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A is the beneficiary of personal injury trust. A's spouse, B, receives means-tested benefits. Is there any reason why B should not act as trustee of the trust?
Q&As
Under general trust law, there is no restriction on the spouse of a beneficiary or settlor acting as trustee of a settlement. In fact, there is very little restriction on who may be appointed as trustee; anyone who has the legal capacity to hold the legal title to the trust property may be appointed a trustee of that property. See Practice Note:
A is the executor of their late mother's Will, which is dated 1974 and contains no administrative provisions. The residue is split equally among six beneficiaries, one of which is A. The only remaining asset within the estate is a parcel of land. A wants to buy out the other beneficiaries to own the land themselves but some of the beneficiaries want to retain their interest in the land. Can A override the wishes of the beneficiaries and transfer the land to themselves, in return for paying to each beneficiary a sum of money equal to their share of the market value of the land? Would the situation be different if A wanted to sell the land on the open market rather than have it transferred to themselves?
Q&As
We refer you to Practice Note: Personal representatives and trustees—power of appropriation, which states the following in respect of appropriation: Self-dealing There is no express prohibition in section 41 of the Administration of Estates Act 1925 (AEA 1925) preventing a sole Personal Representative (PR) from appropriating assets to themselves although there is
A is the founder and trustee of a charitable company. Can A add to the permanent endowment but with different voting rights to those set out in the existing articles? The articles of the company do not permit A to have a 'veto' or 'golden vote' which A could trigger if A felt the other trustees were taking the charity in a direction with which A disagreed.
Q&As
Companies limited by guarantee The members of a company limited by guarantee are granted their membership by virtue of the articles of association of the company. Unlike companies limited by shares, their rights are not granted by virtue of ownership of a particular asset. For further information, see Practice Note: Companies limited by guarantee. The articles of association of a company can only be amended by a special resolution of the members of the company. These
A is the life tenant of a Will trust which is comprised of a property. B is the remainderman. During the course of the trust, B has loaned funds to the trust to make improvements to the trust property and these have significantly increased the property's value. Upon A's death, should the property be valued for IHT taking into account the improvements made or will the loans made by B be deductible? What are the likely CGT implications?
Q&As
IHT implications of life tenant's death The inheritance tax (IHT) implications of the life tenant's death will depend on the type of trust. We assume that A has an immediate post-death interest (IPDI) under section 49A of the Inheritance Tax Act 1984 (IHTA 1984) and so, on A's death, the trust property will be valued and counted as part of their estate for IHT purposes under IHTA 1984, s 49. For further guidance, see Practice Notes: The meaning
A is the owner of a property and has granted an option to purchase to B. The option has been noted on the title at the Land Registry. A subsequently also granted an option to purchase to C which has also been noted at the Land Registry with the intention that C would exercise its option if B's option lapsed. B's option is due to expire in one month. If A varies B's option to extend the option period, will this operate to keep B first in the queue as it were and frustrate C's ability to acquire the property free of B's option?
Q&As
This Q&A assumes that: • A (as registered proprietor of the property) applied for the notice protecting each of the options, and so the options are protected by way of an agreed notice • both options were granted after 2002 and so the scheme of the Land Registration Act 2002 applies • negotiated extensions have no contractual force unless supported by value or a deed (Richards v Creighton Griffiths (Investments) Ltd). Therefore,
A is the registered owner of F/H property. A transfers part of the F/H property to B. B fails to register the transfer of part with the LR in time by the time A transfers the F/H property (which includes the part transferred to B) to C. C is registered as the owner of all of the F/H property. When B seeks to register the transfer of part of the F/H, LR reject the application as the F/H is registered in the name C and it is A and not C who is the transferor on the transfer of part. How does B go about getting the LR to register B as the owner of part of the F/H?
Q&As
A transfer of a registered estate is done by the appropriate form, which includes Form TR1 or, where the transfer is of part of a title, Form TP1 (rule 58 of the Land Registration Rules 2003, SI 2003/1417). The effect of the execution of the Form TR1 or TP1 is to transfer the registered estate or relevant
A is the sole beneficiary of the deceased, who died intestate. Several years before the deceased's death, a deputy was appointed to manage the deceased's affairs as they did not have capacity. A alleges the deputy incurred inflated costs, mismanaged the deputyship and disposed of property that A was entitled to. Further, A alleges the deputy mismanaged the estate after the deceased's death. Does A have a claim against the deputy after the deputyship has ended? Would the claim be made as the personal representative of the deceased's estate or as the beneficiary?
