Legal Practice Notes

This guide outlines the rules and requirements for the execution of deeds across multiple international jurisdictions. A table offers a quick-reference overview and summary of the execution formalities for companies, individuals and partnerships in a range of countries. Further detail on each overseas jurisdiction listed in the table appears in the sections that follow, including any variations in limitation periods for claims under contracts made as a deed. Each section corresponds to the overseas jurisdictions shown in the table for reference. For the execution of contracts across jurisdictions, see Practice Note: Execution of contracts—jurisdictional guide. For electronic signatures in different jurisdictions, consult Practice Note: E-signatures—jurisdictional guide. For the formation of contracts across jurisdictions, refer to Practice Note: Contract formation—jurisdictional guide. For the execution of documents under Scots law, see Execution— Scotland—overview. Note that this is an introductory resource only; seek local advice from...

Electronic signatures This Practice Note sets out the legal position on electronic signatures—also called digital signatures, e‑signatures, E‑ Signatures, e Signatures, paperless signing or electronic document signing. It explains the categories of electronic signature and the technology used to generate digital signatures, including public key infrastructure ( PKI). It reviews key UK legislation such as the Electronic Communications Act 2000 ( ECA 2000) and the UK e IDAS Regulation, and outlines best practice for executing documents by electronic means. An electronic signature functions as the digital counterpart to a handwritten signature, connecting an individual with the contents of an electronic document. The Note focuses on the general law in England and Wales for commercial contracts in a business‑to‑business context. Readers should be aware that particular transactions may present distinct issues, for example due to laws applicable to consumers. For practical guidance on signing when one or more...

This Practice Note applies to the majority of applications to the Court of Protection. However, a separate process applies when seeking to appoint a property and financial affairs deputy in such cases within the Court of Protection context. From January 2023, the upfront notification route became the default for all property and affairs deputyship applications, after a successful pilot. As outlined in Practice Direction 9H, applicants must tell the person who is the subject of the application and also three individuals who know that person, using the combined notification and acknowledgement forms, COP14PADep and COP15PADep, and obtain their replies before lodging the application. All replies, together with any records of notifications, should then be promptly filed with the court at the same time as the completed application. If applying via the online portal, no COP1 application form is then needed. If applying on paper, include all...

Section 18 of the Inheritance Tax Act 1984 ( IHTA 1984) Section 18 sets out an inheritance tax ( IHT) exemption for transfers of value between spouses and civil partners. The spouse exemption is unrestricted, except where a transfer—whether during lifetime or on death—is from a long-term resident ( LTR) spouse to a spouse who is not LTR; in that case, the exemption is limited under IHTA 1984, s 18(2). From 6 April 2025, long-term residence replaced domicile for determining liability to IHT. An individual qualifies as LTR if they have been UK resident for at least ten of the 20 tax years immediately preceding the tax year in which an IHT charge arises. A person may still be LTR even with periods of non- UK residence within that 20-year span, so long as their cumulative UK residence is at least ten...

This Practice Note outlines how trustees of bare trusts are treated for income tax and capital gains tax ( CGT). Although, in equity, a bare trust is a form of trust, for both income tax and CGT its existence is disregarded. As a result, no liability to tax sits with the trustees for either income or chargeable gains. Instead, the two regimes look through to the beneficiary, who is assessed at their own rates of tax. Income tax The legislation in the Income Tax Act 2007 ( ITA 2007), which sets out the settlements rules for income tax, excludes bare trusts from those provisions. Several provisions in ITA 2007 treat actions carried out by a bare trustee as though they were undertaken by the absolute beneficial owner......

The principal legislation defining relief for company charitable donations sits squarely within Part 6 of the Corporation Tax Act 2010 ( CTA 2010). There are five core routes for a company to give to charity, namely the following options generally available: making donations of money donating equipment and trading stock items donating land, property and shares temporarily seconding employees sponsoring a charity Donating money A limited company that is not itself a charity can legitimately reduce its corporation tax when it gives money directly to a charity or Community Amateur Sports Club ( CASC). The amount gifted is ordinarily deducted from total business profits before tax. However, you cannot deduct the following: loans that will be repaid by the charity payments made on condition the charity will buy property from the company or anyone connected with it a...

Double tax treaties or conventions ( DTTs) Double taxation treaties, also called conventions ( DTTs), possess a twofold character. They operate both as: agreements between nations (the contracting states) under the discipline of international law, and elements of the contracting states’ domestic legal systems Accordingly, a DTT functions concurrently at the international level and within national legislation. Consequently, they are interpreted through both international and domestic public law, with the canons of international public law prevailing where conflicts arise. This duality has led courts in different jurisdictions to craft their own interpretative approaches. In any dispute, the international layer outranks domestic interpretative rules. This has seen judges adopt varying techniques of construction across jurisdictions. Countries embed international agreements into national law in distinct ways: some automatically give a treaty domestic legal force upon signature and ratification, so it immediately becomes part of national...

