Legal Practice Notes

So far there has been no fully convincing judicial definition of a charity, though the ordinary person likely has a fair sense of what it means. The common thread in the various definitional efforts is that it involves a gift and is directed to general public use. Yet, gifts are not invariably for public use, which is why a gift must serve a charitable purpose. A purpose is not charitable unless it satisfies the public use ('benefit') test. That public benefit test has been expressed as the proposition that it must benefit the community, or a segment of the community; conversely, a trust is not charitable if it delivers only private benefits. Accordingly, even where a client appears to fall within a charitable purpose heading, they may still be refused registration as a charity if the public benefit requirement cannot be met. For...

There is no general exemption from VAT for Charities While a blanket VAT exemption does not exist for charities, specific VAT provisions mean that, in some circumstances, outputs supplied by charities can be treated as zero-rated or exempt, which in turn may influence input tax recovery. Pinning down the precise VAT treatment is often challenging, as the catalogues of zero-rated and exempt supplies are wide-ranging and complex. Under the Value Added Tax Act 1994 ( VATA 1994), two schedules apply— Schedule 8 (covering zero-rating) and Schedule 9 (exemptions)—each set out in groups that are further broken down into items, many accompanied by detailed notes (‘the devil is in the detail’). Areas that are particularly pertinent to charities include: specific items zero-rated for charities education subscriptions donations and grants admission charges fundraising activities ...

Why are the SDLT anti-avoidance provisions important? The stamp duty land tax ( SDLT) anti-avoidance regime contained in section 75A of the Finance Act 2003 ( FA 2003) first appeared in the Pre- Budget Report 2006 and was later put on a statutory footing as primary legislation by the Finance Act 2007 in an expanded form, being FA 2003, ss 75A–75C (referred to collectively in this Practice Note as 's 75A'). The measures were brought in to deter the apparently substantial volume of SDLT planning arrangements deployed across both commercial and residential land transactions in the United Kingdom. They have effect for disposals occurring on or after 6 December 2006, subject to transitional provisions. Instead of closing SDLT planning arrangements one structure at a time through amendments to particular parts of the SDLT code, the chosen policy was to adopt a 'mini general...

The templates in this document are drawn from the material in Part 2, Chapter 15 of Cretney and Lush on Lasting and Enduring Powers of Attorney. This paper provides model wording suitable for use in property and financial affairs lasting powers of attorney ( LPAs). For alternative wording relevant to health and welfare LPAs, see: LPA precedent instructions and preferences—health and welfare LPAs. For wording that can be included in either property and affairs or health and welfare LPAs, see: LPA precedent instructions and preferences—property and financial affairs and health and welfare LPAs. For guidance on instructions and preferences, see Practice Note: LPAs—instructions and preferences. Triggering event—evidence of mental incapacity ' My attorneys may exercise this authority only after they have obtained a written medical opinion confirming that I am no longer mentally able to manage and administer my property and financial...

Section 1(1)(e) of the Inheritance ( Provision for Family and Dependants) Act 1975 Section 1(1)(e) of the I( PFD) A 1975 functions as the broad fallback where the other gateways do not accommodate a prospective applicant. Yet a claim on this basis is restricted by the obligation to show that, immediately prior to death, the deceased was maintaining the applicant, in whole or in part. Recognising how testing this can be, from 1 October 2014 the Inheritance and Trustee's Powers Act 2014 refined the evidential threshold. An individual is treated as maintained only where the deceased made a substantial contribution, in money or money’s worth, towards that person’s reasonable needs, excluding any contribution provided for full valuable consideration under a commercial arrangement. The expression being maintained appears only in I( PFD) A 1975, s 1(3). Some further assistance is found in I( PFD) A 1975, s 3(4), which the...

Penalties on late paid inheritance tax ( IHT) Although interest frequently accrues on unpaid tax, missing the payment date for certain taxes can also lead to a penalty. For details about interest that accrues on overdue liabilities, see Practice Notes: IHT—payment deadlines on death— Interest on IHT and Interest on late paid tax. A range of late payment penalty regimes operates across different taxes. This Practice Note looks at penalties for late paid inheritance tax, and records that there is presently no dedicated IHT penalty regime in force. Finance Act 2009 ( FA 2009) brought in a late payment penalty framework intended to harmonise the rules across the taxes. Its implementation is staged and, while it already applies to many taxes, it does not yet extend to overdue IHT. It should also be noted that, for income tax...

