Funeral plan trust accounts - reporting standards

Funeral plan trust accounts - what are the reporting standards?

Didn't find your answer?

OK - I know I am out of my depth here and will be getting actual advice on this but I feel I should know a bit before I start talking to specialists on it.

My client is in the process of setting up a funeral plan business (this was starting before Corona - not a blatant cashing in I might add!). Funeral plans don't need regulation by the FCA if effectvely the money is held in trust (FSMA2000 Chapter XIV para 60).

Part iv of para 60 states: (iv)annual accounts must be prepared, and audited by a person who is eligible for appointment as a company auditor under section 25 of the Companies Act 1989 (30), with respect to the assets and liabilities of the trust;

So my questions are:

  1.  is what is the reporting standard/framework for the annual accounts? Is there a SORP (like in pensions?). Are we talking FRS102 - any additional disclosures
  2. Can the trust be a company - maybe limited by guarantee

I'm really struggling to find answers on this. ICAEW technical basically said get specialist advice, which I will, but I'm just trying to work out what area we are even talking about. I'm not that familiar with trusts. I'm aware they are not technically a legal entity or person like a company would be, but an arrangement (I could be wrong).

We will be looking for auditors for this so happy to talk offline if this is something that you specialise in and you have a view that you would like to share

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By paul.benny
22nd Mar 2020 09:12

There was consultation last year about bringing these plans within the remit of the FCA. A brief search didn't come up with any conclusions from the consultation - but presumably in due course these plans will come under the remit of the FCA. The complication here would seem to be that some providers may not otherwise be financial services businesses (eg if a funeral director offers a prepaid plan).

The risk for your client is that they set something up now which has to be changed once there is a new regulatory regime in place.

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