Duty to mitigate loss after wrongful dismissal This Practice Note sets out a claimant’s obligation to reduce their loss by taking sensible measures to secure fresh employment after being wrongfully dismissed. It explains the practical operation of this duty in the context of wrongful dismissal claims. It highlights when this duty lapses. It addresses: the reach of the duty to mitigate when the duty will not apply the effect of an offer to reinstate the claimant to their former role the outcomes of a failure to mitigate the burden of proof in such matters A wrongfully dismissed employee must take reasonable steps to mitigate their loss, usually by making genuine efforts to obtain another job. Where they do find alternative work, they must give credit to the former employer for salary and benefits earned in that role. Reasonable costs incurred while...

This Practice Note sets out practical guidance on how unincorporated charities execute documents. For details on execution by incorporated charities, refer to Practice Note: Execution formalities—incorporated charities. We offer a comprehensive, interactive collection that helps users identify and navigate the concepts and common issues in document execution, including deeds. Each stage includes practical guidance, precedent clauses and Q& As tailored to that stage. For further detail, see the Execution collection. Capacity Unincorporated charities lack a separate legal personality; consequently, the entity itself has no rights or duties and cannot own property in its own name. Property that appears to ‘belong’ to an unincorporated charity is vested in the organisation’s leading members, who act as trustees and hold it on trust for the remaining members. Accordingly, the individuals with authority to enter into arrangements and to execute documents are the trustees or members of the...

Practice Note Anyone carrying on a business who is registered, or required to be registered, for UK VAT (a taxable person) must comply with fairly onerous VAT obligations. Accordingly, understanding precisely when a person becomes a taxable person is essential. This Practice Note covers: compulsory and voluntary registration determined by the value of taxable supplies; and compulsory registration, effective from 1 December 2012, for non- UK established businesses (described as non-established taxable persons ( NETPs) in HMRC’s guidance) that make supplies of goods or services in the UK It does not address the VAT registration rules applicable to: the disposal of goods for which a VAT repayment is or has been claimed UK businesses that previously benefitted from the distance selling rules but may, following Brexit, be required to register for VAT in EU Member States businesses in Northern Ireland (identified using the ‘ XI’...

This Practice Note is about the tax treatment of limited partnerships In general, the fiscal treatment of limited partnerships broadly mirrors that of general partnerships (see Practice Note: Taxation of general partnerships). A limited partnership is transparent for tax purposes; it is not a taxable person in its own capacity. Rather, the partners are charged to tax on their respective shares of the firm’s profits and gains, and can obtain relief for corresponding shares of its losses, whether or not those profits and gains are actually distributed to them. That said, there are specific tax rules that apply to limited partners (and at times to partners in a general partnership who conduct themselves as if they were limited partners), and these are considered in this Practice Note. Note also that the rules concerning the utilisation of losses by a limited partner are set out in...

Tax treatment of general partnerships This Practice Note outlines how general partnerships are treated for tax. A partnership of this kind is not chargeable to tax in its own right. Instead, the partners are taxed on their respective portions of the partnership’s profits and gains and may claim relief for their share of any losses, whether or not profits and gains are actually distributed to the partners. Consequently, a general partnership is often described as transparent for tax purposes, or simply ‘tax transparent’. In summary, taxing a general partnership involves three steps as follows: calculating the partnership’s taxable profits allocating to each partner their share of that taxable profit according to the partnership’s profit-sharing arrangements assessing each partner’s share of the partnership’s profits to corporation tax or income tax For this Practice Note, and in tax legislation generally, a partner means an equity...

Legalisation Most papers that a notary public or a scrivener notary attest are intended to have effect in a country or jurisdiction outside England and Wales. Legalisation is the method by which one state, eg England and Wales, confirms to another state, ie the receiving jurisdiction, that the signature and seal of a public official, such as a notary, are genuine, following checks against its register. As the receiving jurisdiction has no independent means of knowing whether the notary’s seal and signature are authentic, the notary’s signature and seal may need to be legalised by the Foreign, Commonwealth and Development Office ( FCDO) and, on occasion, a foreign Embassy, Consulate or High Commission, to evidence the notary’s status. The process is complex and varies with the receiving jurisdiction’s requirements, so specialist advice should always be...

Trust property that carries a qualifying interest in possession ( QIIP) can become liable to inheritance tax ( IHT) in these circumstances: when the life tenant (the beneficiary holding the interest in possession) dies where the life tenant dies within seven years of a transfer or a lifetime ending of their interest following a transfer or conversion of the interest into a non-qualifying or discretionary interest For more on QIIPs, see Practice Note: The meaning of qualifying interest in possession. Property over which a QIIP subsists is not relevant property, so it is not exposed to principal and exit charges during the trust’s life. See Practice Note: The meaning of relevant property for details. Death of the beneficiary with the qualifying interest in possession On the death of the beneficiary with the QIIP (the life tenant), the trust property is valued and...

