Legal Practice Notes

Need for a grant The personal representatives ( PRs) of a deceased person’s estate will ordinarily need to secure a grant of probate or letters of administration to confirm title to the deceased’s property and to manage, realise and safeguard it for those with an interest in the estate. Although a grant is generally required to deal with an estate in England and Wales, it may not be needed depending on the nature and value of the assets and where they are held. See Practice Note: Devolution of assets and the need for a grant. The civil mechanism to address a failure to obtain a grant is a citation. Where an executor has already begun acting in the estate’s administration, they can be obliged to take probate. See Practice Note: Probate...

This Practice Note should be read alongside Practice Note: Trustees and data protection—part one. It reviews the data protection framework under the Data Protection Act 2018 ( DPA 2018), the EU General Data Protection Regulation, Regulation ( EU) 2016/679 ( EU GDPR), which applied from 25 May 2018, and the UK-specific iteration of the EU GDPR that has applied in the UK from 11 pm on 31 December 2020 ( Retained Regulation ( EU) 2016/679, UK GDPR). It also addresses equivalent provisions (where relevant) from the former Data Protection Act 1998 ( DPA 1998) regime. For fuller guidance on DPA 2018, see the Data protection regime subtopic. Data Protection Act 2018 With effect from 25 May 2018, DPA 1998 was repealed and the UK data protection landscape is now consolidated within the GDPR ( EU and now UK) and DPA 2018. DPA 2018 is a...

Part 7 or Part 8? Before April 2007, the practice direction accompanying CPR 8 stated that if, prior to 26 April 1999, a High Court claim had been commenced by originating summons, it should thereafter be brought under the Part 8 procedure. As claims under the Trusts of Land and Appointment of Trustees Act 1996 ( TOLATA 1996) were issued by originating summons before 26 April 1999, it was long assumed that Part 8 was the appropriate route. The current practice direction to Part 8, however, now clearly sets out the categories of claim that may start under Part 8, and that list excludes TOLATA 1996 claims. Consequently, proceedings ought to be issued under Part 7 unless there is unlikely to be any significant factual dispute of substance, or a rule or practice direction requires or allows the use of Part 8. Where the...

The general anti-abuse rule (the GAAR): neutralises, by way of just and reasonable adjustments made by HMRC or the taxpayer, any tax advantage that would, absent the GAAR, arise from abusive tax arrangements; and has been in force since 17 July 2013 (the date of Royal Assent to the Finance Act 2013), except that, for National Insurance contributions, it has applied only from 13 March 2014. This Practice Note: describes the Finance Act 2021 measures that adapted the standard GAAR procedures for partnerships; explores the GAAR’s purpose; sets out when the GAAR applies and examines: the meaning of tax arrangements and tax advantages; the taxes within scope; what is “abusive” for GAAR purposes; and the GAAR penalty; outlines taxpayer safeguards built into the legislation; explains how the GAAR interacts with other...

This Practice Note sets out practical guidance on the correct execution of simple contracts and deeds by administrative receivers... Quick view The summary below outlines the execution formalities relevant to administrative receivers and points to the location of matching precedent execution clauses. For more detail, navigate to the document type using the links in the first column... Document type: Simple contracts By the company ( Companies Act 2006, s 43(1)(a)): Using the company’s common seal, applied by the administrative receiver under the power in the debenture under which they are appointed — Execution clause—administrative receiver—contract ( Option 2). By the administrative receiver’s signature under the power granted in that debenture, signing in the presence of a witness — Execution...

Sufficient funds To assess whether the settlor will retain adequate resources to support themselves after establishing a trust, the advising solicitor should carefully consider, in particular: the type and overall worth of the assets to be settled the type and overall worth of the property that will remain with the settlor the income expected to arise from the settlor’s retained property Accordingly, you may wish to invite the settlor to complete a detailed assets and liabilities questionnaire requesting particulars of their holdings and debts, including current valuations and whether any assets are held jointly. When a settlor is contemplating creating a trust, taxation is frequently not their chief concern. Nevertheless, it is vital that the tax implications of the trust are fully appreciated. See Practice Note: Introductory guide to the taxation of trusts. Drafting lifetime trusts A trust must have some identifiable property from the very outset to serve as the...

