homeworking. This helped the Division to continue processing work in an effective manner despite the challenges presented by the pandemic.

During 2021-22, the Bona Vacantia Division handled a total of 32,000 companies and estates cases (2020-21: 26,000 cases) with the increase in case numbers attributed to an increase in Companies cases. In addition to this, the Bona Vacantia Division also processed 48,000 bulk electronic, low value, companies cases (2020-21: 39,000), where each case has assets worth less than £300. These cases were referred by financial institutions following outreach work and can be processed relatively quickly.

Receipts from dissolved companies were £113 million in 2021-22 (2020-21: £70 million). Companies income disclosed in Note 2 of the accounts was £71 million (2020-21: £47 million), which is lower than receipts as income has been constrained for the amounts that may be refunded in the future to restored companies and deductions from income have been made for discretionary payments.  The Bona Vacantia Division has continued working with financial institutions to recover cash relating to dissolved companies. The number of new company case referrals was 29,000 in 2021-22 (2020-21: 24,000). The increased volume of new companies cases is due to proactive engagement with financial institutions and a backlog in referrals from the previous year due to the COVID-19 pandemic.

Receipts from estates cases were £18 million in 2021-22 (2020-21: £14 million). Estates income disclosed in Note 2 of the accounts was £10 million (2020-21: £10 million), which is lower than receipts as income has been constrained for the amounts that may be refunded in the future to kin claimants and deductions from income have been made for discretionary payments and legal charges on estates. The number of new estates referrals this year is similar to the previous year. It can take a number of years to realise the value of an estate and the value of assets for each estate can vary considerably.

As described in accounting policy 1.4, income is constrained to reflect the amounts we will pay in future to entitled kin or restored companies. Income was constrained in 2021-22 by £45m (2020-21: £24m). In line with accounting standards, this is a cautious estimate and therefore we would expect some of this would be released in future accounting periods if not required.  Income recognised in 2021-22 relating to performance obligations that were met in earlier periods was £9m (2020-21: £15m).

Income from the companies administrative restoration process and the recovery of Crown Costs was £0.9 million in 2021-22 (2020-21: £0.9 million).

In 2021-22, £32 million was paid back to company directors/shareholders relating to previously dissolved companies, of which £1 million related to discretionary payments.  In 2020-21, £27 million was paid out, of which £1 million was discretionary.

Estates payments to entitled kin were £7 million in 2021-22, of which £2 million related to discretionary payments (after 12 year limitation period). In 2020-21, £7 million was paid to entitled kin, of which £2 million was discretionary. There has been a fall in the number of kin claim applications this year, which was anticipated, as the list of unclaimed estates has been published for a number of years now. The publicity around “the list”, along with a popular TV programme, resulted in a high number of claims in previous years that have now tapered off. 

There is an annual transfer from the bank to His Majesty’s Treasury’s Consolidated Fund. The amount transferred is generally a minimum of 85 per cent of the bank balance of the Crown’s Nominee on the last working day of January, subject to a balance of at least £5 million being retained in the bank for administrative costs and creditors. The transfer in March 2022 was £82 million (£38 million in 2021).

Looking Forward

With the work of the Crown’s Nominee being undertaken by the Bona Vacantia Division of the Government Legal Department, the priorities of the Crown’s Nominee are therefore linked to those of the department. My priorities for the Division, in part, reflect their position in the department and in the next financial year, its priorities will be to continue to support delivery of the Government Legal Department’s Strategy, which is explained in more detail in the Government Legal Department Annual Report and Accounts 2021-22. In addition the Bona Vacantia Division will continue to:

• work to ensure that its client, His Majesty’s Treasury, remains fully confident in how it handles bona vacantia and the value for money that the Crown’s Nominee brings;

• develop the skills and expertise of Bona Vacantia Division staff;

• explore and implement revised processes to facilitate more home working, particularly following the COVID-19 pandemic;

• identify and exploit new streams of bona vacantia assets;

• work with delivery partners to identify, collect and dispose of assets effectively; and

• deliver a public interface that meets the government’s ‘Digital by Default’ strategy.

Susanna McGibbon

Crown’s Nominee

7 December 2022

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Accountability Report

Statement of  Responsibilities of the Crown's Nominee

The Accounts are to be prepared under an Accounts Direction of 30 March 2020 given by His Majesty’s Treasury in accordance with rule 4 (1) of the Treasury Solicitor (Crown Nominee) Rules 1997 (SI 1997/2870). For further information, see the Statement of Accounting Policies, Note 1, of the Accounts.

In preparing the Accounts, the Crown’s Nominee is required to:

• comply with the Accounts Direction issued by His Majesty’s Treasury;

• comply with the Treasury Solicitor (Crown’s Nominee) Rules 1997 (S.I. 1997 No. 2870);

• present them to Parliament;

• state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the accounts;

• observe the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;

• make judgements and estimates on a reasonable basis; and

• prepare the Accounts on a going concern basis.

The Crown’s Nominee, as Accounting Officer, is responsible for the propriety and regularity of the public finances for which they are accountable, for keeping proper records and for safeguarding the assets of the Crown’s Nominee.

By agreement with His Majesty’s Treasury, an amount raised through the realisation of bona vacantia assets is transferred to the Consolidated Fund each year, after retaining sufficient funds in order to meet the Crown’s Nominee routine liabilities, as they fall due, in respect of his bona vacantia duties.

The Crown’s Nominee operates through the Bona Vacantia Division, a part of the Government Legal Department. The Crown’s Nominee, therefore, looks to the Government Legal Department to provide certain services in support of the functions of the Crown’s Nominee. The Government Legal Department is responsible for putting in place reasonable controls, including the protection of the integrity of the Division’s pages on the GOV.UK website; this responsibility includes accurate reproduction and maintenance of the annual audited Accounts that are made available to users of the website.

