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Issue 17- April 2007

Contents

Cases
Features
Articles
News
Events
Discounts (how to book and claim any discounts)
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Cases

1. Broadway v Fernandes

Citation: [2007] All ER (D) 485 (Mar)
Court: Chancery Division
Judge: Robert Miles QC sitting as a deputy judge of the High Court
Hearing date: 29 March 2007
Summary: Will — Revocation — Evidence of revocation — Oral evidence — Claimant executrix seeking pronouncement of 1991 will — Defendant alleging deceased revoking 1991 will by 2003 will — Defendant failing to provide documentary evidence in support of contention — Whether defendant discharging burden of proof

The claimant was the executrix of the estate of the deceased. The defendant was the nephew of the deceased. The claimant, the deceased, and his partner became friends during the 1950s. They spent a great deal of time together, and they attended the same church. During the 1980s, the claimant was provided with a key to the deceased's flat. On 5 March 1991, the deceased executed a will (the 1991 will) by which the claimant was appointed as executrix. Under the terms of that will, in the event that his partner predeceased him, the entirety of the deceased's estate was to have passed to the claimant. His partner died in 1994, and, after that date, the claimant remained a close friend of the deceased. He had a number of nieces and nephews, all of which, excepting the defendant, lived abroad and had little to do with him.

A dispute had occurred between the defendant and the deceased during the 1990s. During 2000, the deceased's health began to decline. After the claimant had contacted the defendant to inform him of the deceased's ill-health, the defendant visited his uncle in April 2003. The defendant contended that during that visit, the deceased informed him that he had made a new will in 2003 (the alleged 2003 will), revoking the 1991 will and providing for all his nieces and nephews. In the event, the deceased died on 8 March 2005. The claimant maintained that she had found the 1991 will at the deceased's flat, and that no other wills, nor letters or documents suggesting that a later will had been made were found. The claimant applied for the 1991 will to be pronounced in solemn form. The defendant objected. The principal issue that fell to be determined was whether, in the light of the fact that the alleged 2003 will had not been uncovered following the deceased's death, the 1991 will had in fact been revoked.

The court ruled:

In the instant case, the 1991 will having been duly executed, the burden of proof in establishing that that will had been revoked fell upon the defendant. That threshold was particularly high in the light of the fact that the alleged 2003 will had not been found, nor had any documentary evidence indicating its existence been found. On the evidence, the defendant had failed to satisfy the burden of proof that the deceased had created a new will in 2003, revoking his earlier will of 1991. Accordingly, the 1991 will would be pronounced in solemn form.

Re Wyatt (deceased) [1952] 1 All ER 1030 applied.
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2. Re K (deceased)

Citation: [2007] All ER (D) 473 (Mar)
Court: Chancery Division
Judge: Richard Arnold QC sitting as a deputy judge of the High Court
Hearing date: 28 March 2007
Summary: Administration of estates — Distribution — Retention of assets to meet future liabilities — Administrators applying for court's sanction to pay certain admitted creditors — Administrators further applying for distribution of deceased estate to beneficiaries without referring to claims of potential creditors — Court's approach in such cases — Whether court should sanction relevant payments and distributions

Following the deceased's death in 1992, an order was made in 1996 appointing the applicants as administrators of the deceased's estate. The first administrator was the deceased's widow. The second administrator was a solicitor. In 1998, the administrators commenced proceedings to distribute the deceased's estate. The deceased's children were joined as defendants, as were a considerable number of persons who had intimated claims against the estate. In that same year an order was made that the deceased's eldest child should represent all the beneficiaries of the estate (the beneficiaries) other than the first administrator, and that one of the other defendants should represent all the creditors of the estate save for two.

There were claims from various creditors, which the administrators subsequently admitted or partially admitted (the admitted creditors). There were also a number of potential creditors who had commenced various proceedings. In 1994, the deceased's brother commenced proceedings against the estate for a substantial sum. However, from 1999 onwards nothing had been heard from the brother. Creditor A obtained a judgment in 1993 on a counterclaim brought against him by the deceased, but nothing had been heard from him for a number of years, and there was little information available about his claim. Creditor B issued proceedings in 1994, but nothing had happened following an adjournment of the proceedings in 2001. Creditor C issued proceedings in 1994, but nothing had happened since the administrators served their defence in 2000.

