A conveyancer receives £10,000 from a buyer client to cover SDLT. The firm uses £3,000 of it to pay an unrelated disbursement for a different client. Which rule is breached?
Answer and explanation
Correct answer: A. Client money held for one client must not be used for another client's matter
- Step 1: Each client's money is held on trust for that client.
- Step 2: Using one client's money for another is a serious breach of the Accounts Rules, as client accounts must never be overdrawn on an individual ledger.
Answer
Client money held for one client must not be used for another client's matter.
Why not the others: There is no 24-hour allowance; secrecy makes it worse; office costs cannot be paid from client money.
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