The inclusion of pensions in IHT calculations from April 2027 is expected to increase financial pressures on estates potentially increasing the number of estates facing significant liabilities warn the Council for Licensed Conveyancers (CLC) in its latest Risk Agenda 2026 published this week.
The conveyancing and probate regulator warned IHT changes are expected to create “practical challenges for personal representatives”, especially where estates are asset-rich and cash-poor, with funds tied up in property or investments pending probate. This could lead to greater demand for short-term estate funding solutions to pay IHT pending estate administration, and beneficiary advances providing early access to inheritance funds; with the potential to raise risks around regulatory complexity, conflicts of interest and firms straying into financial advice said the CLC.
Firms are advised to: “Understand the limits of their regulatory permissions and avoid undertaking unauthorised financial services. Any referral or ancillary activity must remain genuinely incidental to the legal service being provided, properly supervised, transparent to the client and compliant with both CLC requirements and applicable financial services legislation.”
The annual Risk Agenda provides an outline of the CLC’s current view of the principal risks facing the conveyancing and probate sectors. In its introduction, the report says its central message is: “compliance is not simply a matter of having policies on paper. Practices must be able to demonstrate that policies, procedures and standards are embedded in everyday decision-making and working practices. This requires effective leadership, suitable training, proper supervision, reliable records and a willingness to identify and address weaknesses before they cause harm.”
Alongside conveyancing and porbate specific matters, the report addresses professional ethics, complaints handling, accounts code compliance and file storage amongst other issues.
Tackling the rapidly developing area of AI, The CLC warns its adoption is “reshaping how legal services are delivered” adding firms cannot afford to stand still. But, the report goes on to say, AI introduces new considerations for firms including accuracy and reliability of AI-generated outputs, transparency with clients over its use, and the risk of overreliance on AI “eroding professional expertise over time.”
Firms are advised to take a “structured, systematic approach to adopting new tools” to include an assessment of suitability and interoperability with existing systems, data protection considerations, and ensuring staff are properly trained. The CLC recommends outputs are reviewed by a “competent individual” with an understanding of the legal implications: “technology should support, not replace, professional judgement” adds the report.
For conveyancers, post-completion is an area of “close scrutiny” said the regulator with the quality of applications, and the number of requisitions, remaining under close scrutiny. The issue is now part of CLC inspections. The characterisation of the work as ‘post-completion’ can create a misleading impression that it is administrative or secondary said the CLC. At a time of greater scrutiny on lawyers’ ethics, it says: “The CLC expects practices to treat application accuracy as a core professional responsibility.”
Deputy chief executive of the CLC, Stephen Ward says: “Rewarding though the work is, the high levels of risk associated with conveyancing and private client matters should always be at the front of our minds. Practitioners understand this and we are pleased that generally we see very high standards across the board.
“But in busy practices, small issues can quickly become big ones if not tackled and the Risk Agenda forms part of our strategy to inform the profession of the regulatory hot spots. Prevention and assisted compliance are core to our philosophy – practitioners know this and so regularly engage with us to ensure they continue to operate in the best interests of their clients and the public at large.”
