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What is a clearance certificate and why does the court need it for me to get my money?

What is a clearance certificate and why does the court need it for me to get my money?

You may be excused for thinking that if a public body was holding money on your behalf that they would hand it over without any hassle. Unfortunately, when it comes to the Scottish Courts and Tribunals Service, it is not as straightforward as many would hope. The court, as a public body, have to follow strict procedures to ensure they can legally release money they hold. One important procedure for the court is that they must check there are no taxes due on the funds they hold.  What is a clearance certificate and why does the court need it for me to get my money?

The court can, most commonly in cases of division and sale (where one joint property owner requires the court’s intervention to sell a property without the other owners consent) end up holding funds on behalf of parties. In order to satisfy themselves that funds can be released the court will ask for a “clearance certificate” from HMRC confirming same. However, HMRC do not have any readily available published information on how to obtain the certificate and can be difficult to obtain information from via telephone or email with a variety of differing departments.

It is possible to obtain the certificate by writing to HMRC and confirming, by signed documentation that you undertake to pay any and all taxes and duties that may be due and payable on the sum.

Upon receipt of the clearance certificate, confirming that all income tax and other duties (with the exception of estate duty, capital transfer tax, inheritance tax, and VAT) payable to HMRC in respect of the consigned sum has been paid, you are now free to ask the court for your money. A motion would be required to be lodged alongside the clearance certificate requesting release of sums held by the Scottish Courts & Tribunal Service due to you together with the appropriate fee. Upon receipt of this, the court should release the funds.

Our firm acted on behalf of clients struggling to get release of funds from the court. Whilst the court can guide they cannot provide advice. We were able to successfully obtain the required certificate from HMRC and secure release of the funds after they had been held by the court for a significant amount of time prior to our intervention.

Should you require any assistance with obtaining a clearance certificate or any other court related matters, you can do so by contacting our experienced team.

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Written by : Neil Matheson