Professional negligence—Wills, estates and trusts

Professional negligence—tax advice in relation to Will drafting

Where a solicitor has drafted a Will which fails to achieve the testator’s intentions because of incorrect tax advice, there may be a right to recover those losses from the solicitor. However, there are a number of complexities to such claims. A claimant seeking to recover losses from an adviser will need to make out all the elements of the negligence claim. In particular, thought needs to be given to:

  1. who the correct claimant is and how the claim should be formulated

  2. the basis for the claim, and

  3. proximity, mitigation and limitation

This Practice Note considers leading cases where personal representatives and beneficiaries claimed against the advisor and examines the options under contract and tort law in recovering losses and its issues.

See Practice Note: Professional negligence—tax advice in relation to Will drafting.

Professional negligence claims—Will drafting

A beneficiary may seek to claim against the draftsperson who drew up the Will where a negligent act or omission has taken place.

This Practice Note sets out the basis for these professional negligence claims

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All in? Court confirms when a settlement is 'made' for the purposes of excluded property (Accuro Trust (Switzerland) SA v The Commissioners for HMRC)

Private Client analysis: This case considered the meaning of 'relevant property' under the settlements regime of the Inheritance Tax Act 1984 (IHTA 1984) and, in particular, the time at which this definition is to be tested. The question arose as to whether the trustees of an offshore trust established by a non-UK domiciled settlor were subject to the UK settlements regime in respect of property added to the trust after the settlor became deemed domiciled in the UK, or whether they were exempt from such charges as the trust consisted solely of excluded property. The First-tier Tribunal (FTT) held that whether trust property is excluded property is based on the status of the trust at the time that it was established, not at the time that the property in question was added to the settlement. As a result, the trust in this case did consist solely of excluded property and no inheritance tax (IHT) charges arose as a result of either the ten-year anniversary or capital distributions. The FTT was also asked to consider whether their jurisdiction was appellate, or supervisory only. The FTT held that, while their jurisdiction was supervisory, the questions raised by the trustees were relevant in establishing whether HMRC had acted reasonably and that the outcome (ie that the paid IHT should be refunded and that no further IHT was due) would be the same in either case. Written by Katherine Willmott, senior associate solicitor at Foot Anstey LLP.

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