‘ Disabled trust’ A ‘disabled trust’ receives preferential inheritance tax ( IHT) treatment. Access to this concession depends on meeting specific qualifying conditions. Eligibility requires the trust to be a type permitted under section 89 of the Inheritance Tax Act 1984 ( IHTA 1984), as amended, and to have a qualifying disabled beneficiary. Before the Finance Act 2006 ( FA 2006), disabled persons’ trusts were little known among practitioners. FA 2006 moved most life interest trusts—particularly inter vivos arrangements rather than those set up by Will—into the relevant property regime. Consequently, for many families the IHT effects of transferring assets to a life interest trust mirrored those already applied to discretionary trusts. Chief among these was a 20% entry charge on amounts above the nil-rate band ( NRB) for IHT (£325,000 in England and Wales up to 5 April 2023). Trusts holding more than the NRB...

Charities face money laundering ‘attacks’ just as much as any other organisation. Trustees must safeguard their charity against these attempts and, to identify them, they need to fully understand the offences that can occur. What is money laundering? Money laundering is a criminal act, commonly defined as the process of transforming the proceeds of crime into assets or money that can be used legitimately and openly without attracting suspicion. The term ‘laundering’ reflects how criminals convert ‘dirty’ funds into ‘clean’ money, which can then be folded into the legitimate economy as if obtained lawfully. See Practice Note: Money laundering—key information for businesses. The offences The Proceeds of Crime Act 2002 creates a range of money laundering offences and applies to all persons, across the board. See Practice Note: Proceeds of Crime Act 2002—key information for businesses. While a single charity is unlikely to commit every possible offence, trustees should be aware of...

Ordinarily, a taxpayer may claim a capital loss on an asset only when it has been disposed of or completely destroyed. Where an asset has merely become worthless (ie of negligible value) but still exists, the normal rules do not permit a capital loss. For more information on claims for losses where assets are destroyed, see Practice Note: CGT—assets lost, destroyed or damaged. Negligible value claim Nonetheless, under section 24(2) of the Taxation of Chargeable Gains Act 1992 ( TCGA 1992), a taxpayer can ask for an asset they own to be treated as sold and immediately reacquired at the value stated in the claim. That amount is usually the asset’s market value and, in many cases, will be nil. Although ‘negligible value’ is not defined in legislation, HMRC considers it to mean ‘worth next to nothing’. The aim of the negligible value claim ( NVC) is to...

This Practice Note sets out the situations in which trustees of a settlement, or the personal representatives ( PRs) of someone who has died, can obtain principal private residence ( PPR) relief from capital gains tax ( CGT) in relation to property comprised in a settlement or within an estate for relevant CGT purposes. For a general explanation of PPR relief and its application to individuals, refer to Practice Note: CGT— PPR relief. Private residence occupied under the terms of a settlement Section 225 of the Taxation of Chargeable Gains Act 1992 ( TCGA 1992) widens the PPR exemption in TCGA 1992, s 222 so that it covers disposals of settled property where, for the trustees’ period of ownership, the dwelling-house has been the only or main residence of a person entitled to live there under the terms of the settlement. A...

Capital losses arising to trustees For trustees, capital losses are computed on the same basis as for individuals (for more detail on individual losses, refer to Practice Note: CGT—utilising capital losses). Losses are offset against gains in the same year of assessment in the way that produces the most advantageous result; any amount not relieved can be carried forward and set against gains arising in later years. Carry-back to an earlier year is not permitted. Brought-forward losses need only be used against subsequent gains to the extent needed to reduce that year’s gains to the applicable annual exemption, ensuring the allowance is not wasted. A formal claim is required for losses to be allowable, usually on the Capital Gains supplementary pages of the Trust and Estate Tax Return. The general time limit for claims and reliefs is four years from the end of the...

Secret trusts The enforcement of secret trusts has its roots in equitable principles. In these cases, it is not typically the Will itself that is in issue, but a specific disposition. Definition There are two recognised forms of secret trust: Fully secret trust: the named beneficiary appears to receive an absolute gift, yet has in fact agreed with the testator to hold the property on specified trusts. Half or semi-secret trust: the beneficiary is merely a trustee and the terms of the trust are not disclosed, or not fully disclosed, in the Will. There is also a distinct situation that likely falls between these, where the testator asks the beneficiary to deal with certain property in a manner already communicated, or to be communicated, without imposing a trust or legal obligation. In that circumstance the beneficiary takes outright. The fundamentals The key elements of a secret trust...