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21st to 27th of May is Dementia Action Week – an event organised by the Alzheimer’s Society in support of those living with dementia, their families and carers. During the week, the Society asks that choose and share an action to support people with dementia – this might be listening to a person with dementia, being there for their loved ones or simply asking questions and learning more about this debilitating condition. To support the campaign, simply visit the website, choose an action and share the badge that is generated on social media to help raise awareness. For example:


Source: https://www.alzheimers.org.uk/

The word ‘dementia’ describes a set of symptoms that may include memory loss and difficulties with thinking, problem-solving or language. A number of diseases lead to dementia – these include Alzheimer’s disease, Vascular dementia, Mixed dementia, Dementia with Lewy bodies and Frontotemporal dementia (including Pick’s disease).

Around 850,000 people in the UK have dementia and the numbers are likely to reach more than 1 million by 2025, according to the Society. By 2051, the figure could be around 2 million. 225,000 people will develop dementia this year, which equates to one diagnosis every three minutes.

Dementia does not exclusively affect elderly people – there are over 40,000 people under 65 with dementia in the UK.

What you can do

Raise awareness: The Alzheimer’s Society is keen to help people understand the challenges those living with dementia face every day – such as being ignored in conversations, or being overlooked when it comes to planning social events. A simple tweet or Facebook share can help raise awareness of the condition and combat ignorance. Use the hashtag #DAW2018 to join in the conversation.

Look after yourself: The Alzheimer’s Society recommend you take steps to reduce your risk of dementia. These include being physically active, eating healthily, not smoking, drinking less alcohol, exercising your mind (use it or lose it!) and taking control of your health – particularly if you’ve reached mid-life. Certain health issues such as lack of sleep can increase your risk of dementia, so it’s important to get in touch with your GP and get help as soon as possible. You can find out more about reducing your risk of dementia here.

Organise your affairs: Sadly anyone at any age can lose mental capacity, whether by developing dementia or through an accident or stroke. Many people will leave it until later life to make a Will and Lasting Power of Attorney, but this can be a huge mistake. The absence of a Will means the rules of intestacy apply and these don’t always work as expected. Similarly, the absence of a Lasting Power of Attorney can have devastating consequences – accounts can be frozen with no funds available to pay expenses whilst a ‘Deputyship Order‘ is obtained from the Court.

Making a Will and LPA puts you in control of decisions relating to your future and allows you to protect your assets for your children and grandchildren. As none of us really know what the future holds, it’s important to put these documents in place early in life. If you’ve already received a diagnosis of dementia but your condition is still in the early stages, you may still be able to make a Will and Lasting Power of Attorney – however, you will need to act quickly.

Order our free information pack below to find out more – we also offer a free one hour appointment at our offices or at your home address without obligation.

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Around 1 in 2 households own a pet : which means there are about 20,000 million pets in the UK including eight million cats and eight and a half million dogs. But what happens to your pets when you die? Every year thousands die without making proper provision for their canine and feline friends and without adequate plans in place, many will not stay within the family. Fortunately, making provision is easy to do in your Will.

Naming your pet in your Will

For the purpose of your Will, your pet is considered to be personal property. The exception to this is if the pet is a working animal, in which case they might be a business asset.

You can’t therefore leave money directly to your pet – but you can nominate someone to look after them and leave a gift to that person to cover the associated expenses.

In addition to naming who should look after your pet, you can also write a letter of wishes, giving the person who will be caring for your pet all the information they need to know to be your pet’s carer. Your letter of wishes has two main purposes: first, it provides your pet’s carer with vital information such as dietary needs and medical issues, and second, it allows you to specify how you’d like your pet to be cared for. The letter can also contain important information such as microchip ID number, age and breed.

Pet charities

An alternative to nominating a friend or relative as your pet’s carer is to make arrangements with a pet charity. For example, the Cinnamon Trust provides long term care for pets whose owners have died or moved to residential accommodation which will not accept pets. Arrangements are made between owners and the Trust well in advance, so owners have peace of mind in the knowledge that their beloved companion will have a safe and happy future. It is important that your Executors are aware of the arrangements.

