Balances held by law firms

This guidance is intended for law firms to follow when the client or owner of held funds are untraceable, or when the funds are considered abandoned, and the firm seeks to remit the funds as bona vacantia to the KLTR.  

The KLTR accepts the following as bona vacantia at common law: 

• A cash legacy or residue payment due to an individual under a Will, or a payment due under the Scots law of intestacy, if the entitled individual is known to exist and we are given evidence to satisfy us that they cannot be traced. 

• Miscellaneous client balances from solicitors or others. 

If, after reviewing the following guidance, you decide to refer funds in your possession to the KLTR, please complete and submit a referral form for consideration. Our referral forms, prepared in conjunction with the Law Society of Scotland, require you to provide evidence of reasonable endeavours before the KLTR will accept funds. For practice units regulated by the Law Society of Scotland, the form must be signed by the Designated Cash Room Manager or on their behalf.  

If you are holding funds for a dissolved company, these guidelines do not apply. Such funds automatically pass to the Crown by operation law under the provisions of the Companies Act 2006. In these cases, please follow our guidance available via the following link: Dissolved company funds | KLTR.

The KLTR will accept funds due to an untraceable individual or group of individuals (e.g., trustees) as bona vacantia under common law if we are satisfied that reasonable efforts have been made to locate the true owner.

Our determination of what constitutes reasonable efforts will vary depending on the situation. Factors considered include but are not limited to: 

• Age of the residual balance  

• Amount held  

• Availability of client’s details  

• Costs associated with tracing methods.  

Whenever feasible, and regardless of the amount, we expect you to thoroughly review your client file and use all available contact information to reach your client (or the owner of the funds, if different). For amounts exceeding £50, we expect you to consider carrying out additional searches to locate the owner, such as: 

• An internet search  

• A Directory Enquiries search  

• If a previous address is available, an Electoral Register search in the appropriate area.  

For larger amounts, consider instructing a tracing agent or placing an advert in a newspaper or other publication. If a tracing agent is employed, include a copy of their report with your referral to the KLTR. 

If you seek to refer funds due to an untraceable client or owner, please complete the Untraceable Owner of Funds referral form available at the following link. When filing out the form, provide a detailed account of your efforts to locate the owner. Include any supporting evidence, such as copies of correspondence or records of attempts made.

If you are administering a deceased person’s estate and hold funds for several beneficiaries who cannot be traced, you must complete a separate form for each beneficiary and the amount due to them.  

If you are treating the funds in your possession as abandoned by their owner, such as when the owner has been traced but attempts to transfer the funds have been unsuccessful, the KLTR will consider accepting the funds as bona vacantia. We generally expect that multiple attempts have been made to transfer the funds to the intended recipient over an extended period. 

Your firm should determine the necessary practical steps to manage any such funds held. However, when sending funds by cheque, consider including the following details in your correspondence: 

1. Expected Cashing Date: The date by which you expect the cheque to be cashed. 
2. Abandonment Confirmation: If the recipient fails to cash the cheque by that date or make contact, you will treat the funds as abandoned and remit them to the KLTR. 

For larger amounts, we expect additional efforts, such as attempting a personal visit to the recipient or instructing sheriff officers to deliver a cheque.  

If direct contact has failed, consider publishing notices in local newspapers or other public forums to reach the owner. 

If you hold funds due to an individual or group of individuals and you consider the funds to be abandoned, please complete the Abandoned Funds referral form available at the following link. When filing out the form, provide a detailed explanation of why you consider the funds abandoned. Include any supporting evidence, such as copies of correspondence or records of attempts to transfer the funds to the owner.

If you are not a firm of solicitors but are holding a cash balance you believe is bona vacantia, please contact the KLTR Office by email at enquiries@kltr.gov.uk and provide full details including the amount you are holding.