Q&As
Locus standi to bring claim on behalf of deceased's estate Section 1 of the Law Reform (Miscellaneous Provisions) Act 1934 provides that all causes of action vested in a deceased person shall survive him for the benefit of his estate. Since an executor derives their title from the Will and not from the grant of probate, they may begin an action as executor before
A is the sole executor and sole residuary beneficiary under B’s Will. C, is challenging the validity of the Will on the grounds of testamentary capacity. There are no court proceedings. A has said he is responding as executor and he asserts that B had capacity and claims his costs of obtaining a medical report and associated solicitors costs can be paid by the estate–is this correct, and is obtaining a medical report going beyond an executor’s duty to remain neutral? Should such costs be borne by A personally in his capacity as beneficiary?
Q&As
Where court proceedings have not been issued, the appropriate action to be taken by A, as executor, will depend on the extent to which the testator’s capacity to make the Will is in doubt and how far C’s challenge to the Will has been taken. The burden of proof of capacity has always rested in the first instance with the person proving the Will. The personal representatives have to prove that the Will is valid. This involves proving that all the necessary
A is the sole legal owner of a property. The beneficial interest is held by A and B as tenants in common in unequal shares pursuant to a declaration of trust. A dispute arose between the parties as to the extent of their beneficial interest under the declaration of trust. The dispute has been resolved and A is paying B a sum of money to buy out B's beneficial interest. How should this be documented? Should it be way of a deed of assignment whereby B assigns his beneficial interest to A or by way of deed which revokes the original declaration of trust?
Q&As
Where registered land is owned jointly, the legal title, if both owners are registered proprietors, is held by the parties as joint tenants, whereas the beneficial title can either be held as joint tenants or tenants in common. In the current scenario, the legal title is only registered in A’s name and therefore A is the sole owner of the legal title to the property and the beneficial interest is held on trust for A and B as tenants
A is the sole owner of a property and they wish to give half of that property during their lifetime to their cohabitee to hold as tenants of common. Is this a potentially exempt transfer and exempt from inheritance tax if A survives for seven years from the date of the gift or is it a gift with a reservation of benefit?
Q&As
Under section 102 of the Finance Act 1986 (FA 1986), where an individual disposes of any property by way of a gift, it may be treated as subject to a reservation if one of the following conditions applies: • the donee of the property did not take possession of the property and did not enjoy the use of the property at the beginning of the ‘relevant period’, ie a period running from seven years before the death of the donor or, if later, from the date of the gift to the date of that death, or • where at any time in the ‘relevant
A joint assured shorthold tenancy is still within the six months fixed term (expires in one month). One of the tenants has moved out and would like to be removed from the tenancy agreement. The remaining tenant would like to stay in the property and continue with a statutory periodic tenancy once the fixed term has expired. The landlord is happy with this arrangement. How does the landlord go about removing one joint tenant from the agreement?
Q&As
Unless there is a break clause, the only way to end an assured shorthold tenancy within the fixed term is by surrender, which may be express or implied, but to which both tenants and the landlord are parties. See Q&A: What are the methods of terminating a joint tenancy during a fixed AST term, where one tenant departs due to domestic abuse and one tenant wishes to remain at the Property? and Practice Note: Lease surrenders. At the expiry of the fixed term, if the tenancy has
A joint attorney under a lasting power of attorney wishes to transfer a freehold property belonging to the donor to their self. Can they do this and if so, if the property is transferred without consideration, is stamp duty land tax payable?
Q&As
If the attorney intends to transfer the freehold title of the property belonging to the donor to their self for no consideration, the transfer of the property would be a gift. There are strict limits on gift giving by an attorney. An attorney’s power under a lasting powers of attorney (LPA) to make gifts is governed by section 12 of the Mental Capacity Act 2005 (MCA 2005). This provides as follows: • ‘Where a lasting power of attorney confers authority to make decisions about P's property and affairs, it does not authorise a donee (or, if more than one, any of them) to dispose of the donor's property by making gifts except to the extent permitted by subsection (2). • The donee may make gifts— (a) on customary occasions to persons (including himself) who are related to or