There were also eight further claims, which had been intimated by various potential creditors who had instituted proceedings, but nothing had been heard from any of them for many years. The administrators applied for the court's sanction to pay certain admitted creditors and then to distribute the deceased's estate to the beneficiaries without reference to the claims of the potential creditors. The application was supported by the representative beneficiary and by the first administrator in her capacity as a beneficiary. An issue arose whether any, and if so what, protection had to be afforded to the potential creditors.

The application would be allowed.

In cases where the cause of concern was a series of disputed and stale claims against the estate, the court should consider whether any, and if so what, protection should be afforded to the potential creditors. Such protection could take the form of retention, an indemnity from the beneficiaries or insurance. The court would take a practical view and might in an appropriate case conclude that no protection beyond the personal liability of the beneficiaries was needed. Even if the court concluded that a greater degree of protection was required, it was not bound to protect the potential creditors in respect of the full value of their claims. In the circumstances of the case, it would be unjust to make either the admitted creditors or the beneficiaries wait any longer.

The potential creditors had had more than ample time in which to make and pursue claims, or in the case of creditor A, to enforce his judgment. The fact that they had not done so suggested that the claims were either not well-founded in the first place, had been satisfied in other ways, or had simply been abandoned. The potential creditors' claims might or might not have been statute-barred. The actions brought by the brother, creditor B and creditor C were prima facie liable to be dismissed for want of prosecution or struck out, and even if the claims were not statute-barred those potential creditors would face considerable difficulties in bringing further actions. As to protection, the potential creditors' principal remedy would be the possibility of pursuing the beneficiaries who would benefit from a distribution. A retention was not appropriate in the instant case, save with regard to potential future litigation costs, because it was virtually impossible to make any rational assessment of what sum ought to have been retained or for how long.

The administrators would have the court's sanction to pay the admitted creditors and then to distribute the estate without reference to the claims of the potential creditors subject to a retention of £50,000, to be kept in an interest-bearing account unless or until needed, for a period of three years.

Re Yorke (deceased) [1997] 4 All ER 907 considered. 
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3. Sifri v Clough & Willis (a firm)

Citation: [2007] All ER (D) 450 (Mar)
Court: Chancery Division
Judge: Roger Kaye QC sitting as a judge of the High Court
Hearing date: 27 March 2007
Summary: Solicitor — Negligence — Damages — Measure of damages — Claimant succeeding in probate action against testator's widow — Claimant subsequently commencing proceedings against defendant solicitors' firm in respect of negligent preparation of two wills — Defendant admitting liability in respect of part of claim against it — Claimant seeking damages in respect of entire costs of probate action and costs occasioned by delay in administration of estate — Whether such costs recoverable by claimant

The claimant was the only child of the testator. Her mother died in 1976, and, in 1977, the testator remarried. In 1998, the testator made a will pursuant to the terms of which he left the life interest in the matrimonial home to his widow and one-third of his residual estate to the widow and then to the claimant. The remaining two-thirds of the residual estate were left to the claimant. In 2000 and 2001, the testator made two further wills (the two wills) prepared by M, a solicitor who worked for the defendant firm. Following the testator's death in 2001, the claimant commenced proceedings against the testator's widow, seeking to set aside the two wills on the basis of undue influence and lack of testamentary capacity (the first and second claims).

At the commencement of that trial, the claimant successfully applied to amend her statement of claim to include an additional claim of lack of want and knowledge (the third claim), alleging that M had taken his instructions in respect of the making of those wills from the testator's widow and had not sought to ensure that he understood the terms of the wills. The judge allowed the third claim, and dismissed her claims in respect of the first and second claims, taking the view that those claims had been unreasonable. Accepting the submissions put forward by the testator's widow, the judge made no order as to costs.