Including hotchpot provisions in Wills can help balance what beneficiaries receive, equalising benefits between beneficiaries. The hotchpot rule also applies on a partial intestacy where death occurred before 1 January 1996; see Partial intestacy below. The use and purpose of a hotchpot clause The testator should be advised about the potential use of a hotchpot clause in three particular situations, namely: where trust beneficiaries might obtain benefits via a power of appointment over the fund where advances have been, or are expected to be, made to beneficiaries during the testator’s lifetime by the testator where the testator forgives debts owed to them For the first situation, the Will may include a hotchpot provision requiring any class member receiving an appointment to bring that benefit into account, so that they credit that share before they can participate in any unappointed part of the...

Unless an institution is set up solely for charitable purposes, it cannot be a charity. Statute (the Charities Act 2011 ( CA 2011)) provides guidance: for the law of England and Wales, a charitable purpose is a purpose that falls within section 3(1), and is for the public benefit (see section 4). Accordingly, the definition adopts a two-limbed approach; the first limb requires a proposed purpose to align with a defined list, and the second concerns public benefit. That list is far more substantial and encompassing than earlier lists, and is considerably broader and more inclusive than those that preceded it......

Introductory observations Claims for knowing receipt (sometimes termed ‘unconscionable receipt’) and dishonest assistance are often grouped as ‘accessory liability’ because they target a defendant implicated in causing the claimant’s loss in an ancillary or secondary capacity. Liability may arise by dishonestly helping another to breach a trust or fiduciary obligation owed to the claimant, or by receiving trust property with knowledge that it follows a breach of trust or fiduciary duty. In this way, the defendant’s potential responsibility is secondary to the principal wrongdoing of the breach. That said, Lord Burrows in Byers v Saudi National Bank considered that a personal claim in knowing receipt is materially different from the accessory nature of a dishonest assistance claim ( Byers is discussed further below). Dishonest assistance and knowing receipt claims frequently emerge where there has been some fraudulent or wrongful conduct in which the...

Once the Will has been drafted, the solicitor must arrange for the client to sign it, with the signing properly witnessed. For guidance on the formal requirements for a valid Will, see Practice Notes: Requirements for a valid Will— Formalities and Validity of Wills—signature. Practical considerations for signing the Will There are typically two ways to execute the Will: signing at the office of the drafting solicitor, under their supervision, or the testator signing at home. The home option is generally not advised, as signing before the solicitor gives greater assurance that all formalities have been met. If execution has to take place without the solicitor present, the solicitor must give the testator clear, detailed directions. This is usually provided via a standard form sent with the Will. The form can be in any layout the solicitor selects, so long as it sets out key...

A ‘sub-fund’ exists where specified trust assets are held on terms that are separate and distinct from those applying to the rest of the trust property. A single trust may comprise any number of such sub-funds, each subject to its own terms. Ordinarily, the same people act as trustees for all the trust assets; however, different trustees can be appointed to manage one or more particular sub-funds. One trust or more? For example, trustees of a discretionary trust might use part of the fund to buy a property for a beneficiary to live in. Using their overriding powers, they grant that beneficiary an interest in possession and a right to occupy the home for life, for as long as they wish to remain. When that interest comes to an end, the property reverts to the original discretionary provisions. For the duration of the interest in...

What a residuary gift comprises A residuary estate need not consist solely of cash; it typically encompasses other assets left unsold during the course of administration. Section 33 of the Administration of Estates Act 1925 ( AEA 1925) describes the residuary estate as the residue of money and any investments then representing it, and includes any part of the deceased’s estate retained unsold that is not required to satisfy funeral, testamentary and administration expenses, debts, other liabilities, and pecuniary legacies. This applies whether: the testator tried to dispose of it but did not succeed, or the disposition fails by lapse or another event Unless the Will indicates otherwise, a residuary gift covers everything the testator owns at death that has not been effectively disposed of by other provisions in the Will. A distinction is drawn between: a gift of the residuary estate a gift of the...

In Thorner v Major, Lord Walker opened his judgment by citing Simon Gardner’s Introduction to Land Law (2007), observing that no definition of proprietary estoppel manages to be both exhaustive and beyond dispute, and that many efforts have achieved neither. This was Lord Walker’s opening point. He went on to note that most commentators concur that the doctrine rests on three core ingredients, though phrased in varied ways, as they put it differently: an assurance or representation made to the claimant; the claimant’s reliance upon it; and detriment suffered by the claimant as a result of that (reasonable) reliance. The overarching requirement, or touchstone, is unconscionability: unless holding the promisor to the promise would be unconscionable, the court will grant no relief. Once a right to relief is established, the court must devise an appropriate remedy. That question was central in the Supreme...

