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Wills, probate and administration

Probate – business property relief

Private client practitioners will welcome the latest clarification from the first-tier tax tribunal on when BPR is available on holiday lettings – an area of continual confusion. In this article, the author explains the background, and the key points from the ruling – notably the applicable principles derived from two previous rulings:

 

  • Investment is not a term of art but has the meaning an intelligent business person would give to it; such a person would be concerned with the use to which the asset was being put and the way it was being turned to account.
  • A property may be held as an investment even if the owner has to take active steps in connection with it.
  • Land is generally held as an investment where gain is derived from payments to the owner for the use of the property.
  • However, there is a wide spectrum, at one end of which is the exploitation of land by the granting of a tenancy. At the other end is the exploitation of premises as a hotel or by a shopkeeper. The land subject to tenancy would generally be an investment and any business encompassing it would therefore include holding investments, but the business conducted at a shop or hotel would not.
  • Property management is part of the business of holding property as an investment so investment business activity is not limited to purely passive business. ‘Management’ includes finding tenants and maintaining the property, but not providing additional facilities earning landlords additional fees.
  • A composite business must be looked at in the round – as a whole.

 

Practitioners are now awaiting the ruling of the Upper Tribunal in Vigne v HMRC. Graham v RCC [2018] UKFT 306 (TC). Source: www.lawgazette.co.uk.

 

Wills – dependency claims

A welcome ruling has clarified the meaning of ‘child of the family’ for the purposes of a claim against an estate for reasonable financial provision under the I(PFD)A.

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Trusts – conflicting clauses

The claimants – the two daughters of CP who died in March 2015, and his wife JP who died in July 2005 – executed a deed of settlement in respect of the property in 2005. The defendants were the first claimant’s husband and three sons, and the AG (representing charity).

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Procedure – professional executors

The Law Society has published practice guidance for solicitors – and all will writing practitioners – whose clients are considering appointing a professional executor in their wills. Potential executors must give clients enough information to make an informed decision about the appointment and its related costs.

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Wills – interpretation

The correct approach when interpreting an ambiguous will clause is essentially the same as interpreting a contract.

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Constructive trusts – property

The author gives a helpful analysis of a ruling following a claim to establish a constructive trust or proprietary estoppel in respect of a domestic property. The deceased died intestate while living with his partner (the defendant, D) at his property in Weston super Mare.

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Wills – joint bank accounts

In the absence of a later variation or contrary agreement, the surviving joint account holder of a bank account was fully entitled to the balance on the other account holder’s death.

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Wills – gift to solicitors

The Law Society has issued important guidance for practitioners who are asked to prepare wills by clients who want to leave a gift to them, their family or colleagues.

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Wills – proprietary estoppel

Another farm; another proprietary estoppel claim made out.

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Trustees – duty to beneficiaries

Trustees cannot simply ignore beneficiaries’ request for information about a trust, the High Court has held. In this case, the trust property was a farm outside Cardiff.

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