This Practice Note explores title restrictions under the Land Registration Act 2002 ( LRA 2002). It examines why and how a restriction is placed on a title, the circumstances for its entry or removal, the prescribed restriction forms, who can seek one, and the steps for compliance. It further addresses the use of restrictions to safeguard beneficial interests in land, such as under a trust of land or where property is co-owned. What is a restriction? A restriction is a register entry that controls the conditions under which a disposition of a registered estate or charge can be entered on the register. bar registration of any disposition, or a particular class of disposition operate without limit, or for a fixed duration stated in the restriction remain in force only until a named event occurs, for example service of notice or receipt of...

If a Will is sensible, in standard form and appears to have been properly signed, the following presumptions arise: due execution capacity knowledge and approval Presumption as to due execution The court will assume due execution where a Will looks, on its face, to be correctly executed, relying on the maxim omnia praesumuntur rite esse acta (all things are presumed to be done in due form). This can be overturned, but only with very strong proof. The court demands the most cogent evidence to conclude a Will was not executed in accordance with the Act when it appears regular and clearly embodies the testator’s wishes. Judges are slow to reject such apparent compliance on extraneous material, since memories of events years earlier are often unreliable. To do otherwise would risk defeating the testator’s intentions, which they took care to formalise in a manner that...

The right not to be unfairly dismissed is a purely statutory entitlement deriving from section 94 of the Employment Rights Act 1996 ( ERA 1996). There are various eligibility criteria and exceptions. The onus of showing the relevant qualifying conditions are met generally rests with the claimant. An unfair dismissal complaint falls within the sole jurisdiction of the employment tribunal (that is, it cannot be pursued in the courts) and must ordinarily be brought within three months of the effective date of termination (see Practice Note: Effective date of termination). The time limit: is extended where a prospective claimant is subject to mandatory early conciliation (see Practice Note: The early conciliation requirement— Extension to time limits (the ‘stop the clock’ provisions)) may be enlarged by the tribunal if it was not reasonably practicable to present the claim in time (see...

Conversion into sterling It is a fundamental rule that, to calculate UK tax, every item of income and gains must be presented in sterling. Where receipts are in a foreign currency, or assets are purchased or sold in another currency, those amounts must be converted into sterling. Accordingly, you need to fix a conversion date and identify the exchange rate applicable on that date... The general position is that trustees of UK resident trusts are taxed on foreign income on the arising basis. When foreign income is taxed on the arising basis, the exchange rate to use is that prevailing on the date the income arises. If the income arises regularly across the year, it is acceptable to apply an average annual rate. Where a life tenant of a trust claims relief under the foreign income and gains ( FIG)...

FORTHCOMING CHANGES: At the 2025 Budget on 26 November 2025, the government stated it would introduce small corrective alterations to the residence-based tax regime outlined in Finance Act 2025......

The pre-owned asset tax ( POAT) is an inheritance tax ( IHT) counter-avoidance provision, brought in by Schedule 15 to the Finance Act 2004 ( FA 2004), and was intended to penalise users of IHT avoidance arrangements, though its reach goes wider than such planning in practice. POAT operates as a standalone yearly income tax charge on particular individuals, termed ‘chargeable persons’, specifically in respect of advantages they obtain as a former owner of property, or of assets traced from that property. The advantage may, for example, consist of occupying land, using or holding chattels, or having the ability to draw income or capital from a settlor-interested trust that contains intangible property. The statutory wording can be somewhat unclear at points. Nonetheless, as FA 2004, Sch 15 is designed to defeat structures under which a taxpayer enjoys assets that no longer form part of their estate for IHT, any...

FORTHCOMING CHANGE: The Finance Bill 2025–26 proposes rules that will draw unused pension pots and death benefits into a deceased member’s estate, and therefore into the inheritance tax ( IHT) net, from 6 April 2027. It should be noted that these changes will not extend to death‑in‑service payments to active employees in relevant employment, nor to a dependant’s scheme pension (that is, a DB scheme pension for a spouse or dependant). The usual exemptions, including those for spouses and civil partners, will continue to apply. Liability for settling the IHT will principally sit with the personal representatives of the estate. For more detail, please see Practice Note: Inheritance tax and pensions; News Analyses: HMRC— Reforming inheritance tax—unused pension funds and death benefits; HMRC confirms new IHT rules on unused pension funds to apply from 6 April 2027; and HMRC policy paper:...

FORTHCOMING CHANGES: At the 26 November 2025 Budget, the government set out minor corrective adjustments to the residence-based tax regime introduced by the Finance Act 2025. Key points include: new entrants eligible for the foreign income and gains ( FIG) regime must be at least 10 years old at the start of the tax year claims for relief under the FIG rules can be set only against the specific foreign income, foreign employment income, or foreign gains to which they relate alignment of the qualifying asset holding company ( QAHC) rules so that carried-interest-style returns linked to services for a QAHC qualify for FIG relief a correction to the capital gains tax ( CGT) residence test for personal representatives, ensuring they are not UK resident where the deceased was non- UK resident but treated as a long-term UK resident for inheritance tax purposes a requirement for an...