Following that judgment, the claimant commenced an action against the defendant firm of solicitors, alleging that (i) they were negligent in the preparation of the two wills, and (ii) they had failed to give advice on how the estate could be protected. The defendant subsequently indicated to the claimant that it would accept liability in respect of the claim relating to the negligent preparation of the wills, but not the latter claim. Thereafter, the claimant commenced proceedings against the defendant, seeking damages for (i) the entire costs of the probate action, and (ii) loss to the estate caused by the delay in the administration of the estate due to the negligent preparation of the two wills. The issue for determination was what costs, if any, were recoverable.

The court ruled: The costs which the claimant could recover were those costs which were reasonably foreseeable following the negligence of the defendant in the preparation of the two wills.

In circumstances where a solicitor had failed to take instructions from the testator and instead took them from a third party and had not taken steps to understand them or to keep the notes he had made in respect of them, then costs thereby incurred were foreseeable. However, it did not mean that all the costs of such an action were recoverable. In the instant case, the claimant could not recover the costs based on the first two claims since those had nothing to do with M's actions. The costs in relation to the third claim were recoverable because that claim had succeeded due to M's breach of duty. Further, the claimant could not recover the losses to the estate in respect of the delay to the administration of the estate, since those losses had not been caused by M's negligence.

Having considered the submissions put forward by both parties as to how those costs were to be apportioned, the submissions put forward on behalf of the claimant were to be preferred. Accordingly, the claimant would be awarded 40 per cent of the trial costs on a standard basis. The claimant would be awarded costs of £14,400, plus interest. 
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4. Walker v Walker and another

Citation: [2007] All ER (D) 418 (Mar)
Court: Chancery Division
Judge: Roger Kaye QC sitting as a judge of the High Court
Hearing date: 30 January 2007
Summary: Equity — Undue influence — Presumption of undue influence — Grandfather's will devising property to widow for life and thereafter to granddaughters upon becoming 25 — Father being appointed as additional trustee — Father being granted consecutive tenancies of trust property at low rent — Father suggesting deed of variation increasing age at which property vesting — Father instigating deed of confirmation in relation to tenancy — Whether presumption of undue influence rebutted — Whether grant of tenancies in breach of self-dealing rule

The deceased died in 1991, subsequent to which probate of his will was granted to his widow. The principal asset in his estate consisted of a family farm and farmland which the deceased and his son, the first defendant, had run through a company. The will devised the farm on trust for sale to the deceased's widow for life, and thereafter in equal shares to his two granddaughters, the claimant and K, upon attaining the age of 25. No provision was made in respect of the first defendant, who alleged that he had been excluded in order to prevent creditors obtaining the farm in the likely event that he became bankrupt on account of company liabilities. He continued to operate businesses from the farm, and, in 1994, was made bankrupt.

On 9 October 1997, the widow granted a 40-year tenancy of the farm to the first defendant at a rent of £11,820 pa. On 29 October, she assigned her life interest to the granddaughters, who were not aware of the tenancy. In November, at his request, the first defendant was appointed as an additional trustee of the will. In April 1998, a meeting took place in relation to a revision of the tenancy, which was attended by, inter alia, the claimant, K, and the first defendant. A deed of variation was subsequently entered into by the widow and the first defendant, reducing the term to one year. On the expiry of the 1997 tenancy, the widow and the first defendant, as trustees, granted the first defendant a 25-year tenancy of the farm at a rent of £19,700 pa.

At his instigation, a deed of variation raising the age at which the granddaughters' interests would vest to 40, was executed by himself, the widow, the claimant and K. A deed of confirmation was executed by the same parties. It stated that the 1998 lease might constitute a breach of trust arising from the fact that the first defendant was both a trustee and tenant thereunder, and recorded that the parties were in agreement with that lease. In 2002, the second defendant was appointed as an additional trustee. In 2004, the widow died. The first defendant obtained a report on the value of the farm, which contained valuations ranging from £1.3m to £1.865m, and considered that the rental value paid by him was low. In 2005, he wrote to the claimant and K, proposing that each receive, £200,000 plus a half share in a bungalow contained within the farm land in return for relinquishing ownership of the whole. The letter suggested that they might like to dispense with independent advice. K assigned her interest to the first defendant. The claimant brought proceedings, seeking, inter alia, to set aside the 1999 deeds and the 1998 tenancy.