Statement regarding disclosure of information to the auditors 

As the Crown’s Nominee, and Accounting Officer, I have taken all reasonable steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the auditors are aware of that information. As far as I am aware, there is no relevant audit information of which the auditors are unaware.

I also confirm that the Accounts and Foreword as a whole are fair, balanced and understandable, and I take personal responsibility for the judgements made within the Account.

The Governance Statement

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Framework

Under the 1876 Act, the Treasury Solicitor, has been appointed by successive Sovereigns by Royal Warrants to be the Crown’s Nominee for the purpose of collecting and disposing of bona vacantia. This nomination is formalised by way of Royal Warrant and made on the advice and by the recommendation of the Commissioners of His Majesty’s Treasury. The current Royal Warrants are dated 21 August 1984.

As Treasury Solicitor, I have been designated the Accounting Officer for the Crown’s Nominee Account. As the Crown’s Nominee, I am required to comply with The Treasury Solicitor (Crown’s Nominee) Rules and to maintain the Crown’s Nominee Account. I am required to prepare Accounts each year for presentation to Parliament and the Accounts are to be prepared under the Accounts Direction given by His Majesty’s Treasury of 30 March 2020.

As the Crown’s Nominee, I am responsible for the propriety and regularity of public finances for which I am answerable, for keeping proper records and safeguarding the assets of the Crown’s Nominee, as well as having responsibility for day-to-day issues affecting the Government Legal Department’s Bona Vacantia Division, such as staffing, training and compliance.

His Majesty’s Treasury Commissioners advise His Majesty on the role of the Crown’s Nominee, as detailed in the Royal Warrants. There are also statutory provisions directly governing some aspects of the functions of the Crown’s Nominee. It is also for His Majesty’s Treasury to set regulations, policy, financial delegation limits and direction for the management of the Crown’s Nominee Accounts. A Minister of His Majesty’s Treasury is required to lay the Crown’s Nominee Accounts before Parliament. 

As Crown’s Nominee, I aim to provide a high quality service to stakeholders, including His  Majesty’s Treasury, Parliament, staff and other people who will be affected by dealing with bona vacantia assets. To this end, formal meetings take place between management representatives on my behalf and His Majesty’s Treasury, to provide updates on performance, business plans, budgets, and agree the transfer of monies to the Consolidated Fund and to review risks. In addition to discussing budgets and performance, these meetings are also used to seek agreement on policy issues and to highlight risks. Ad-hoc meetings also take place to discuss urgent issues, where direction or authority is sought.

To the extent that it is deemed relevant and practical I, as the Crown’s Nominee, when discharging my responsibilities, apply relevant elements of the Corporate Governance in Central Government Departments: Code of Good Practice. These include:

• strategy – setting the vision;

• commercial focus – scrutinising the allocation of resources to achieve plans, ensuring controls are in place to manage risk;

• talented people – ensuring there is the capability to deliver and to plan and meet current and future needs;

• results focus – agreeing an annual budget and monitoring performance to ensure value for money; and

• management information – commissioning monthly performance reports containing clear, consistent and comparable performance information to drive improvements.

Operation

As Crown’s Nominee, I direct the Government Legal Department’s Bona Vacantia Division to identify, collect and dispose of bona vacantia assets. The day-to-day responsibility for dealing with bona vacantia rests with the Head of the Bona Vacantia Division. The Head of the Bona Vacantia Division has systems in place for regular communication with all staff, including policy, operational and financial matters, and for informing them of new developments and key issues. The Government Legal Department’s Finance Director manages a discrete unit within his Division that is responsible for the payments, receipts, preparation of Accounts and financial and management accounting for the Crown’s Nominee.

The Head of the Bona Vacantia Division is part of the Government Legal Department’s Strategic Leadership Group and is subject to the department’s governance and wider control system that is described in the Government Legal Department’s Annual Report and Accounts 2021-22. Regular reports are provided to me as the Crown’s Nominee by the Bona Vacantia’s Head of Division, with quarterly meetings arranged to discuss work priorities, progress against performance targets and the steps being taken to manage risk. In addition, the Head of the Bona Vacantia Division, attends the Government Legal Department’s Operations Committee, where matters relating to Bona Vacantia, are discussed. The Head of the Bona Vacantia Division is also required to provide an annual Director’s Assurance Report, reporting on activity during the year, the management of the resources allocated, and confirming that all risks to the achievement of objectives have been reviewed and that appropriate action to manage those risks has been, or is being, taken.

As the Crown’s Nominee, I seek advice and challenge from the Government Legal Department’s Board, the Audit and Risk Assurance Committee and the Government Internal Audit Agency as and when required.

Each year, the Crown’s Nominee Accounts are reviewed by the Government Legal Department’s Audit and Risk Assurance Committee, and where necessary, issues are escalated to me.

Through the Head of the Bona Vacantia Division I, as the Crown’s Nominee, provide assurance to His Majesty’s Treasury by submitting quarterly progress reports and meeting formally three times a year.

As the Crown’s Nominee, I have delegated day-to-day management and operational functions to be carried out through the Head of the Bona Vacantia Division, who has regular meetings with their senior management team to discuss and agree operational and strategic issues, including the review of risk registers. Divisional meetings also take place during the year to deliver key messages to all staff in the Bona Vacantia Division.

Statement on Information Risk

The Crown’s Nominee holds information for the cases handled in relation to bona vacantia.

A  framework is in place for handling data relevant to the Bona Vacantia Division’s work and to provide assurance over the management and security of information held within the Division, including:

• the Head of the Bona Vacantia Division having the role of Information Asset Owner for all information held by the Division;

• the Bona Vacantia Division identifying the information held and maintaining an Information Asset Control Register. Access to information is minimised whilst maintaining a balance between business needs and risk;

• instructions being provided to staff on the Government Legal Department’s and Bona Vacantia Division’s data handling and security related policies, procedures for handling information, and a system in place to authorise and record any dispensation from compliance with those policies;

• all relevant staff completing mandatory ‘Data Protection 2020 – The Data Protection Journey’ and Data Protection Act 2018 – Staff Awareness’ training courses;

• all relevant staff completing ‘Security and Data Protection’, ‘Health and Safety’ and ‘Inclusion in the Civil Service’ training courses; 

• all relevant staff completing a mandatory ‘Data Protection’ training course, covering the General Data Protection Regulations (GDPR);  and

• incorporation of information risks within the risk management policy and process.