A unilateral credit against UK inheritance tax ( IHT) can be claimed when property has been subjected to a tax comparable to IHT in a territory outside the UK. HMRC sets this out in the Inheritance Tax Manual at IHTM27185. Information for particular jurisdictions is available in the International Q& A guides— Private Client subtopic. When does unilateral relief apply? It chiefly operates for territories where double tax relief is not available. If the UK has a double tax treaty with the other territory, double tax relief for IHT applies instead. Both mechanisms aim to prevent the same asset being charged to inheritance or estate taxes in both jurisdictions. Double taxation can occur because: jurisdictions tax by reference to different factors (for example, the residence, domicile or nationality of the deceased or the heirs, or the location of assets). Some may apply more than one of...

GOVERNMENT CONSULTATION : The government is consulting on proposals to require close companies to give HMRC more granular information about transactions with participators (usually shareholders). In scope are: Cash withdrawals Loans Debts Dividends Other distributions Asset transfers Items already reported via RTI, such as salary, would be excluded. Reported data would set out the recipient, amount, date, and identifying details, potentially including NI numbers. Views are sought on the scope, timing and delivery method (for example via CT600A, the company tax return, or a digital service), whether repayments, releases and write‑offs of loans should be included, and whether existing penalties are adequate or bespoke penalties are needed. The consultation closes on 10 June 2026. Introduction and summary of main rules Without specific rules, a company controlled by a small number of persons could structure its affairs to enable those persons to...

Power of court to appoint new trustees This Practice Note outlines the purpose and process of section 41 of the Trustee Act 1925 ( TA 1925), which gives the court power to appoint or replace trustees in specified situations. As a remedy of last resort, this Practice Note sets out when that jurisdiction might be engaged. It also reviews alternative options open to practitioners and differentiates between the scope of TA 1925, s 41 and the court’s inherent power to remove trustees. Under TA 1925, s 41 the court has a statutory power to appoint a new trustee, either instead of, or in addition to, those currently acting. TA 1925, s 41 states in effect that, whenever it is expedient to appoint a new trustee or trustees, and it is found inexpedient, difficult, or impracticable to do so without the court’s...

This Practice Note examines how the Money Laundering, Terrorist Financing and Transfer of Funds ( Information on the Payer) Regulations 2017, SI 2017/692 ( MLRs) apply to financial services firms. It includes: a high-level outline of the legislation guidance and regulatory expectations linked to the MLRs the MLRs’ obligations relating to: risk assessments, policies, controls and procedures staff training customer due diligence ( CDD), including enhanced due diligence ( EDD) and simplified due diligence ( SDD) beneficial ownership information, the UK register of trusts, and reporting discrepancies in registers the statutory framework of the MLRs—background and reform Key points Key points to note: the MLRs span a broad range of...

Trustee’s checklist The trustee should address the following: Termination of the trust Note key termination triggers, eg a beneficiary attaining 25 Review tax planning in advance of termination Confirm the validity of termination paperwork Check and record the termination date Accounts and liabilities Locate and settle all liabilities Finalise outstanding tax obligations Prepare closing accounts Distribution of assets Confirm the beneficiaries List the trust assets Determine each beneficiary’s entitlement Secure a release, discharge or indemnity Distribute assets and transfer legal title See also: Trustees' checklist on the termination of a trust. Methods of terminating a trust Subject to the terms of the particular trust, an express trust can generally be concluded in the following ways: The settlor invokes a power to revoke The disposition of property into the trust is set aside Expiry of a...

Prepare the claim form The claimant must complete Form N208, setting out clearly and in full: confirmation that CPR 8 governs the procedure; the issue for the court to determine, or the relief sought together with the legal foundation for claiming that relief in the claim form; where reliance is placed on a statutory provision, identification of that enactment, for example the Inheritance ( Provision for Family and Dependants) Act 1975; if the claimant proceeds in a representative role, what that role is and how it applies; if the defendant is pursued in a representative role, what that role is. The defendants should comprise the deceased’s personal representatives and any beneficiaries who need to be joined as necessary parties. Ordinarily, residuary beneficiaries are added, as they are the most likely to be impacted by any order. It can also be...