Another option is to carry a Canine Care Card, a scheme run by the Dogs Trust who pledge to take care of your dogs if you pass away before they do. If you have a Canine Care Card, this allows the Trust to arrange to bring your dog/s to their nearest rehoming centre. Upon arrival they will be examined by the Trust’s expert vet and cared for by their dedicated, trained staff. The Trust pledges to find your dog new owners whose lifestyle and experience match their needs. But if for any reason your dog cannot be rehomed, you have peace of mind that the Dogs Trust never puts down a healthy dog and will look after them for the rest of their lives.

Practical considerations

If you decide to plan for your pet’s future using your Will, there are a few important considerations.

Firstly, you need to adequately identify your pet. If you only have one pet, you might think that the simplest way may be to refer to them by name! If, however, you have a number of similar animals and you are leaving them to different people, you will need to include more specifics to help your Executors understand which animal you are gifting.

Keep in mind that if you name a particular pet but no longer own it when you die, the gift will fail – even if you have acquired another similar animal before you die. One way to get around this issue is to include a substitute clause such as “any other dog I own at my death”.

Next, you need to decide who will care for your pet – and it makes sense to speak to the person first. Consider the life expectancy of your pet and that of the proposed carer – it may be better to leave a pet with a long life expectancy to a younger carer.

Consider the possibility that even if the person agrees to care for your pet now, they may not be willing or able at the time of your death. You may therefore want to include substitute beneficiaries. You can require that an undertaking to care for your pet is given as a condition of the beneficiary receiving any cash gift you are leaving for the pet’s upkeep.

If you can’t decide who should take care of your pet now, an alternative is to gift your pet to your Executors along with a cash sum and write a letter of wishes indicating what the money is for and how you’d like them to choose a carer. Note that if the cash sum you have left is inadequate, your Executors have no power to make a payment from your estate for the care of your pets unless you have given them discretionary powers over the residuary estate, or unless the beneficiaries of the residuary estate agree to the payment. It is therefore important to ensure you leave a sufficient sum for your pet’s upkeep.

How much money to leave

If you plan on leaving an absolute cash gift to cover the expenses of caring for your pet, you need to work out the likely cost that will be incurred during their lifetime. The true costs are typically underestimated – for example, according to research by the People’s Dispensary for Sick Animals (PDSA) you’ll spend a staggering £21,000 to £33,000 on your dog during their lifetime, depending on size and breed. Dogs generally live for 10 – 13 years, so the outgoings could be £2,000 or more a year. Annual costs will depend on the age of your pet – older pets typically may have higher expenses for medication and vet bills, although pet insurance may be an option.

If you leave an absolute cash gift, keep in mind the effect of inflation. You may want to increase the gift – for example in line with the Retail Price Index – so that it maintains its value in comparison to the cost of living.

It is important that the gift you leave is adequate – otherwise, you may find that your chosen beneficiary is unwilling to accept the responsibility of caring for your pet, or may not follow the instructions in your letter of wishes.

Creating a trust

Rather than making an absolute gift for the costs of caring for your pet, you could create a trust for your pet’s maintenance. Whilst generally the law does not allow trusts to be created where there are no beneficiaries to enforce them, there is an exception for trusts created with the purpose of providing for the maintenance of animals. The trust is known as a “trust of imperfect obligation” because the objects of the trust – your cat, dog or other pet – will not be able to bring proceedings to compel its performance.

The law requires that the trust is limited to a period of 21 years. If there is a possibility that your pet may survive beyond 21 years from the date of your death, the trust is unlikely to be suitable.

Practically, these trusts can be problematic – for example, the question may arise of how the trustees’ expenses should be met if there is insufficient funds in the trust; or how a trustee should be replaced if they are (or become) unable or unwilling to act.

A perhaps preferable solution may be to include your pet in a discretionary trust of your residuary estate. This would put the trustees in a similar position to your Executors, had you left the pet to them – they can decide who should care for the pet, with the help of any letter of wishes you have drafted. However, they would also have the benefit of access to funds in the residuary estate. Such trusts would not be solely for the benefit of your pet so many of the practical problems that occur with a 21 year trust will not arise.