Risk Management and Internal Control

As the Crown’s Nominee, I have a system of internal control, managed through the Bona Vacantia Division, to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can, therefore, only provide reasonable and not absolute assurance of effectiveness.

The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of policies, aims and objectives; to evaluate the likelihood and impact of those risks being realised; and to manage them efficiently, effectively and economically. The system of internal control has been in place for the Bona Vacantia Division for the year ended 31 March 2022 and up to the date of the approval of these Accounts and accords with guidance from His Majesty’s Treasury.

The Bona Vacantia Division’s risks are related to the key targets and priority work areas set out in the Government Legal Department’s Business Plan. Risk is managed by identifying and evaluating risks and appropriate control measures, which are set out in the Division’s Risk Register. All Bona Vacantia Division staff have access to the Risk Register, which is held on the shared network. As external third party fraud is the main risk, the Division has continued to develop links with delivery partners, such as the Probate Registry and Land Registry, to help address this risk. Risk and fraud awareness is also covered in the induction programme for new staff to the Division, which forms part of their training.

The Head of the Bona Vacantia Division holds regular management meetings with the Division’s senior management team where new risks are identified and existing risks reviewed. The Division has adapted to changes to the risk environment by focussing on the secure handling of all valuables, reducing the continued potential for fraud, the impact of the Covid pandemic on service delivery and dealing more efficiently with the large volume of companies work.

Risk management is embedded in the activity of the Bona Vacantia Division. The system of control underpinning the Crown’s Nominee Accounts includes:

• a Divisional Budget and Business Plan, which defines priorities, key targets and accountability for delivery; 

• systematic identification and management of risks through a Risk Register linked to the Division’s Business Plan;

• standardised processes and procedures set out in published guidelines, practice guides and internal desk instructions, supplemented by training events;

• segregation of duties, and the “four eyes” principles in key areas, such as post opening, cheque and cash handling;

• an invigilator to oversee post opening;

• detailed procedures for handling valuables and cheques received during post opening to account for all valuable items in a secure way and ensuring there is a clear audit trail;

• a set of Divisional standards on the handling and management of bona vacantia cases;

• management arrangements, including a system of delegated financial authorities for all payments made by the Division. These delegations relate to case related payments, including the payment of discretionary grants;

• a management information system, based on information from an electronic case management and finance system, which provides details of key performance indicators on a monthly basis; 

• a Business Continuity Plan setting out arrangements for dealing with a loss of infrastructure or information and communications technology; and

• money laundering procedures that are applied on the sale of appropriate bona vacantia property.

Risk Assessment and Issues

The Risk Register for 2021-22 records the main areas of risk to the Bona Vacantia Division’s  work as: the potential for fraud; their case management system becoming out of date; a loss of infrastructure or ICT; a failure to recruit and retain staff; a failure to manage unexpected large influxes of work; the insecure handling of valuables and personal data; and the impact of processing bona vacantia work remotely due to the COVID-19 pandemic. These risks continued to be addressed during the year and actions included:

• keeping under review measures to counter fraud, including links with delivery partners, such as the Probate Registry and Land Registry;

• having a Fraud Working Group to raise fraud awareness and identify any new areas of potential fraud risk, and take appropriate steps to address risks identified;

• reviewing the capability of the current and potential future case management systems;

• reviewing and updating the Business Continuity Plan;

• reviewing and updating processes for post opening and handling valuables;

• recruiting temporary staff to deal with short-term increases in work volumes and to fill job vacancies;

• having a Workforce Strategy setting out planned recruitment campaigns;

• reviewing processes to facilitate more home working and minimise the need for staff having to come into the office during the COVID-19 pandemic; and

• providing guidance to staff on such matters as gifts and hospitality and related party transactions.

Audit

The Government Legal Department’s Audit and Risk Assurance Committee provides support in monitoring and reviewing the Bona Vacantia Division’s risk, control and governance processes and the associated assurance processes. The Committee is chaired by a Non-Executive Director and meets at least three times a year. Membership of this Committee includes one other Non-Executive Director and an additional independent member.

Additionally, audit staff from the Government Internal Audit Agency (GIAA) provide independent assurance on the effectiveness of internal control arrangements in the Bona Vacantia Division. The GIAA completed a review of the Bona Vacantia Division in 2018-19 and gave a substantial assurance opinion. No review took place in the 2021-22 financial year.

Personal data related incidents

Government departments are required to publish information about serious personal data related incidents which have to be reported to the Information Commissioner. The Government Legal Department has not reported any incidents in relation to the work of the Bona Vacantia Division.

Significant Control Issues

I am satisfied that these processes have highlighted no issues of significance in the operation of the Bona Vacantia Division in 2021-22.

Susanna McGibbon

Crown’s Nominee

7 December 2022

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THE INDEPENDENT AUDITOR’S REPORT TO THE HOUSE OF COMMONS

Opinion on financial statements

I have audited the financial statements of the Crown’s Nominee for the year ended 31 March 2022.

The financial statements comprise the Crown’s Nominee’s:

• Statement of Financial Position as at 31 March 2022; 

• Statement of Net Income, Statement of Cash Flows and Statement of Changes in Reserves for the year then ended; and

• the related notes 1-10.

The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and UK adopted International Accounting Standards.

