Legal Practice Notes

Why capital losses are important The CGT bill is worked out by totalling all chargeable gains arising to the taxpayer in a tax year and then deducting any allowable losses for that individual. Losses realised during the year are ordinarily offset against gains made in that same year, thereby lowering the amount of gains exposed to tax for that period under the statutory rules in force for CGT. Where they are not used in this manner, such losses are typically carried forward to relieve the next available gains of later tax years. That said, particular situations can mean those losses are blocked, limited, taken back to earlier years, or, in some cases, treated as if they were income tax losses (see below). If a taxpayer faces more than one CGT rate within a single year, they may decide which gains are reduced by their...

This Practice Note sets out how trustees should make payments of income tax or capital gains tax ( CGT) once it is confirmed that they are responsible for those amounts. Tax is collected in several ways: deduction at source throughout the year payments on account of income tax calculated by reference to the liability for the preceding tax year balancing payments for the year (overall tax due less amounts already deducted at source or paid on account) For guidance on the income tax payable by trustees, see Practice Notes: Interest in possession trusts—income tax and Discretionary trusts—income tax. For guidance on CGT payable by trustees, see Practice Note: CGT—basic principles for trusts. Income tax—payments on account Payments on account of income tax will be needed where the trustees’ liability is not largely satisfied by tax deducted at source. This arises where the trust...

FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework: From 2027, stamp duty and SDRT will be brought together into a single, self-assessed charge on securities—the securities transfer charge ( STC)—which will be paid and reported via a new online portal. The STC’s key features are expected to broadly align with the proposals consulted on in 2023. Finance Bill 2026 contains an enabling power commencing on Royal Assent to make secondary legislation that will allow taxpayers to pilot the digital service. This will permit self-assessment of stamp taxes on securities liabilities and electronic reporting of transactions through the digital platform. For more on the modernisation of stamp taxes on securities, see: News Analyses: Budget 2025— Tax analysis— Stamp and transfer taxes Tax update spring 2025— Stamp taxes on shares modernisation Tax update spring 2025— Tax analysis— Stamp and transfer taxes TAMD 2023— Stamp taxes on shares...

Follow the link below to obtain the training presentation. Contents Execution Lack of testamentary capacity Lack of testamentary capacity—continued Lack of testamentary capacity—evidence Lack of knowledge and approval Undue influence Undue influence—continued Fraudulent calumny Fraudulent calumny—continued Proprietary estoppel Proprietary estoppel—continued......

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime Finance Act 2025 ( FA 2025), which gained Royal Assent on 20 March 2025, enacts the abolition of the remittance basis of taxation and introduces a residence-based system from 6 April 2025. FA 2025 also removes domicile as the principal test when determining liability to inheritance tax. Other updates include: amendments to the rules that set excluded property status, abolition of the protected settlements status for offshore trusts, modifications to overseas workday relief. For analysis of these measures, 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. This Practice Note explains the tax position of individuals who own a UK residential property, used as a home, through an...

Capacity to sell Trustees of land possess, in relation to the land comprised in the trust, all the powers that an absolute owner would enjoy as if they held the title outright. A purchaser from trustees does not need to be concerned with whether the trustees have complied with their obligations under the Trustees of Land and Appointment of Trustees Act 1996 ( TOLATA 1996). In the case of registered land, the trustees’ power to sell can be qualified by the registration of a standard Form A restriction. Such an entry may appear to limit their ability to dispose; however, where the beneficiaries’ interests are overreached, this will ordinarily be sufficient for HM Land Registry to remove the restriction, without any further action required from the buyer. Overreaching A purchaser of land from trustees will not be affected by the trusts on which the land is held if the...

Testators have freedom to dispose of their estates as they wish, subject to the formal requirements for making a Will, the requirements of testamentary capacity and statute. A person may opt not to leave a Will, in which event their estate passes under the intestacy regime. Since 1938, statute has imposed artificial limits on testamentary freedom. Today, those constraints sit in the Inheritance ( Provision for Family and Dependants) Act 1975 ( I( PFD) A 1975), as amended. Its effect is that a testator—along with the Will drafter and personal representatives—must recognise that dependants may bring claims against the estate, which can sharply limit the testator’s freedom. Nor is it enough to rely on intestacy rules, as they too are open to statutory intervention under I( PFD) A 1975. Accordingly, from 1 April 1976, where someone dies domiciled in England and Wales and is...

