Court Funds rules change: interest and FX, Jan 2026

From 19 January 2026, the way courts in England and Wales look after money paid into court becomes clearer. The Court Funds (Amendment) Rules 2025 spell out how sterling and foreign currency are invested and how interest is added, fixing a defect in S.I. 2023/987. These changes apply to funds held for claimants, children and protected parties.

If you’re new to this, a “fund in court” is money paid to the court while a case is ongoing or after it ends-for example, damages for a child, security while a dispute is resolved, or sums that cannot safely be paid to someone yet. The Court Funds Rules 2011 set the framework and the Accountant General manages those funds until a court says otherwise.

Here’s the headline for sterling deposits: interest now accrues daily and is credited without deducting income tax. In plain English, the court will add interest gross. Whether you owe any tax depends on your personal situation, so keep records and, if needed, ask for tax guidance.

For foreign currency deposits, the rules say the money should sit in an interest‑bearing account in that currency that allows withdrawals at any time, unless the court (or, in Court of Protection cases, an authorised deputy or investment manager) directs something different. If that currency can’t be used, the Accountant General must ask the court what to do.

How and when interest is added now depends on the type of money you hold. For foreign currency, interest follows the account’s own terms and is normally added when the bank credits it, when the money is reinvested, or when the account is closed. Any bank charges for placing the currency are paid from that foreign currency account. Dividend payments received in a foreign currency are converted into sterling and invested, unless a court, deputy or investment manager says otherwise.

Investment routes are tidied up too. Rule 14 is clarified to cover investment ‘in sterling’, while the old rule 16-previously used for foreign currency-has been removed, with its useful parts moved into the updated rules on interest and investment. In short, sterling and non‑sterling now have their own clear treatment.

There’s also a practical tweak to how money is paid out after an offer is accepted in civil cases. Rule 27 now lets the Accountant General act on a written request from the claimant or written confirmation from the defendant that funds in court can satisfy the offer; where electronic processes are enabled, authenticated electronic requests and confirmations can be used. A previous requirement for certain executor paperwork is removed, cutting delay for families handling estates.

What this means for you: if a child’s settlement or a protected party’s funds are held in euros or dollars, you should expect interest according to the bank’s terms rather than a daily rate, and you’ll see charges taken from that foreign currency account. If you hold sterling, interest builds up daily and is paid gross. Ask your solicitor or deputy to confirm which rules your account falls under and whether any directions are in place.

Before 19 January 2026, it’s sensible to check your paperwork. Confirm whether your fund is recorded as sterling or a specific currency; ask who bears bank charges on foreign currency accounts; note that dividends paid in another currency will usually be converted to sterling unless someone with authority decides otherwise; and remember that gross interest may still be taxable depending on your allowances. If you’re accepting a settlement offer, ask whether an electronic request can speed up payment.

Key dates and sign‑offs matter in law. These rules were made on 4 December 2025, laid before Parliament on 8 December 2025, and come into force on 19 January 2026. They were made by the Lord Chancellor, David Lammy, with the concurrence of His Majesty’s Treasury-signed by Gen Kitchen and Taiwo Owatemi as Lords Commissioners. The rules extend to England and Wales.