Legal Q&A

Under general principles of trust law, a beneficiary’s or settlor’s spouse may serve as a trustee of a settlement without any prohibition. More broadly, there are few limits on eligibility for appointment as trustee; any person with capacity in law to hold the legal title to the trust property can be lawfully appointed as a trustee of that property......

The working assumption is that the land concerned is residential freehold property in England or Wales, and that no tax avoidance is in point. SDLT treatment of the first 40% transaction As set out in Practice Note: Land transactions, chargeable interests and chargeable transactions, a land transaction with no chargeable consideration (for which see Practice Note: SDLT chargeable consideration) is outside the scope of SDLT, an exempt transaction......

This Q& A is relevant where there is no surviving joint owner of the property Where a joint owner survives, they can take all steps needed to obtain possession. In the absence of a surviving co-owner, an executor’s role is to put into effect the instructions left by the deceased in their Will. Ordinarily, to implement those provisions, the executor will first marshal the estate, then meet what is owed, and finally distribute what remains to beneficiaries in line with the Will’s terms. Gather in all assets; Settle the liabilities; and Distribute the Estate’s proceeds as provided by the Will. To facilitate this, the executor must be recognised as legitimate, which is achieved through a grant of probate. Save where the estate is straightforward and of minimal value (usually under £5,000), a grant will be needed to secure the release of funds from banks and...

It has been assumed that: A’s entitlement under the trust to a 50% interest in the property constitutes a qualifying interest in possession ( QIIP) A’s trust interest is not within section 5(1B) of the Inheritance Tax Act 1984 ( IHTA 1984) Releasing A’s interest in possession will bring the trust to an end B is not a settlor of the trust The cessation of the QIIP, together with A’s gift of the remaining 50% share, each amounts to a potentially exempt transfer ( PET) by A. These transfers become chargeable to IHT if A were to die within seven years. See Practice Note: Qualifying interest in possession trusts— IHT treatment, especially the section ‘ Ending of an interest in possession during beneficiary’s lifetime’. Taper relief, as well as A’s available nil rate band, may operate to lessen any IHT...

A lease is treated as surrendered when it is handed over to the immediate superior interest. Surrendering a lease entails both a disposal by the tenant and a corresponding acquisition by the landlord, and it gives rise to capital gains tax ( CGT) accordingly......

The burden of costs in connection with legacies depends on the type of legacy. For a discussion of the various types of legacy, refer to the further reading link to Williams on Wills, Part H, Contents of Wills, Chapter 30: Legacies. From that extract, a gift of property constitutes a specific legacy if it comprises particular property that forms part of the testator’s estate at death, is described with sufficient precision to be identified, and is set apart from the testator’s estate in general......

Much will turn on the exact provisions settled between the parties; for example, whether the essential component of child maintenance was set as a fixed sum with no top‑up payable at the time of the initial order because, at that stage, the payer’s earnings did not cross the relevant threshold. It will also matter whether, when that basic maintenance figure was determined, a 50/50 shared care regime was already in place and operating from the outset. The calculation used in the order appears to mirror the approach endorsed by Mostyn J in CB v KB, particularly at paragraph [49], where he indicated that in any case in which the non‑resident parent’s gross annual income does not exceed £650,000, the starting benchmark should be the output of the formula, disregarding the cap on gross annual income set at £156,000......

There are a number of points to weigh up when determining if a consumer credit agreement is regulated by the Consumer Credit Act 1974 ( CCA 1974). Under the CCA 1974, s 8(1), a consumer credit agreement is described as an agreement between an individual (“the debtor”) and any other person (“the creditor”) whereby the creditor extends credit of any amount......

It is not clear whether the donor holds a lasting power of attorney ( LPA) for property and affairs ( P& A), for health and welfare ( H& W), or both. As attorneys have determined that the donor’s home should be sold (necessitating a P& A LPA) and that the donor should move into a care home (necessitating a H& W LPA), we proceed on the basis that both LPAs exist and have been registered. We also proceed on the basis that there is more than one attorney. Where authority to act is several rather than joint, the lending attorney may opt out of any decision in which they have a conflict of interests. It is further assumed that: the donor had adequate capacity to enter into the loan the LPAs do not include specific instructions or...