A lack of due execution A failure to ensure due execution is a recognised basis for contesting a Will. Under CPR 57.7(4), any party asserting that a Will was not duly executed must state that case specifically and supply particulars of the facts and matters relied upon. To be effective, Wills of those who died before 1 January 1964 had to comply with the execution requirements in the Wills Act 1837 ( WA 1837). For deaths on or after that date, the Wills Act 1963 ( WA 1963) offers relief from the strictness of the earlier legislation. Amendments introduced by the Administration of Justice Act 1982 ( AJA 1982) further extend limited relief to testators who make execution errors, but only where death occurs on or after 1 January 1983. As amended, the formalities now provide that a Will is not valid...

Admitted to probate Before deciding which assets require a grant so they can be dealt with (see Practice Note: Devolution of assets and the need for a grant), it is, where there is a Will, essential first to establish whether that instrument can in fact be admitted to probate. Once that is settled, the personal representatives ( PRs) must identify and safeguard the assets ahead of obtaining a grant. In the interim, the PRs should assess how far they are able to progress the administration of the deceased’s estate before the grant is issued. The Wills Act 1837 ( WA 1837) prescribes the formalities for a valid Will capable of being admitted to probate. On the face of it, any document created by a person aged 18 or over, with full capacity, and executed in accordance with the WA 1837...

Conditions of incorporation A testator may treat as part of their Will a separate document that they have not formally executed, using the doctrine of incorporation by reference, even if that document is unattested. Before that doctrine operates, the document to be brought in must be: in existence at the time the Will is made referred to as being in existence clearly identified There are exceptions. The document need not be testamentary in form or character. The document must be in existence at the time the Will is made. It cannot post-date the making of the Will. It must already exist when the Will is executed; it cannot be something to be created later. The burden of proving the document’s identity and its existence as at the date of the Will rests on the party invoking the doctrine. In other words, the...

FORTHCOMING CHANGE: Following the Government’s reply to the Ministry of Justice and the Office of the Public Guardian ( OPG) consultation, Modernising Lasting Powers of Attorney, the Powers of Attorney Bill secured Royal Assent on 18 September 2023 and is now the Powers of Attorney Act 2023 ( PAA 2023). The PAA 2023 brings amendments to the Mental Capacity Act 2005 ( MCA 2005) to deliver a more modern lasting power of attorney ( LPA) service. The updates comprise: Regulations enabling those creating an LPA to choose to sign either digitally or in hard copy; Removing attorneys’ ability to register an LPA so that registration is restricted to the donor; Regulations setting out identification verification requirements for registration applications; A single route for registration objections to the OPG, with an expanded category of persons able to object, including third parties and not...

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime The Finance Act 2025 ( FA 2025), which obtained Royal Assent on 20 March 2025, legislates to end the remittance basis and introduce a residence-based regime from 6 April 2025. FA 2025 also makes residence, rather than domicile, the principal criterion for inheritance tax exposure. Other amendments include: Changes to the rules defining excluded property status Abolition of protected settlements status for offshore trusts Revisions to overseas workday relief For details on these measures, 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. This Practice Note examines the effect of TCGA 1992, s 86 and Sch 5, which attribute the gains of a non-resident...

Before a Will can be admitted to probate, the court must be satisfied that the testator knew and approved its contents at the time of execution. Where testamentary capacity and due execution are established, a prima facie presumption of knowledge and approval arises. Even so, the court may require further affirmative proof, particularly where: the testator has a serious infirmity such as blindness or deafness, or is illiterate there is a mistake or inadvertence in the drafting of the Will the circumstances surrounding the drafting and/or execution create suspicion, eg where the person preparing the Will takes a benefit ( Butlin v Barry) The court will not now assume knowledge and approval simply because the Will was read over to a capable testator or its contents were otherwise notified; there is no inflexible rule shutting off further enquiry,...

This practice note considers the doctrine of undue influence in challenges to the validity of a Will. It will address: what undue influence is how undue influence in Wills differs from lifetime transactions the burden of proof the standard of proof the relationship between undue influence and fraudulent calumny the relationship between undue influence and other bases for contesting the validity of a Will how to plead undue influence practical guidance for running undue influence claims What is undue influence? A Will is only valid if it satisfies the relevant execution formalities and is substantively valid. A Will procured through undue influence lacks substantive validity because the disposition does not represent the testator’s true intentions. Rather, the testator’s disposition has been secured by coercion or fraud. The distinction between undue influence arising from coercion and from fraud is...

