Net proceeds of sale meaning

See Q&A: A and B are beneficiaries under a Will, and B holds a life interest in a property. A now wishes to sell the property and split the net sale proceeds equally with B. How can A bring B’s life interest trust to an end? B has learning difficulties. It is understood the Will directs that certain assets are to be held on trust for B (the sister) for life, with the remainder to pass to A (the client). Where every beneficiary of a trust is of full age and has mental capacity, they can jointly require the trust to be terminated and the assets transferred to them accordingly...

What is land pooling and what is this type of structure used for? Put simply, land pooling is where a number of landowners collaborate to promote their land for development and to divide both the promotion costs and the sale proceeds. The objectives are two-fold: to encourage co-operation between owners to bring a site forward for development to secure an equitable split of costs and returns The principal tax consideration is capital gains. Imagine landowners A and B each own 50 acres and agree to share expenses and sale proceeds on a 50/50 basis. If A sells first, he pays capital gains tax (or corporation tax if a company). A then pays 50% of his net proceeds to B as an ‘equalisation payment’. That payment is not deductible in computing A’s capital gains tax (CGT) position. To prevent equalisation payments being taxed twice, a tax-efficient pooling structure is needed. How is a land pooling arrangement typically structured? There are three...

In this issue: Probate Court of Protection UK taxes for Private Client HMRC Manuals updates Insolvency—Private Client Digital assets and cryptoassets Contentious trusts and estates International Question of the week Additional Private Client updates this week HMLR updates Practice Guide 1 and form FR1 Daily and weekly news alerts LexTalk®Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Latest Q&As Useful information Probate Direct payment scheme for IHT—extended to investment providers The direct payment facility enabling personal representatives to settle inheritance tax (IHT) from the deceased’s funds has been widened to include investment providers. See: LNB News 01/10/2024 8. Court of Protection Complex clinical issues and avoiding delay in SMT applications (Re PG, Serious Medical Treatment) In this ruling, Mr Justice Cobb analyses the intricate and demanding clinical considerations around investigating and treating suspected gynaecological cancer...

This Practice Note examines the principles governing the tort whereby a defendant deliberately interferes with a claimant’s rights in a judgment debt. For wider guidance on enforcing judgments, see: Introduction to enforcement—overview and related content. What is the Marex tort? The Marex tort describes a tort-based cause of action premised on an alleged intentional infringement of the claimant’s rights in a judgment debt. Its contours were first confirmed by Bryan J in 2021 in Lakatamia v Su, having been raised by Knowles J in 2017 in Marex v Garcia (also known as Marex v Sevilleja). See: Marex tort—history below. In Lakatamia v Su, Lakatamia pursued two claims against the defendants, Mr Su and his mother, Madam Su, including: unlawful means conspiracy—alleging a concerted plan to harm Lakatamia by unlawful means, through breaches of a 2011 worldwide freezing order in related Commercial Court proceedings against Mr Su (the Blair Freezing Order), by procuring the dissipation of two of Mr Son’s assets: the net sale proceeds...

Where a fixed charge receiver acts for the seller in disposing of a property, the overriding aim is a ‘clean deal’. This means that, on completion, both the receiver and the appointing mortgagee will know the exact sum due to the mortgagee after deducting sale costs and expenses, with no post-completion claims against: the receiver (and the mortgagee where the mortgagee is transferring the property—see Practice Note: Overreaching by a mortgagee) the net sale proceeds payable to the mortgagee This outcome is secured by transferring risk to the buyer and excluding the receiver’s personal liability. Sales information pack and pre-contract enquiries Buyers should recognise that, as the receiver is not the property owner and may have been appointed only recently, the receiver will hold very limited information about the asset. The position is especially challenging where the property is let and has been managed by the mortgagor or by managing agents. In practice, receivers may be able to gather helpful details...

Family office The expression ‘family office’ spans numerous circumstances and there is no universally settled definition. Nonetheless, the Family Firm Institute characterises a family office as a distinct vehicle, separate from the trading business (and sometimes formed using proceeds realised after disposing of a family company), holding a diversified wealth portfolio for the family’s benefit (Family Enterprise; understanding Families in Business and Families of Wealth, Wiley 2014, not reported by Lexis+®). Family offices are, in the main, and almost exclusively, the domain of high net worth—and more commonly ultra high net worth—families with varied assets and intricate affairs. Such intricacy can generate the prospect of disputes. Still, with a well thought-out, carefully considered framework, supported by coherent strategy and family governance mechanisms, a family office can deliver substantial advantages. These accrue not only to the family members concerned but, through their collective philanthropic efforts, to wider society. Typical elements of a family office include: a portfolio of investments beyond a core family enterprise (frequently arising from...

Scenario A: Politically exposed person You are instructed by a new client to act on the acquisition of a football club. He is a high-net-worth individual whose wealth was generated through mining in an emerging market, later entering politics before returning to private ventures. In line with the firm’s policy, enhanced due diligence was undertaken and his status as a politically exposed person was identified. When questioned on source of funds, he stated the purchase would be financed from the sale proceeds of a former mining enterprise. Throughout the engagement he has proved challenging, frequently altering his instructions without coherent justification. A junior lawyer has also flagged a recent press report alleging he bribed officials to secure the mining concessions underpinning his fortune. In addition, during his political career he was linked to an expenses scandal...

1 Legacy of House I leave to [ insert full name ], of [ insert full address ], my share and interest in the dwelling at [ insert main residence address ], or in any substitute that serves as my principal home, the determination of which shall rest solely with my trustees, free from heritable liabilities and costs of conveyance, along with contents, embracing all my items for personal, domestic, household, garage, garden or leisure use, ornament or consumption, save for those separately left by me elsewhere. Should I not own the subject of this bequest at the time of my death, I leave to the said [ insert legatee details ], a pecuniary legacy in a sum equal to the net sale proceeds for which I will have disposed of my said interest, the amount of such sum being determined exclusively by my trustees accordingly...

Scenario A: Politically exposed person A prospective client has contacted you seeking assistance with acquiring a football club. He is a high‑net‑worth individual whose wealth stems from mining operations in an emerging market. He amassed considerable assets before entering public life, then moved into politics and later chose to focus again on private business interests. In line with the firm’s policy, enhanced due diligence (EDD) was undertaken, which identified him as a politically exposed person (PEP). When questioned about the source of funds, he stated the acquisition would be financed entirely from the proceeds realised on the sale of one of his former mining companies. Throughout the retainer he has proved challenging, repeatedly attempting to revise his instructions without any clear rationale. A junior lawyer has also drawn attention to a recent press report alleging he used bribery to obtain the mining concessions on which his wealth was founded. Moreover, during his time in public office, he was linked to an expenses scandal...

For the purpose of this Q&A, we have assumed that: the asset concerned is a residential dwelling property A and B hold either a freehold estate, or a leasehold granted for a term exceeding seven years A occupies a different dwelling as A’s only or principal residence, in which A has a freehold or leasehold interest A and B are not civil partners of one another and/or are separated in circumstances that are likely to be permanent A is not acquiring B’s interest as part of any business activity of buying and selling dwellings carried on by A the trust to be declared by B in favour of A will take the form of a bare trust arrangement completion of A’s acquisition will take place on or before 31 March 2021 As A’s share of the dwelling, in monetary terms, is £225,000, A will need to provide consideration of £220,500 to B to secure a 99% beneficial interest...