The following Q& A addresses this question: Is a sole LPA attorney permitted to purchase real property from the donor where the donor lacks mental capacity? We also direct you to: Subtopic: Lasting powers of attorney—overview (and in particular, see Practice Note: LPAs—the attorney's duties and powers) Topic: Court of Protection Commentary: Re Buckley: The Public Guardian v C: Cretney and Lush on Lasting and Enduring Powers of Attorney......

This Q& A proceeds on the basis that: the question relates to a business-to-business transaction the question relates to a contract drafted and negotiated in the conventional manner and is not an e-commerce transaction entered into between the parties via website terms and conditions the question relates to the execution of a simple contract the question relates to the law of England and Wales Contract formation General contract law principles apply to agreements formed virtually......

A bequest in a Will of a laptop does not automatically include a bequest of the data contained on the laptop...

Accruer clauses See Williams on Wills [90,1]–[90.6]. Paragraph [90.6] explains that, even if the original portions are unequal, any share arising by way of accrual is to be taken in equal parts, rather than by reference to the ratios of the initial allocations, unless the will or settlement provides otherwise. This view is supported by Re Bower's Settlement Trusts, Bower v Ridley- Thompson. See also: Practice Note: Will interpretation—principles of construction Commentary: Whether conditions apply to shares received under accruer clauses: Halsbury's Laws of England [412]......

Broadly, in this context, an asset is assessed only for appropriation purposes by reference to that specific date (rather than the date-of-death valuation that applies for inheritance tax ( IHT) purposes)......

Section 15 of the Wills Act 1837 ( WA 1837) states: It provides that if a beneficiary (or their spouse) attests a will, any devise, legacy, estate, interest, gift or appointment to them, their spouse or those claiming through them is void against them. The attesting person may still give evidence of execution and of the will’s validity or invalidity. An interest in residue appears to fall within this rule. However, s 15 does not displace a gift where a separate testamentary instrument, not witnessed by the beneficiary or spouse, later confirms it; for example, B witnesses a Will benefiting B, but does not witness a codicil that reaffirms it. Class gifts differ on lapse: no one is fixed as a member until ascertainment. If a member is barred (for instance, by attesting), the class gift does not lapse; the property is shared among those able to...

This Q& A assumes that there are no substitute executors. Under the Non- Contentious Probate Rules 1987, SI 1987/2024, r 31, it sets out that a lawfully constituted attorney for a person entitled to a grant may seek administration for the use and benefit of the donor; any such grant must be restricted until further representation is issued, or otherwise as the registrar or a district judge directs. Hence, while an attorney is permitted to apply for a grant, there is no duty upon them to do so......

Practice Note: Relevant property trusts—the principal (ten-year) charge within the Trusts—inheritance tax subtopic For details on the inheritance tax ( IHT) rules applicable to discretionary trusts under the relevant property regime, see Practice Note: Relevant property trusts—the principal (ten-year) charge within the Trusts—inheritance tax subtopic......

The residence nil rate band ( RNRB) originated in the Finance Act 2015, and was subsequently revised by the Finance Act 2016. Its statutory provisions are now contained within the Inheritance Tax Act 1984. For context, refer to Practice Note: IHT—residence nil rate band......

TRSM70010— Discrepancy reporting: contents: Introduction Please refer to the above for further reference. In addition, see the relevant Practice Note: Trust Registration Service ( TRS), particularly the sub‑heading ‘ Discrepancy reporting’ under the main heading ‘ Access to information on the TRS’......

Interest in possession ( IIP) in settled property For the purposes of the Inheritance Tax Act 1984, an individual who is beneficially entitled to an interest in possession ( IIP) in settled property is regarded as beneficially entitled to the underlying trust assets in which that interest exists. However, where that IIP first arises on or after 22 March 2006, IHTA 1984, s 49(1A) limits this deeming rule so that it applies to that interest only if, and only for so long as, the interest is one of the following categories: an immediate post-death interest a disabled person’s interest, or a transitional serial interest or falls within IHTA 1984, s 5(1B) Accordingly, IHTA 1984, s 50 explains the position where a person within s 49(1) has a right to only part of the income (if any) of trust property. In that...