In my opinion, the financial statements:

• give a true and fair view of the state of the Crown’s Nominee’s affairs as at 31 March 2022 and its net income for the year then ended; and

• have been properly prepared in accordance with the Treasury Solicitor’s Act 1876, the Treasury Solicitor’s (Crown’s Nominee) Rules 1997 and HM Treasury directions issued thereunder.

Opinion on regularity

In my opinion, in all material respects, the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

Basis for opinions

I conducted my audit in accordance with International Standards on Auditing (UK) (ISAs UK), applicable law and Practice Note 10 Audit of Financial Statements and Regularity of Public Sector Entities in the United Kingdom. My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my report.

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2019. I have also elected to apply the ethical standards relevant to listed entities. I am independent of the Crown’s Nominee in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Conclusions relating to going concern

In auditing the financial statements, I have concluded that the Crown’s Nominee’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Crown’s Nominee’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

My responsibilities and the responsibilities of the Treasury Solicitor as Crown’s Nominee and Accounting Officer with respect to going concern are described in the relevant sections of this report.

The going concern basis of accounting for the Crown’s Nominee is adopted in consideration of the requirements set out in HM Treasury’s Government Financial Reporting Manual, which require entities to adopt the going concern basis of accounting in the preparation of the financial statements where it is anticipated that the services which they provide will continue into the future.

Other information

The other information comprises information included in the Foreword and the Accountability Report, but does not include the financial statements nor my auditor’s report. The Crown’s Nominee as Accounting Officer is responsible for the other information.

My opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in my report, I do not express any form of assurance conclusion thereon.

In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated.

If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact.

I have nothing to report in this regard.

Opinion on other matters

In my opinion, based on the work undertaken in the course of the audit:

• the parts of the Accountability Report subject to audit have been properly prepared in accordance with HM Treasury directions made under the Treasury Solicitor’s (Crown’s Nominee) Rules 1997; and

• the information given in the Foreword and Accountability Report for the financial year for which the financial statements are prepared is consistent with the financial statements and is in accordance with the applicable legal requirements.

Matters on which I report by exception

In the light of the knowledge and understanding of the Crown’s Nominee and its environment obtained in the course of the audit, I have not identified material misstatements in the Foreword or Accountability Report.

I have nothing to report in respect of the following matters which I report to you if, in my opinion:

• I have not received all of the information and explanations I require for my audit; or

• adequate accounting records have not been kept by the Crown’s Nominee or returns adequate for my audit have not been received from branches not visited by my staff; or

• the financial statements and the parts of the Accountability Report subject to audit are not in agreement with the accounting records and returns; or

• the Governance Statement does not reflect compliance with HM Treasury’s guidance.

Responsibilities of the Crown’s Nominee as Accounting Officer for the financial statements

As explained more fully in the Statement of Responsibilities of the Crown’s Nominee, the Crown’s Nominee as Accounting Officer is responsible for: 

• maintaining proper accounting records;

• the preparation of the financial statements and Annual Report in accordance with the applicable financial reporting framework and for being satisfied that they give a true and fair view; 
• ensuring that the Annual Report and accounts as a whole is fair, balanced and understandable;
• internal controls as the Accounting Officer determines is necessary to enable the preparation of financial statement to be free from material misstatement, whether due to fraud or error; and
• assessing the Crown’s Nominee’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Accounting Officer anticipates that the services provided by the Crown’s Nominee will not continue to be provided in the future.

Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK).

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was considered capable of detecting non-compliance with laws and regulations including fraud

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of non-compliance with laws and regulations, including fraud. The extent to which my procedures are capable of detecting non-compliance with laws and regulations, including fraud is detailed below.

Identifying and assessing potential risks related to non-compliance with laws and regulations, including fraud

In identifying and assessing risks of material misstatement in respect of non-compliance with laws and regulations, including fraud, we considered the following:

• the nature of the sector, control environment and operational performance including the design of the Crown’s Nominee’s accounting policies.

• inquiring of management, the Government Legal Department’s head of internal audit and those charged with governance, including obtaining and reviewing supporting documentation relating to Crown Nominee’s policies and procedures relating to:

o identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;

o detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and

o the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations including the Crown’s Nominee’s controls relating to the Treasury Solicitor’s Act 1876, the Treasury Solicitor’s (Crown’s Nominee) Rules 1997, Administration of Estates Act 1925, Companies Act 2006, and Managing Public Money;

• discussing among the engagement team and involving relevant specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, I considered the opportunities and incentives that may exist within the Crown’s Nominee for fraud and identified the greatest potential for fraud in the following areas: revenue recognition, posting of unusual journals, complex transactions, bias in management estimates including the IFRS 15 refund liability. In common with all audits under ISAs (UK), I am also required to perform specific procedures to respond to the risk of management override of controls.

I also obtained an understanding of the Crown’s Nominee’s framework of authority as well as other legal and regulatory frameworks in which the Crown’s Nominee operates, focusing on those laws and regulations that had a direct effect on material amounts and disclosures in the financial statements or that had a fundamental effect on the operations of the Crown’s Nominee. The key laws and regulations I considered in this context included the Treasury Solicitor’s Act 1876, the Treasury Solicitor’s (Crown’s Nominee) Rules 1997, Administration of Estates Act 1925, Companies Act 2006, Managing Public Money, and taxation legislation.

Audit response to identified risk

As a result of performing the above, the procedures I implemented to respond to identified risks included the following:

• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described above as having direct effect on the financial statements;
• enquiring of management, and the Government Legal Department’s Audit and Risk Assurance Committee concerning actual and potential litigation and claims;
• reading and reviewing minutes of meetings of those charged with governance and internal audit reports;
• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business;
• in considering the revenue cycle I reviewed and challenged the application of IFRS 15 – Revenue from contracts with customers to the transactions reported by the Crown’s Nominee;
• in respect of the risk that contract assets are incorrectly valued I have examined the approach to valuation, tested a sample of items to underlying data and considered the application of constraint to the assessed value of the underlying assets; and
• in addressing the risk of fraud in revenue recognition I assessed the methodology, key assumptions and sources of information used for the valuation of the IFRS 15 refund liability and contract assets.