Enduring powers of attorney Since 1 October 2007, it has no longer been possible to set up an enduring power of attorney ( EPA). This follows the repeal of the Enduring Powers of Attorney Act 1985 ( EPAA 1985) by the Mental Capacity Act 2005 ( MCA 2005). However, EPAs made before that date are not invalidated if the donor later loses mental capacity. Instead, they can still be relied upon by the attorneys, provided they are registered with the Office of the Public Guardian. Accordingly, earlier EPAs remain capable of operation once that formality is satisfied. Issues can still emerge about the level of capacity needed to create or revoke an EPA—which is distinct from that for a lasting power of attorney ( LPA)—and, in particular, whether the donor had capacity at the point of execution. The common law presumption of...

The basic rule for valuation of property for IHT purposes For inheritance tax ( IHT), property is assessed by reference to its open market value at the relevant time, meaning: the amount the asset could reasonably achieve on a sale in the open market at that date without assuming any reduction simply because the entire property is brought to market at once This is referred to as the open market value test. For more detail on valuing assets for IHT and the associated principles, see Practice Note: IHT—valuation principles and particular types of property. This approach applies when assessing property for IHT purposes. How are liabilities taken into account for inheritance tax? When determining the value of an individual’s estate to calculate IHT on death, the personal representatives ( PRs) may deduct the deceased’s debts and liabilities. In general, liabilities are likewise deductible when valuing an...

In many cases, particularly where death occurred before 1 January 2022, personal representatives ( PRs) cannot obtain a grant of representation until they have submitted an inheritance tax ( IHT) account to HMRC, providing complete particulars of the relevant property and its values to the best of their knowledge and belief, and until HMRC has confirmed payment of the IHT due and any interest by issuing a unique code and the estate figures to be included in the probate application. PRs of estates with no IHT liability that satisfy the conditions for an excepted estate do not need to file an IHT account with HMRC; instead, they may supply the required valuation information to HMCTS Probate when applying for a grant of probate or letters of administration. For more on the procedure for obtaining a grant, see Practice Note: Application for a grant of...

This considers the legal rules engaged when parties are in civil dispute over the disposal of a deceased person’s body, including transporting the body out of the jurisdiction, the timing and method of disposal, and the ceremonies to be observed. Unsurprisingly, the emotions involved in such disagreements are often intense. Entitlement to possession of a corpse In English law, as Kay J stated in Williams v Williams, ‘there can be no property in the dead body of a human being’. Consequently, any direction in the deceased’s Will instructing the executors to hand the body to another individual had no effect. Generally, the same approach applies to body parts, as affirmed in R v Kelly, although that case acknowledged exceptions. As a general statement, the principle that a corpse cannot be owned remains sound. Rather than rights comparable to property in chattels,...

The basic position Beneficiaries of a deceased individual’s estate understandably want confidence that the personal representatives ( PRs) are administering matters effectively, and will often hope to receive what is due to them under the Will or intestacy without delay. Executor’s year Section 44 of the Administration of Estates Act 1925 ( AEA 1925) affords executors and administrators a full year from the date of death before beneficiaries can demand any distribution. There are occasions when PRs will be unable to distribute for considerably longer than this executor’s year and can legitimately justify postponement. Rights of beneficiaries during the administration While the estate is being administered, title to the deceased’s unadministered assets rests with the PRs for the purposes of administration, without any division between legal and equitable interests. In the meantime, no beneficiary-whether taking under a Will or by...

Regulatory regime overview Advertising in the UK is governed by legislation alongside self-regulatory industry codes, chiefly the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing ( CAP Code) and the UK Code of Broadcast Advertising ( BCAP Code) (outlined below). Self-regulation plays a central role in the UK; however, broadcast advertising operates within a statutory framework under the Communications Act 2003 ( CA 2003). Marketers should also be mindful of sector-specific rules and codes. The principal laws addressing unfair or misleading commercial practices, which also inform the CAP and BCAP Codes, include: Chapter 1 of Part 4 and Schedule 20 to the Digital Markets, Competition and Consumers Act 2024 ( DMCCA 2024) The Business Protection from Misleading Marketing Regulations 2008 ( BPR 2008), SI 2008/1276 Consumer protection from unfair trading From 6 April 2025, Part 4, Chapter 1 of the DMCCA 2024 largely repealed the Consumer...