Legal Q&A

Sale by PRs or appropriation to beneficiaries We understand you are asking when it is better for the personal representatives ( PRs) to dispose of an estate property, or instead to appropriate it to the beneficiaries so that they handle the sale themselves. This choice typically arises where: the beneficiary(ies) has/have part or all of their capital gains tax ( CGT) annual exemption available the beneficiary(ies) will pay CGT at 18% on any part of a gain the beneficiary(ies) has/have losses available to offset against any gain the sale will make a loss and the PRs will not be making any further disposals that may produce gains to utilise the loss A death is not usually a chargeable occasion for CGT. For these purposes the PRs are treated as acquiring the assets at market value on the date of death; effectively, all prior accrued gains are...

Both sides must record their agreement or dispute within a costs budget discussion report ( Costs Precedent R)...

Under the enterprise management incentives ( EMI) legislation There is no requirement to register an EMI scheme with HMRC until the point at which the first EMI option(s) are granted under the arrangement (see paragraph 44 of Schedule 5, Part 7 of the Income Tax ( Earnings and Pensions) Act 2003, and HMRC guidance at ETASSUM56010). That said, in practical terms, an EMI scheme can be regarded as ‘existing’ from the moment it has been duly adopted by the company in accordance with its constitution—regardless of whether any options have then been granted under it at all......

One must carefully take into account a bankrupt’s duties owed to the trustee in bankruptcy ( TIB)...

Various statutes govern the exercise of trustee powers. A range of statutes regulates how trustee powers are exercised. For the purposes of this response, it is taken that the trust contains no special or unusual terms or purposes. In those circumstances, the Trustee Act 1925 ( TA 1925) and the Trustee Act 2000 ( Tr A 2000) are likely to be the principal statutory frameworks. As a general rule, there will be no more than four trustees ( TA 1925, s 34), and trustees are under a duty to reach decisions that accord with the trust’s purposes and powers. They must act in good faith and eschew conflicts of interest. Decisions should be taken on an informed footing, and the usual position for private trusts (as opposed to, for instance, charitable trusts) is that trustees are required to act unanimously rather than by...

Contributing tithes for the maintenance of a parish is a very long-standing practice, traceable well back to the Saxon era. In 1836, the Tithe Act 1836 indeed replaced the obligation to pay tithes with a rentcharge over land, recalculated annually by reference to the price of corn. In substance, it functioned as a locally levied, index-linked charge. Later enactments continued to control tithe payments until, in 1936, the Tithe Act 1936 ( TA 1936) abolished rentcharges arising from tithes. Compensation was then made payable to reflect that change. Accordingly, the concise conclusion is that a tithe rentcharge is not legally enforceable......

Long residence and private life resources—overview The ten-year long residence route set out in the Immigration Rules, Part 7, does not allow dependants to submit applications alongside the principal applicant. This means joint filing is not available under this route. Dependants may, however, apply independently where they satisfy the criteria of the relevant rule. By way of illustration, if a husband and wife have each been lawfully present in the UK for ten continuous years, they must each file their own separate applications under the long residence provisions. See Immigration Rules, Part 7, para 276B–276C. When a Tier 2 ( General) migrant secures indefinite leave to remain ( ILR) through the long residence rules, their spouse may have scope to seek leave to remain as the spouse of a settled person under Immigration Rules, Appendix FM (see Practice Note: Partners applying for limited leave to...

It is commonplace in financial remedy proceedings for a third party to be added to the case, either to advance a claim to a beneficial interest in a property or other asset, or to permit making of an order for sale in relation to that property. In TL v ML, Mostyn J articulated the procedural principles to be applied to such matters......

How should the trustees report the amount of the debt for the purposes of IHT ten-year charge? Should they include any index-linked element of the debt? We have found no authority directly answering this. The principal, or ten‑year, charge is imposed on the value of relevant property held by the trustees immediately before the ten‑year anniversary ( TYA). See Practice Note: Relevant property trusts—the principal (ten‑year) charge. Where the trustees’ asset is encumbered by a charge with an index‑linked feature, the trust fund must be valued correctly just before the TYA. That exercise turns on the precise balance outstanding at that point and on whether the index‑linkage ought to be reflected, notwithstanding it would only bite once the loan is redeemed. As a broad rule, where property is charged, the amount secured is deductible from the property’s value when computing the IHT charge...

Serving the notice Administration of Estates Act 1925, s 1(3) states that on a person’s death the personal representatives step into the deceased’s place in relation to his real property, so far as any interest survives his death, and equally in relation to his personal property. It follows that a notice connected to that property should be directed to the deceased’s personal representative, irrespective of who holds that role, and irrespective of whether a grant of representation has yet been obtained, since the testator’s property vests in the executor from the moment of death, without any interval. Where the death is intestate, the administrator’s office is described as dative, because it arises only from the grant of administration. Accordingly, until a grant issues, the deceased’s property vests in the Public Trustee and not in the administrator, who acquires authority on the grant. Service on the...