The claimant submitted, inter alia, that (i) the 1999 deeds should be set aside on the basis of presumed undue influence, (ii) the 1997 and 1998 tenancies had been granted in breach of the self-dealing rule, (iii) the first defendant had failed to act as a prudent trustee, (iv) an account of the first defendant's dealing with the trust on the footing of wilful default should be ordered, and (v) the first defendant should be removed as trustee.

The court ruled:

(1) To establish presumed undue influence, there were two aspects which a claimant had to establish, first, the existence of a relationship of trust and confidence and ascendancy or a special relationship, and, second, a transaction that called for an explanation. If a claimant succeeded in establishing those two elements, it would be up to the defendant to justify the transaction by showing that he did not in fact prefer his own interests. That was usually done by showing that the transaction in question had been entered into as the result of full, free and informed thought. That might (but did not have to) be shown by the nature and effect of the transaction being fully explained to the claimant by some independent and qualified person. The involvement of a solicitor would not, however, necessarily prevent a plea of undue influence succeeding.

It was common ground that the presumption of undue influence arose in the instant case. It was accepted that the relationship of trust and confidence existed and that the transaction called for an explanation. In the circumstances, the presumption had not been rebutted in relation to either of the 1999 deeds. The first defendant had preferred his own interests, and the advice received by the daughters had been neither full, nor informed, nor sufficient, having regard to authority, to rebut the presumption.

Inche Noriah v Shaik Allie Bin Omar [1928] All ER Rep 189, Royal Bank of Scotland v Etridge (No 2) [2001] 4 All ER 449, Hammond v Osborn [2002] All ER (D) 232 (Jun) and Drew v Daniel [2005] 2 FCR 365 applied.

(2) The basis of the self-dealing rule was that a trustee could not put himself in a position where his duty as a trustee conflicted with his own personal interest, hence it mattered not that the transaction was between himself and his co-trustee or trustees on the one hand and himself as purchaser on the other. The transaction was, however, only voidable, not void. Acquiesence or consent to 'a' tenancy in principle was not consent to 'the' tenancy in question.

In the instant case, there had been nothing in the will that would permit the trustees to grant either the 1997 or 1998 tenancy to one of their number. Both tenancies had been a clear breach of the self-dealing rule. In the circumstances, it could not be said that the claimant had truly and fully consented to the 1998 tenancy or acquiesced in it with full knowledge of all the relevant facts, implications and effects. Accordingly, the 1998 tenancy could not stand. Tito v Waddell (No 2) [1977] 3 All ER 129 applied.

(3) In view of the findings as to the 1997 and 1998 tenancies, the first defendant had failed to take any reasonable steps to ensure the income of the trust fund was optimised for the benefit of all beneficiaries. His own rent under the 1998 tenancy had been well short of a market rent. By his actions, he had not acted in the best interests of the beneficiaries and had failed to ensure the trust (and thereby the beneficiaries) received the proper amount due to them.

(4) An account on the footing of wilful default would only generally be ordered, where at least one particularised breach of trust had been alleged and found. In the circumstances, the case for a full and proper account had been made out. The first defendant's administration of the trust affairs had been less than should be expected even of a non-professional trustee.

(5) The court had an inherent jurisdiction to remove a trustee on proper grounds. That delicate jurisdiction was founded essentially on the broad principle of ensuring the overall welfare of the beneficiaries and the protection of the trust estate. It was not, however, to be exercised lightly.
Having regard to the whole history of the instant case, it was very much in the interest of all the beneficiaries that the first defendant should be removed. Having regard to his attitude to and dealings with the trust and the trust assets, plus his attempts to buy out his daughters on less than satisfactory terms, a real risk to those assets had been shown.

