IEIM721130 - Legal Professional Privilege

Lawyers are not exempted from making disclosures under these rules. Nothing in the Regulations requires a lawyer to disclose information which is subject to legal professional privilege (LPP), but a lawyer may have to make a disclosure where the information to be reported is not covered by privilege.

Where a lawyer is an intermediary but information that would be reportable is covered by LPP, the lawyer will not have to make a report. Instead, they must notify their client, if their client is another intermediary or reportable taxpayer, of the obligation to report in accordance with regulations 3(2) or 7(2). This must be done as soon as is reasonably practicable after the lawyer becomes aware that the arrangement needs to be reported.

Where a lawyer notifies their client (whether that client is a reportable taxpayer or another intermediary in relation to the arrangement) that the arrangement is reportable, the client may waive LPP, allowing the report to be made by the lawyer on their behalf. LPP must be waived in time to allow the lawyer to make the report within the relevant time limits (see IEIM740010 and the following pages.).

Any such waiver can be limited by the client so as to apply only to the extent necessary to enable the lawyer to comply with the disclosure obligation.

If the client does not wish to waive LPP, then the reporting obligation will fall on the client who has been notified if the client is an intermediary or reportable taxpayer.

Where a lawyer notifies another intermediary of the reporting obligation, that intermediary must take that notification into account in determining whether it needs to make a report.

Where a lawyer is marketing an arrangement, the lawyer cannot assert legal privilege. This means that such marketing is subject to the disclosure obligation and the lawyer should disclose the arrangement to HMRC in the normal way.