Prior to the Sunday Trading Act 1994 ( STA 1994) Before STA 1994, trading on Sundays was unlawful, save in certain excepted circumstances, pursuant to the Shops Act 1950, which had governed such activity. That Act introduced lawful Sunday trading, but limited large premises (over 3,000 square feet, or 280 square metres) to opening for a maximum of six hours strictly between 10 am and 6 pm during that specified period. STA 1994 enables Sunday trading prospectively; however, it contains no term revoking or amending any pre-existing covenant in a lease that prohibits trading on a Sunday, and such clauses therefore continue to bind......

Section 1(1)(a) of the Housing Act 1988 ( HA 1988) Under this provision in the Act, only an individual can be the tenant of an assured tenancy. Consequently, a company letting cannot qualify as an assured shorthold tenancy ( AST). The HA 1988 also specifies categories of tenancy that are excluded from being ASTs, including business tenancies under the Act. As a result, the arrangement will then fall either as a common law tenancy—outside the HA 1988 and subject to ordinary contractual principles—or, where the relevant requirements are satisfied, as a business tenancy......

Section 214 of the Housing Act 2004 as amended Section 214 of the Housing Act 2004, as amended, allows a tenant to issue a claim against a landlord using the modified Part 8 route for monetary redress where the landlord has not safeguarded the deposit. The award must be set at between one and three times the value of the deposit. If the tenancy is ongoing, the court may direct that the deposit is lodged with a relevant scheme. Under section 9 of the Limitation Act 1980, any such claim must be started within six years from when the cause of action arose......

Where a tenant makes an encroachment onto neighbouring land owned by a third party adjacent to the demised land, the appropriation is treated as accruing to the benefit of the tenant’s landlord. In Tower Hamlets LBC v Barrett [2006] P& CR 132 (not reported by Lexis Nexis®), Neuberger LJ observed at para [26] that the doctrine is clearly articulated in these terms: in every case—whether the enclosed land is part of the waste, belongs to the landlord, or is owned by someone else—the presumption is that the tenant enclosed it for the landlord’s advantage, unless the tenant has carried out some act disclaiming the landlord’s title......

Q& A In this Q& A, the tenant is termed the immediate tenant, while the intended subtenant is called the proposed tenant. Any subtenants of the proposed tenant are described as potential subtenants. As the exact text of the lease covenants is unknown to us, we proceed on the basis that the prohibition covenant mirrors that in Nemcova v Fairfield Rents, under which the lease obliged occupants not to use the premises for any unlawful or immoral purpose, and ‘for any purpose whatsoever other than as a private residence’. We also proceed on the basis that the alienation clause includes a requirement for the immediate tenant to adhere to the provisions set out in the superior lease in full......

This Q& A explores whether a gas safety certificate is necessary before issuing a section 21 notice, in situations where the flat has no gas appliance installed at all whatsoever......

Broadly, varying a (stamp duty) lease constitutes a stamp duty land tax ( SDLT) transaction. This is because the transaction’s effective date falls after the SDLT start date of 1 December 2003, and it is not undertaken under a contract concluded before 10 July 2003, the date on which the Finance Bill 2003 received Royal Assent. The fact that the lease being amended was granted prior to the implementation date does not alter this position......

For this Q& A, it is assumed that: the landlord’s warning notice was validly served the tenant’s statutory declaration was duly sworn (not merely signed) the lease is unregistered and not required to be registered Validity of the lease By virtue of section 52 of the Law of Property Act 1925 ( LPA 1925), any conveyance of land, or any interest in it, is ineffective to convey or create a legal estate unless executed as a deed. That section contains a number of exceptions, including a lease granted for a term of less than three years. See Commentary: Leases which are not effective to create a legal estate: Halsbury’s Laws of England [68]......

This Q& A relates to whether the landlord can serve a schedule of dilapidations in respect of partitioning. It considers if the presence of partitioning permits the landlord to issue a schedule of dilapidations. It also addresses whether the existence of partitions could adversely affect the tenant’s ability to determine the lease by exercising a break; that latter point is not dealt with in this reply. For the purposes of this Q& A, it is assumed that the tenant, with the landlord’s authorisation, installed the partitions during the term of the earlier lease (the Original Lease), and that, when negotiating the new contracted out lease (the Current Lease), the partitions were not raised. In evaluating the tenant’s responsibilities to remove the partitions, this answer is necessarily constrained without sight of the leases and any relevant licences granted in connection with the works. The...

General principles Once a fixed-term assured shorthold tenancy ( AST) ends, a periodic tenancy arises by operation of section 5 of the Housing Act 1988 ( HA 1988). Under s 5(3)(d) HA 1988, the duration of that periodic tenancy is set by reference to the interval for which rent was last due under the preceding fixed-term tenancy itself as specified by that statute......