I also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of my report.

Other auditor’s responsibilities

I am required to obtain evidence sufficient to give reasonable assurance that the income and expenditure reported in the financial statements have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

Gareth Davies

Comptroller and Auditor General

National Audit Office

157-197 Buckingham Palace Road

Victoria

London

SW1W 9SP

Date: 8 December 2022

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Statement of Net Income

for the year ending 31 March 2022

			Restated*
	Notes	2021-22	2020-21
		£000	£000
Income	2	82,466	57,553
Expenditure	3	(5,414)	(5,486)
Net income		77,052	52,067

All income and expenditure is derived from continuing operations

The notes on pages 20 to 30 form part of these Accounts

*Analysis of the restatements which alter the Statement of Net Income is set out in note 1.2

Statement of Financial Position

as at 31 March 2022

			Restated*	Restated*
		31 March	31 March	1 April
		2022	2021	2020
	Notes	£000	£000	£000
Current assets
Trade and other receivables	4	7,579	5,347	4,005
Cash and cash equivalents	5	19,871	18,253	11,689
Total current assets		27,450	23,600	15,694
Current liabilities
Trade and other payables	6	(56)	(53)	(141)
IFRS 15 refund liability	7	(86,151)	(77,446)	(83,569)
Total current liabilities		(86,207)	(77,499)	(83,710)
Assets less current liabilities		(58,757)	(53,899)	(68,016)
Net liabilities		(58,757)	(53,899)	(68,016)
Capital reserve		(58,757)	(53,899)	(68,016)

Susanna McGibbon

Crown’s Nominee

7 December 2022

The notes below form part of these Accounts

*Analysis of the restatements to the Statement of Financial Position is set out in note 1.

Statement of Cash Flows

for the year ending 31 March 2022

			Restated*
		2021-22	2020-21
	Notes	£000	£000
Net income		77,052	52,067
Adjustments for non-cash transactions arising in the year
(Increase) in trade and other receivables	4	(2,232)	(1,342)
Increase/(Decrease) in trade and other payables	6	3	(88)
IFRS 15 refund liability provided in year	7	42,285	24,156
Auditor’s remuneration	3	90	50
Less
Utilisation of IFRS 15 refund liability**	7	(36,580)	(30,279)
Net cash inflow from operating activities		83,618	44,564
Payment to the Consolidated Fund		(82,000)	(38,000)
Net increase in cash	5	1,618	6,564
Cash and cash equivalents at the beginning of the year	5	18,253	11,689
Cash and cash equivalents at the end of the year	5	19,871	18,253
Net increase in cash	5	1,618	6,564

The notes below form part of these Accounts

*Analysis of the restatements to the Statement of Financial Position which alter the Statement of Cash Flows is set out in note 1.2

**This was previously referred to as “utilisation of provisions”

Statement of Changes in Reserves

for the period ending 31 March 2022

			Restated*
		Capital Reserve	Capital Reserve
		2021-22	2020-21
	Notes	£000	£000
Balance prior to restatement		(66,020)	(75,868)
Prior period adjustment		12,121	7,852
Balance at 1 April		(53,899)	(68,016)
Net Income		77,052	52,067
Payments to the Consolidated Fund		(82,000)	(38,000)
Non cash charge for auditor’s remuneration	3	90	50
Balance at 31 March		(58,757)	(53,899)

The notes below form part of these Accounts

*Analysis of the restatements to the Statement of Financial Position which alter the Statement of Changes in Reserves is set out in note 1.2

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Notes to the Accounts

=====================

1. Statement of Accounting Policies

In exercise of the powers conferred by sections 4 and 5 of the Treasury Solicitor Act 1876 (“the 1876 Act”), His Majesty’s Treasury have made an Accounts Direction for the preparation of the Crown’s Nominee Accounts. The financial statements have been prepared in accordance with the Direction and the Treasury Solicitor (Crown’s Nominee) Rules 1997 (SI 1997 No 2870) emanating from the 1876 Act and with the 2021-22 Government Financial Reporting Manual (FReM) issued by His Majesty’s Treasury. The accounting policies contained in the FReM apply International Financial Reporting Standards (IFRS) as adapted to the extent that it is meaningful and appropriate to public bodies. The Crown’s Nominee has reviewed changes to the FReM for 2021-22 and determined that none of the changes have an impact on the Crown’s Nominee financial statements

Where the FReM permits a choice of accounting policy, the accounting policy which has been judged to be most appropriate to the particular circumstances of the Crown’s Nominee Accounts for the purpose of giving a true and fair view has been selected. The accounting policies for the Crown’s Nominee Accounts have been applied consistently in dealing with items considered material in relation to the Accounts.

Newly issued accounting standard, IFRS 16, Leases, is effective for periods beginning on or after 1 January 2019 and will be reflected in the FReM for 2022-23, but this will not affect these Accounts as the Crown’s Nominee does not hold lease liabilities.

Changes to accounting policies are set out in note 1.2.

1.1 Accounting Convention

The financial statements together with the notes on pages 20 to 30 have been prepared under the historical cost convention.

In the fourth quarter of the financial year, a cash transfer is made to His Majesty’s Treasury that reduces the value of assets in the Statement of Financial Position and this, along with the inclusion of the estimate of refund liabilities to kin and dissolved companies falling due in future years, means that liabilities can outweigh assets.  At 31 March 2022, the Statement of Financial Position shows net liabilities of £59 million (31 March 2021: £54 million). A minimum of £5 million is retained from the annual payment to His Majesty’s Treasury to meet any liabilities that crystallise in the months immediately following the payment, and proceeds arising from the future liquidation of estates and companies assets are expected to be sufficient to meet liabilities as they fall due. In the unlikely event that insufficient funds are available to meet a kin or company payment, the Crown’s Nominee will call back funds from His Majesty’s Treasury and therefore it is appropriate to adopt the going concern basis for the preparation of these financial statements. The going concern basis is supported by the assumption of continued provision of service as set out in statute.