Letterstedt v Broers (1884) 9 App.Cas. 371 applied.
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5. Rutland v Rutland and another

Citation: [2007] All ER (D) 326 (Mar)
Court: Chancery Division
Judge: Etherton J
Hearing date: 19 March 2007
Summary: Probate — Will — Validity — Testamentary capacity — Testator making six wills — Evidence of testators testamentary capacity — Compromise agreement reached — Whether compromise agreement affecting or reducing entitled of grandchildren under sixth will

The testator had five children, the claimant, the first defendant, B, T and M. He also had another son, A, by another relationship and eight known grandchildren, three of whom were minors. The testator made six wills from 1995 to 2000, which were subject to an amendment made in 2002. The third will contained various legacies, which included a specific request that the testator's company be left to the claimant and half of the testator's estate be left to his grandchildren, apart from the children of B, on attaining the age of 25. The fifth will, made on 1 March 2000, contained various legacies, which included a specific request that his company be left to the claimant and the residue be left to all of his grandchildren on attaining the age of 25.

At the time of making the fifth will a doctor had examined the testator for the purpose of verifying his testamentary capacity and was satisfied that he did in fact have testamentary capacity. Following that, the testator made a will on 31 March 2000 in which the provisions were the same as the fifth will, bar a specific reference to the shares in the company that the testator had left to the claimant. The 2002 amendment purported to make a change to the third will and proposed to remove a specific request in that will, namely that his company be left to the claimant. In that same year a doctor who had examined the testator on at least two occasions concluded that he was no longer able to manage his personal affairs by reason of mental disorder. The testator died at the age of 90 in 2004.

Following that, a dispute arose as to the validity of the wills. An expert report by a professor stated that there was strong evidence that the testator had developed dementia in his declining years and that the process had started in the later half of the 1990's. However, he was of the opinion that the conclusion of the doctor, that the testator's testamentary capacity at the time of the execution of the fifth will, was correct and gave no indication that that capacity had or might have been lost at the time of the execution of the 31 March 2000 will.

A compromise agreement was reached, on terms amongst others, that probate in solemn form would be granted for the 31 March 2000 will. An application was made on behalf of the second defendant, who had been joined in the proceedings to represent the interests of the grandchildren, that the compromise did not affect or reduce the entitlement of them under the 31 March 2000 will. An issue arose as to whether, at the time of the 31 March 2000 will was executed, the testator had had testamentary capacity and whether he had known and approved of the contents of that will.

The court ruled:

On the evidence, the testator had testamentary capacity at the date of 31 March 2000 and knew and approved of the contents of that will. Even though there was a gap between the execution of the fifth will and the execution of the 31 March 2000 will there was no evidence that suggested the testator had crossed the line between capacity and incapacity during that period. As to the 2002 amendment, it was clear from the state of decline of the testator that by the time he had executed the amendment he had crossed the threshold between capacity and incapacity. The court would pronounce against the validity of the 2002 amendment and pronounce the 31 March 2000 will as being the last will and testament of the testator.

Clancy v Clancy [2003] All ER (D) 536 (Jul) applied; Banks v Goodfellow (1870) LR 5 QB 549 and Fuller v Strum [2002] 2 All ER 87 considered.

Please note subscribers can go to LexisNexis Butterworths Legal Updater
for further details about all the above cases.

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Features

1. Law Society Council update 

On Thursday, 29 March, I attended the Law Society Council meeting held, as usual, in Chancery Lane in London. Reading the Council papers can sometimes seem daunting a task. I received the revised business plan (all 250 pages) three days before the meeting. Nevertheless, I welcome the more detailed financial information which is now becoming available; and the willingness of the treasurer and Chief Executive, who agreed to provide me with additional information which directly relates to the Probate Section.

Financial discipline and budgetary control are and will continue to be essential if the Law Society practising certificate is to remain a three figure sum. The cost of the consultations and regulation work undertaken by the Solicitors Regulatory Authority (SRA) is met by the Law Society and ensuring that the SRA is a cost-efficient and effective regulator is definitely in the interest of the profession.