What does this Practice Note cover? It is not solely banks and financial institutions that engage in derivative transactions; a wide range of entities—such as companies and universities—also participate. This naturally brings into focus a party’s capacity to enter into derivatives. The legal questions around capacity in the derivatives sphere are intricate and require careful analysis. Parties will wish to be confident that their counterparty has capacity to enter into the transaction, as a lack of capacity may result in the agreement being void from the outset on ultra vires grounds. This Practice Note explains: the principal issues to consider when assessing, in general terms, an entity’s capacity to enter a derivatives transaction; the key points to review when evaluating a signatory’s authority to execute derivatives documentation; and matters relating to the most common types of...

What is a company's constitution? This Practice Note sets out what is meant by a company’s constitution in detail. It focuses on the core element of that constitution: the articles of association. It reviews the statutory definition under the Companies Act 2006, outlines the character of the articles and distils the typical provisions found in a company’s articles. The Practice Note also addresses entrenched terms within the articles and the importance of the memorandum of association......

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime Finance Act 2025 ( FA 2025), which obtained Royal Assent on 20 March 2025, introduces legislation to end the remittance basis and bring in a residence-based system from 6 April 2025. FA 2025 also replaces domicile as the principal determinant of inheritance tax liability. Additional measures include: revisions to the rules for excluded property status, the removal of protected settlement status for offshore trusts, and alterations to overseas workday relief. For detailed guidance, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates ( Finance Bill 2025) and Finance Act 2025. Major reforms to the taxation of offshore trusts took effect in 2017 and 2018, summarised in Practice Note: Changes to the taxation of...

Stop Press: Section 49 and Schedule 7 of the Finance Act 2026 revise the UK’s domestic rules concerning UK permanent establishments of non‑ UK companies, taking effect for accounting periods (for corporation tax purposes) or tax years (for income tax purposes) beginning on or after 1 January 2026. The changes update the definition of a UK permanent establishment and the provisions dealing with the attribution of profits to a UK permanent establishment, in each case aiming to bring the position more closely into line with the OECD Model Tax Convention. They also modify how the investment manager exemption operates. For further information, see News Analysis: Budget 2025— Tax analysis — International. This Practice Note explores the concept of a permanent establishment ( PE) for tax, under UK domestic law and within double tax treaties ( DTTs). A company that is not...

Key issues in respect of privacy, confidentiality and publicity in the Court of Protection It is fundamental to the rule of law that justice is not merely delivered but plainly seen to be delivered by all. As a general rule, hearings should be open to the public and the media, save in exceptional circumstances, in order to respect Article 10 ECHR (freedom of expression). At the same time, both the common law and Article 6 ECHR (the right to a fair trial) allow hearings to depart from open court in cases concerning children and other vulnerable people. Until quite recently, the default position in family matters and in the Court of Protection was to sit in private, with only limited scope for reporting. Proceedings before the Court of Protection frequently involve the most intimate, fundamental and private issues, and there is a...

This Practice Note This Practice Note sets out the actions to take for SDLT once it has been confirmed that a transaction is chargeable. For an explanation of what a land transaction is, what amounts to acquiring a chargeable interest, and when a chargeable transaction arises, see Practice Note: Land transactions, chargeable interests and chargeable transactions. For additional guidance on notifying land transactions, see Practice Note: SDLT—administration and compliance. From 1 April 2015, SDLT no longer applied to any land transaction involving interests in or over land in Scotland. From that date, land and buildings transaction tax ( LBTT) has applied to those transactions, subject to transitional provisions. As a result, references in this Practice Note to ‘ UK land’ or similar expressions, when considering the scope of SDLT, should be interpreted as excluding any interests in or over land in Scotland from 1 April 2015. For...

It is fairly common for a minor — that is, someone under 18 (formerly termed an infant) — to have a claim to a deceased person’s estate. Yet that minor cannot obtain a grant in respect of the estate while they remain under age, for example where they have been named as an executor, or stand next in the priority order for a grant of letters of administration on intestacy, or for a grant of letters of administration with Will annexed. Consequently, subject to the circumstances, a different person must take the grant for the interim until the minor reaches 18. What is ‘minority’ The Family Law Reform Act 1969 lowered the age of majority from 21 to 18, and that change applies to any deed, Will or other instrument (other than a statutory provision) executed on or after 1 January 1970. Where there is an...