1.2 Changes to accounting policies and estimates

During the period, management have reconsidered how best to apply the requirements of IFRS 15 Revenue from Contracts with Customers to the Crown’s Nominee Account. As explained further below, the Crown’s Nominee is entitled to any remaining residual value of the assets of an estate or company after any liabilities have been settled, but is not itself responsible for those liabilities. Accordingly, for the purposes of applying IFRS 15, the directors have concluded that the Crown’s Nominee has two roles when it becomes involved with an estate or company: to act as an agent in realising the assets and settling the liabilities; and to act as a principal in receiving any residual cash amounts as beneficiary. As a consequence, the following changes have been made to the accounting policies applied to the Crown’s Nominee Account in the 2021-22 financial year:

• Proceeds from assets that are expected to be realised have been re-classified from inventory to receivables and are now reflected within ‘contract assets’.  This change has been made to reflect the fact that the non-cash assets of an estate or a company themselves should not be recognised by the Crown’s Nominee. However, it is appropriate to recognise that the realisation of non-cash assets results in these being converted to direct contract assets of the Crown’s Nominee and therefore this is recognised as a contract asset receivable.

• Liabilities associated with assets of estates and companies that have been recognised in the past as payables are now factored into the valuation of accrued contract assets rather than being shown as gross liabilities.  This change has been made to reflect the fact that these aren’t standalone liabilities for the Crown’s Nominee but simply reduce the value of the associated contract assets held.

• Historically, there has been an IAS 37 provision recognised to cover future claims from kin in estates cases, and applications to recover assets in relation to dissolved companies.  This provision has been reclassified as a refund liability within the scope of IFRS 15, as the impact of the provision is to constrain income within the scope of IFRS 15 rather than acting as a standalone liability resulting in an expense.  This change in classification has also had an impact on the valuation of the liability. The revised valuation approach is set out in note 7.  Also as a refund liability, the liability is all considered to be current (due within one year), whereas the IAS 37 provision was split between current and non-current and discounted in line with HMT discount rates which resulted in a £360k reduction to expenditure reported in the year ended 31 March 2021.

These classification changes have also been applied to the prior period and have the following impact on the Statement of Financial Position:

Impact of changes in accounting policy at 31 March 2021	Net liabilities prior to restatement	Reclassification of inventory	Netting of payables against contract assets	New treatment as IFRS 15 refund liability compared to IAS 37 treatment	Constraining contract assets separately to the refund liability	Net liabilities following restatement
Inventory	6,978	(6,978)	-	-	-	-
Receivables	1,644	6,978	(327)	-	(2,948)	5,347
Payables	(380)	-	327	-	-	(53)
Refund liability/ provisions	(92,515)	-	-	12,121	2,948	(77,446)
Cash	18,253	-	-	-	-	18,253
Net liabilities	(66,020)	-	-	12,121	-	(53,899)

Impact of changes in accounting policy at 1 April 2020	Net liabilities prior to restatement	Reclassification of inventory	Netting of payables against contract assets	New treatment as IFRS 15 refund liability compared to IAS 37 treatment	Constraining contract assets separately to the refund liability	Net liabilities following restatement
Inventory	6,478	(6,478)	-	-	-	-
Receivables	2,228	6,478	(1,691)	-	(3,010)	4,005
Payables	(1,832)	-	1,691	-	-	(141)
Refund liability/ provisions	(94,431)	-	-	7,852	3,010	(83,569)
Cash	11,689	-	-	-	-	11,689
Net liabilities	(75,868)	-	-	7,852	-	(68,016)

The impact on the Statement of Net Income in 2020-21 is as follows:

Impact of changes in accounting policy on income and expenditure in 2020-21	Prior to restatement	New treatment as IFRS 15 refund liability compared to IAS 37 treatment	Following restatement
Income	53,644	3,909	57,553
Expenditure	(5,846)	360	(5,486)
Net income	47,798	4,269	52,067

1.3 Significant judgements and estimates

Significant accounting estimates have been made in respect of the valuation of the IFRS 15 refund liability for kin and company claims and the contract assets balance within receivables. The details of these estimates are set out in the accounting policies for Income and in Note 7: IFRS 15 Refund liability.

1.4 Income

Income comprises of:

•  the residual amounts arising from the realisation of estates passing to the Crown’s Nominee under the Administration of Estates Act 1925, net of all legal liabilities relating to the estate;

•  the residual amounts arising from the realisation of property and rights which belonged to dissolved companies, and trusts, which have failed, and residual amounts arising from the sale of miscellaneous bona vacantia, net of all secured liabilities.  These assets are recognised in the Statement of Financial Position within contract assets within trade and other receivables;

• administrative restoration waiver fees; and

• the recovery of costs and disbursements incurred by the Crown’s Nominee.

Income recognition has been assessed in accordance with the IFRS 15 5 Step Model. The key elements and judgements arising from this assessment are that:

• There is no contract between the Crown’s Nominee and a customer, however, the Government Financial Reporting Manual expands the definition of a contract to include legislation and regulations which enables an entity to receive cash or another financial asset from another entity. The legislation that provides this entitlement to the Crown’s Nominee is the Treasury Solicitor Act 1876.

• Knowledge of the assets and the completion of checks verifying that the assets are bona vacantia, and can be administered, is regarded as the point from which a contract exists for the purposes of applying IFRS 15, and this is also the point at which performance obligations are regarded as having been satisfied. For estates, this point is marked by a grant of administration being put in place.  For companies, once the necessary validations have been undertaken a case is opened which marks the recognition criteria having been met.

