The draft Bill to expand the dormant assets scheme administered by the Dormant Bank and Building Society Accounts Act 2008 is gradually making its way through Parliament. As the name of the 2008 Act suggests, the current scheme only accepts funds from dormant bank and building society accounts.
According to the Government, expanding the dormant assets scheme will have the potential to unlock an estimated £880 million for social and environmental causes. Since the scheme’s inception almost 15 years ago, contributions have exceeded £1 billion. The 2008 Act restricts the English allocation of dormant assets to youth schemes, financial inclusion and social investment funding. The Bill intends to remove these restrictions, replacing them with broader provisions to be introduced by secondary legislation once a statutory consultation has occurred. This will bring England in line with Scotland, Wales and Northern Ireland’s schemes.
The Bill will allow the addition of dormant assets from insurance, pensions, investments and wealth management schemes. Importantly, any non-cash assets will need to be liquidated before being transferred into the dormant assets scheme.
The Bill also seeks to clarify the meaning of “dormant” in relation to each type of asset class, setting out clear conditions that must be satisfied before participants can transfer dormant assets into the scheme. For example, in relation to dormant insurance proceeds, the four conditions are:
- That the “responsible institution” (in this case, the insurance company) has been notified that the person in respect of whom the proceeds are payable has died and it is satisfied that there is no person to whom the proceeds are payable.
- At least seven years have passed since the company was notified that the person died and it has not received any communication since then from anyone administering the estate of the deceased or the person to whom proceeds are payable.
- The company is satisfied that the person in respect of whom the proceeds are payable would be at least 120 years old and it has not received any communication from anyone administering the estate of that person or the person to whom the proceeds are payable during the past seven years.
- The proceeds have become payable by virtue of the insurance contract term ending, a period of at least 7 years has passed since the end of that term, and the company has not received any communication from the person to whom the proceeds are payable since that time.
These stringent definitions are designed to ensure that there is almost no chance that the owner of an unclaimed asset is still alive. By widening the current scheme to many more types of asset, we hope that significantly more funds become available to a range of good causes.
If you would like to speak to a member of the charities team regarding the donation of any type of asset to a charity or a charitable cause, please contact us here.