Likewise, ensuring that the Legal  Complaints  Service (LCS) does not expand or expend money unnecessarily, but still satisfies the agreed targets set by the Legal Services Complaints Commissioner, requires careful scrutiny. However, both the SRA and LCS are understandably keen to demonstrate their separation and independence from the Law Society and are unlikely to readily accept checks on their long-term aims and aspirations.

The speed with which both the SRA and the LCS have developed has been notable, so it is imperative that the representative arm of the Law Society is able to react in a robust and effective way. The governance structures are being reformed and the new Regulatory Affairs Board is tasked with responding to consultations from the LCS, SRA and other regulatory authorities, and to provide a strategic approach in representing solicitors’ interests in relation to regulatory matters. It will be busy!

Notwithstanding the increasing profile of the SRA, the Law Society technically still has to pass rule changes. At the meeting on 29 March, amendments were approved to the new Code of Conduct (which will come into force on 1 July 2007) to reflect the inclusion of home purchase/home reversion plans within the regulatory scope of the Financial Services Authority. However, the Council deferred making amendments to rule 18 in respect of Home Information Packs because of concerns about the lack of any guidance accompanying the suggested amendments. This issue has been deferred to the May Council meeting.

There was also a 100 per cent vote by Council members in favour of a Council member’s motion which strongly criticised the Legal Services Commission’s handling of legal aid matters.

Helen Clarke
Law Society Council and Wills and Equity Committee member
Probate Section Executive Committee member
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2. Bare trusts for minors

HMRC have now confirmed, in light of the further advice they have received, that a lifetime gift on trust for a minor absolutely, whether or not the provisions of section 31 Trustee Act 1925 are excluded, is a potentially exempt transfer.

The Chartered Institute of Taxation and other representative bodies have been pressing for clarification since this issue was first raised in December and are pleased that HMRC have now confirmed that an absolute trust of this kind is not a settlement for Inheritance Tax (IHT) purposes.

HMRC now accept that the beneficiary has an immediate and absolute right to both capital and income, and only the beneficiary's minority will prevent such beneficiary from being able to require the trustees to convey the trust property to him. The trust property, (including any accumulations of income if section 31 applies), will form part of the beneficiary's estate for IHT purposes.

The IHT manual is to be updated shortly.

(26/03/2007)
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3. And to the Chancellor I bequeath...

More than 15 million people have reason to be disappointed by Chancellor Gordon Brown's silence on Inheritance Tax (IHT) in his budget. The main announcement — a £300,000 IHT threshold for 2007–08, rising to £350,000 for 2010 — had already been made last year and does little to help homeowners who want to pass their assets on intact to their children.

The Chancellor clearly sees IHT as a good revenue raiser, and he does not respond to statistics such as those from the Halifax that calculate that 4.3 million homes will be above the threshold by 2020. Since the majority of those 4.3 million homes will be owned jointly by parents who will, in most cases, be leaving the property to two or more children, it seems that well over 15 million homeowners and their heirs could be affected.

But there still ways of protecting your legacy, say the tax experts:

  • Make a will if your assets are likely to be above the threshold. The destination of your bequests can dictate whether the 40 per cent tax is payable or not. Legacies to charity are tax-free, for instance.
  • Consider getting married or entering a civil registered partnership. There is no IHT on assets left to spouses or civil registered partners. Cohabitees, by contrast, can find themselves in very difficult financial situations if one dies and leaves property to the other.
  • Set up a “nil rate band” trust with your spouse or civil registered partner as part of your will. Under such an arrangement you can save your family up to £120,000 in future IHT. Under such an arrangement, assets up to the value of the nil rate band are passed into a trust when the first spouse or civil registered partner dies.
  • A share of the family home, investments, buy-to-let and other assets can be included. When the first spouse dies, the survivor can still exercise discretion about what happens to the assets as he or she can become one of the trustees. Professional advice does need to be taken, however, as a badly-drawn-up trust might be ineffective. In fact, as well as making one of these trusts to be triggered on death, it is also possible to make several lifetime trusts — one every seven years — that work in a similar way, according to Stuart Skeffington of solicitor Withers.
  • Invest in a Business Property Relief (BPR) scheme. Set up originally to help family businesses pass on their assets free of IHT, BPRs now offer 100 per cent protection against IHT if the investment is made at least two years before the person dies. “There is lots of this sort of product around,” says Nick Hughes of Chiltern. Close Fund Management runs one of these schemes, which is mainly invested in the alternative investment market. The average age of investors is 81, and there was a 60 per cent rise in demand for the scheme last year. However, HM Revenue & Customs appears to be taking steps through which it could “take away this tax relief if they thought too many people were using it,” says Martin Donn of accounting firm Blick Rothenberg.
  • Buy insurance to pay your IHT bill if you are under 50, advises Mr Hughes. He is concerned that people below this age could give away assets or put them into trusts for children who then fritter away the assets or have to give some of them away in divorce settlements. Insurance is a safer option, in his view, for many people. “And the cover can be cheap,” he adds. But make sure the policy is put in trust for your beneficiaries, otherwise the payout will just be added to your estate and increase the tax burden on your death.
  • Take advantage of the well-known gift exemptions, if you are sure that you will not regret your generosity later. You can give away, for instance, small gifts of up to £3,000 a year, or £5,000 to your child when he or she gets married — and there will be no IHT. Larger gifts made out of your capital are potentially chargeable to IHT, unless you live for at least another seven years.
(26/03/2007)
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Please note subscribers can go to LexisNexis Butterworths Legal Updater
for further details about the above features.

Articles

1. A new broom

Journal: Taxation
Author: Lord Burnett
Citation: Taxation, 15 March 2007, 289
Issue date: 15 March 2007
Summary: Last month, the author called for major reform of Inheritance Tax (IHT) on individuals and trusts in a speech to the House of Lords. IHT affects estates worth more than £285,000 and is charged at 40 per cent. Originally intended as a tax for the very rich, the respected Institute of Fiscal Studies calculates that some 3.25 million individuals and estates in this country are now potentially liable to pay the tax.
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2. Forfeiture relief

Journal: New Law Journal
Author: Mark Pawlowski
Citation: 157 NLJ 318
Issue date: 2 March 2007
Summary: The common law rule of public policy, which prevents a person who has unlawfully killed another from profiting from that death, is intended to act as a disincentive to criminal activity and to reflect public conscience. At the same time, the Forfeiture Act 1982 is intended to militate against the strict application of this rule by giving the court power to grant relief to people found guilty of unlawful killing, other than murder, from forfeiture of their inheritance and other similar rights. An alternative course is to apply for reasonable financial provision from the deceased's estate under the Inheritance (Provision for Family and Dependants) Act 1975.
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3. Cinderella trusts

Journal: Solicitors Journal
Author: Steven Heller
Citation: 151 SJ 7 221
Issue date: 16 February 2007
Summary: Considers the demise of accumulation and maintenance (A and M) trusts. It argues that now is the time to give your trusts a good, hard look to determine which ones to wind down, which ones to modify, and which ones to leave as is. There are two key dates to remember for Finance Act (FA) 2006 compliance, 22 March 2006 and 6 April 2008.
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Discount offers

1. How to book and claim any discounts
  • Law Society Publishing: quote “Probate Section” to receive a 20 per cent discount off all related titles (excluding directories) via Prolog at The Law Society, PO Box 99, Sudbury Suffolk CO10 2SN, telephone 087 0850 1422, fax 017 8731 3995 or email lawsociety@prolog.uk.com.
  • LexisNexis Butterworths: quote “Law Society Section discount offer” when ordering via www.lexisnexis.co.uk, customer.services@lexisnexis.co.uk or 020 8662 2000.

This e-alert is not intended to provide comprehensive records of information concerning the probate sector. If you have any feedback or suggestions, please email probatesection@lawsociety.org.uk. This e-alert was created in conjunction with LexisNexis UK Legal Updater Service. For further information about any of the articles, please contact sabina.smith@lexisnexis.co.uk. The views expressed by the Legal Analysis interviewees are not necessarily those of the proprietor.

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