• Prior to the checks described above being completed, there is insufficient information to determine that a contract exists. Accordingly, if intestate estates or dissolved companies have not yet been notified to the Crown’s Nominee they may be bona vacantia, but they are not recognised because the requirements of IFRS 15 for existence of a contract are not yet regarded as met.

• The Crown’s Nominee acts as administrator for intestate estates and dissolved companies as well as being the beneficiary of the assets associated with these estates and companies. There is not a neat transition from the administrator role to beneficiary as administration activities may occur over many years and assets associated with a particular case may continue to be received over several years. Recognition of bona vacantia is based on the Crown’s Nominee being the beneficiary of bona vacantia, rather than the administrator, confirmed as set out above by knowledge of the assets and checks to confirm that the assets fall within the scope of bona vacantia.

• When it is first determined that a contract exists, there is still uncertainty over the residual value to which the Crown’s Nominee will be entitled. That residual value represents variable consideration, and IFRS 15 requires variable consideration to be recognised only to the extent that it is highly probable that there will not subsequently be a significant reversal. Until sufficient information has been obtained about the assets and liabilities of an estate or company, the revenue constraint is applied to that individual estate or company, and revenue is constrained to zero. Once sufficient information has been obtained about the assets and liabilities of an estate or company, the estate or company is allocated to the portfolio to which it belongs, as explained further below. Thereafter, the variable consideration constraint is applied at the level of the associated portfolio. Accordingly, the allocation of an estate or company to a portfolio is the first point at which amounts for that estate or company will be reflected in revenue.

• There are four portfolios for Estates cases which are based on the size of the Estate and a single portfolio for Companies cases.  These portfolios are then split by the year in which the case was opened with the variable income constraint progressively reduced for older cohorts as the likelihood of refund payments diminishes. Very large Estates, being those with total assets in excess of £3m, are excluded from the portfolio analysis and separately assessed.

The Crown’s Nominee receives assets from estates of deceased intestate people and dissolved companies and trusts. These assets are normally converted into cash within a year. Non-cash assets, for which there is a ready market, are reflected within contract assets at a constrained estimated value on an asset by asset basis until they are sold, after deducting any unsettled liabilities and after the application of the variable income constraint using the approach described above. Any movements in the value of these accrued contract assets are taken to the Statement of Net Income as revenue. At 31 March 2022, the majority of these contract assets valued at £7.3m (31 March 2021: £5.1m) related to the estimated proceeds from freehold and leasehold properties.  The remainder of the balance relates to a mixture of cash balances expected to be transferred, and income arising from the sale of shares and chattels.

As these contract assets are subject to IFRS 15’s variable consideration constraint, they are recognised at a suitably cautious amount. Valuations of these contract assets are based on professional valuation reports, market prices or previous experience. Assets for which there is no ready market are valued at nil until realised. Freehold and leasehold property valuations are based on either an auctioneer’s estimate or publicly available market data. An assessment is undertaken at 31 March to verify that the values held for these assets is considered to still provide an appropriate estimate. These valuations are cautious estimates set at the lower end of the likely range of valuations; this reflects the fact that the Crown’s Nominee does not always have full information regarding the condition of these assets.

There are circumstances where successful claims may be made against the Crown’s Nominee to inherit estates or to restore companies after these estates or companies have been administered and the associated assets realised. Income and associated contract assets arising from the realisation of companies and estates assets is therefore constrained by a refund liability that represents a cautiously high estimate of the likelihood of repayment to kin or the restoration of dissolved companies.  The judgements and estimates inherent in valuing this liability are set out in Note 7: Refund liability.

The income figure is also presented net of discretionary payments arising during the year. There is no legal or constructive obligation to make these payments which relate to estates cases that are over 12 years old or companies cases that are over 6 years old, but in certain situations they may be made and have the impact of reducing income recognised in an earlier period.

Other income streams recognised in the accounts are in respect of:

• The Companies Act 2006 created an administrative restoration process which allows company members to restore a dissolved company to the Companies Register quickly and efficiently. Prior to restoration, the consent of the Crown’s Nominee referred to as a waiver, is required.  As a result, the Crown’s Nominee charges an administrative fee to recover the cost of dealing with such applications.

• The recovery of Crown Costs represents the fees charged to entitled kin and restored companies for administration of estates and companies while the assets were considered to be bona vacantia.

1.5   Expenditure

The categories of Expenditure are:

• payment to the Government Legal Department for the services of the Bona Vacantia Division, including staff, accommodation and ICT costs;

• general expenditure, including administrative expenditure paid directly by the Crown’s Nominee, for example, advertising for kin and Companies House searches; and

• disbursements, which are third party costs directly attributable to the administration of an estate or dissolved company.

1.6   Transfer to the Consolidated Fund

By agreement with His Majesty’s Treasury, on a date after the last day of January, but no later than 14 March, there shall be a transfer to the Consolidated Fund from the Crown’s Nominee Account. The amount transferred is generally a minimum of 85 per cent of the net balance held in the bank at the end of January, subject to a balance of at least £5 million being retained in the bank for administration costs, kin payments, company restorations, contingencies and creditors.

1.7   Refund liability within the scope of IFRS 15 

Consistent with the variable consideration constraint in IFRS 15, the Crown’s Nominee constrains income to reflect a cautiously high estimate of the likelihood of repayment of assets recognised as bona vacantia income in respect of future claims from kin in estates cases, and applications to recover assets in relation to dissolved companies. The estimate of this refund liability and the significant judgements and estimates made is set out in Note 7 of the accounts.

1.8   Taxation

The Crown’s Nominee is exempt from Income and Corporation Tax by way of her Crown exemption.

Where VAT is recoverable on its costs and charges, amounts are included net of VAT. Irrecoverable VAT is included in Income and Expenditure. The amount due to or from His Majesty’s Revenue and Customs in respect of VAT is included within receivables or payables as appropriate.

Payments to kin can include interest from which Income Tax is deducted and paid directly to His Majesty’s Revenue and Customs.

2. Income

			Restated*
		2021-22	2020-21
		£000	£000
Amounts arising from the realisation of estates passing to the Crown under the Administration of Estates Act 1925		10,140	9,583
Amounts arising from the realisation of property which belonged to dissolved companies and trusts which have failed or are no longer existing under the Administration of Companies Act 2006		71,394	47,101
Company restoration waiver fees		367	250
Recovery of Crown Costs for restoring companies or administering estates		565	619
		82,466	57,553
Revenue recognised relating to performance obligations satisfied in the current period		73,170	42,813
Revenue recognised relating to performance obligations satisfied in an earlier period		9,296	14,740
		82,466	57,553

*Analysis of the restatements which alter the Income Note is set out in note 1.2

3.  Expenditure

			Restated*
		2021-22	2020-21
		£000	£000
Service charge		4,865	4,811
General expenses		153	232
Disbursements		306	393
Non-cash costs
Auditor’s remuneration		90	50
		5,414	5,486

4.  Trade and other receivables

		Restated*	Restated*
	31 March	31 March	1 April
	2022	2021	2020
	£000	£000	£000
Contract assets relating to Estates	6,103	4,745	3,327
Contract assets relating to Companies	1,244	373	501
Other receivables	232	229	177
	7,579	5,347	4,005

The Crown’s Nominee has no receivables falling due after more than one year.

Other receivables relates to income due to be refunded to the Crown’s Nominee from the Government Legal Department.

*See Note 1.2 for details of the accounting policy changes that have led to the revised presentation of these balances

5.  Cash and cash equivalents

		31 March	31 March
		2022	2021
		£000	£000
Balance at 1 April		18,253	11,689
Net cash inflow / (outflow)		1,618	6,564
Balances at 31 March		19,871	18,253

All balances were held by the Government Banking Service.

6.  Trade and other payables

			Restated*	Restated*
		31 March	31 March	1 April
		2022	2021	2020
		£000	£000	£000
Other payables		56	53	141
		56	53	141

Other payables primarily represents amounts due to HMRC by the Crown’s Nominee.

The Crown’s Nominee has no payables falling due after more than one year.

*See Note 1.2 for details of the accounting policy changes that have led to the revised presentation of these balances

7. Refund liability in the scope of IFRS 15

					Restated*
			2021-22		2020-21
			£000		£000
Balance at 1 April			77,446		83,569
Provided in year for future payments to kin and companies		45,285		24,156
			45,285		24,156
Refund liability used in year			(36,580)		(30,279)
Balance at 31 March			86,151		77,446

*See Note 1.2 for details of the accounting policy changes that have led to the revised presentation of these balances

The refund liability is an estimate of the anticipated future repayments as a result of kin claims or the restoration of companies. The estimated value of repayments to kin and companies is based on historical trends, which are subject to an annual review. The estimate is a suitably cautious one which seeks to constrain income to the extent that revenue is only recognised when it is highly probable that the Crown’s Nominee is entitled to it.

Once sufficient information has been obtained about the assets and liabilities of an estate or company, the estate or company is allocated to a portfolio. There are 4 portfolios for Estates cases which are based on the size of the Estate and a single portfolio for Companies cases. These portfolios are then split by the year in which the case was opened with the variable income constraint progressively reduced for older cohorts as the likelihood of refund payments diminishes.

Consistent with the variable consideration requirements of IFRS 15, the refund liability has been set at a cautiously high level such that it is highly probable that no significant reversal of revenue recognised will occur. As a consequence, it is reasonably possible that an element within the refund provision will in due course be released as additional revenue rather than being paid out in cash; the additional revenue is recorded in Note 2: Income.

To determine the level of refund liability we apply a percentage, based on past trends, to the retained assets at the year-end on a portfolio and cohort (year of original receipt) basis.  A small variation in the percentages used can result in a significant variation in the level of the liability and the income recorded. If for example 1% more of assets were anticipated to be retained relative to the amount currently constrained the impact would be an increase to income of £5m, if 5% more were retained then the impact would be a credit to income of £22m.

8.  Contingent liabilities

Under section 1013 of the Companies Act 2006, the Treasury Solicitor, as the Crown’s Nominee, may disclaim property vested in the Crown under section 1012 of the Act. The Treasury Solicitor has three years to disclaim, which is reduced to one year on receipt of a specific request to disclaim from a member of the public. However, there is a risk that some property held by the Crown’s Nominee could give rise to third party claims. This risk arises primarily from un-disclaimed land, but the current legal view is that such claims, if identifiable, would not succeed and, therefore, no liability has been recognised.

There are no known contingent liabilities at the reporting date.

9.  Related-party transactions

The Treasury Solicitor is the Crown’s Nominee. The Crown’s Nominee Accounts are administered by the Bona Vacantia Division of the Government Legal Department in England and Wales, and by the Crown Solicitor’s Office in Northern Ireland. The Crown’s Nominee Accounts pays administration costs each year to the Government Legal Department and the Crown Solicitor’s Office.

The administration costs paid to the Government Legal Department for 2021-22 were £4.9m (2020-21: £4.8 million), and at 31 March 2022, trade and other receivables, Note 4, included £224k relating to the fees which will be reimbursed during 2022-23 (2020-21: £222k, reimbursed in 2021-22).

The administration costs paid to the Crown Solicitor’s Office were £93k (2020-21: £184k).

Neither the Crown’s Nominee, key managerial staff nor other related parties have undertaken any material transactions with the Crown’s Nominee Accounts during the year.

10.  Events after the reporting period

In accordance with the requirements of International Accounting Standard (IAS) 10, events after the reporting period are considered up to the date on which the Accounts are authorised for issue. This is interpreted as the date of the Independent Auditor’s Report. There have been no events that would have a material impact on the financial statements for the year ending 31 March 2022.