If you decide on the latter option, it is important to ensure that your pet has not already been gifted as personal property elsewhere in your Will – otherwise, they will not fall into your residuary estate.

If you’ve already made a Will

If you’ve already made your Will, it is possible to add in provisions relating to your pet using a ‘Codicil’. This is a simple document that needs to be signed and witnessed in the same way as a Will. It allows you to make amendments to your existing Will instead of drawing up a completely new one.

However, we would only recommend using a Codicil for small, simple changes – and we always recommend that you review your Will every few years anyway, to take into account changes in personal circumstances, tax rules and legislation. Why not use this as the perfect opportunity to review your Will with one of our expert team? There’s no charge for our one hour free appointments and we can usually see you at our offices or in the comfort of your own home. Fill out the form below to receive our completely free Wills information pack, without obligation.

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Unless you’ve been ignoring your inbox over the past few weeks, you’ve probably been inundated with requests to update your ‘privacy’ or ‘marketing’ preferences, in preparation for the General Data Protection Regulation (GDPR) which will apply from Friday 25th May 2018. The Regulation brings huge changes to how organisations handle your data, and your rights as a ‘data subject’. Here, we look at some of the changes that are likely to affect you.

Collecting data

Whether you’re purchasing goods, using a business to provide services or simply visiting a website, the organisations you are dealing with will likely be collecting data about you.

If you’re just a website visitor, chances are that the data will be largely generic and anonymous. This helps the organisation understand how many people visit its website, what devices they are using to view the site, which content is most useful and so on.

If the website also collects your IP address, this is classed as ‘personal data’. Personal data is any data capable of identifying you as an individual.

If you complete a contact form, phone the organisation or email them, you may also provide other data such as your name, address, phone number and email address.

In the past, you might have accidentally consented to the organisation handling this data in intrusive ways. For example, organisations may have used confusing combinations of check boxes on their website contact forms where you had to check/uncheck the right combination to avoid being sent marketing emails. Others may have said that sending you marketing communications was a condition of using their services. The GDPR changes all of that.

From Friday, your consent to communications will need to be positive – that is, you’ll have to opt-in to receive marketing communications. This means checking a box on an online form or piece of paper, or positively consenting over the telephone. They cannot use your refusal of consent as a basis for not serving you.

If you already opted into communications in the past, the organisation may be able to rely on that consent to continue contacting you – but only if the consent was obtained in a GDPR-compliant way and the organisation can prove it. In reality, it probably wasn’t – which is why so many organisations are contacting you now.

Note that if you get a message asking you to opt in and you have never contacted the organisation before, this could land them in deep water. Last year the ICO fined Honda and Flybe a total of £83,000 for sending opt-in messages to people who they could not prove had ever consented to hear from them in the first place.

Granular consent

In the past, organisations have frequently lumped consent options together – for example, asking for consent to email you, then sending you everything from service-related emails and important updates to newsletters, special offers and so on. You may have also found that your data was shared with third parties without your knowledge, thanks to a clause buried deep in their website terms and conditions.

Now, organisations have to be very specific about how they are handling your data. They must consider:

  • What data they collect
  • How it is stored
  • How long it is stored for
  • Why they collect it  / how it is used
  • Who it is shared with

This must all be set out in their Privacy Notice which needs to be accessible at the point where they take your data. If you’re making contact through their website, chances are there will be a link to the Privacy Notice on the contact form. If you’re contacting them via telephone, they may let you know where you can find their Privacy Notice (for example, on their website). This saves you the annoyance of having to sit through a lengthy recital.

Under the new Regulation, your data must be collected for “specified, explicit and legitimate purposes” and “not further processed in a manner that is incompatible with those purposes”. Consequently, you’ll probably see a lot more boxes on website contact forms going forward, with organisations asking for consent to different types of communication.

Call recording

We’ve all heard those messages at the start of phone calls ‘Your call will be recorded for quality and training purposes’ – but for most organisations, they’ll need to change.

As a result of the GDPR, organisations will now need to ask your consent to record calls, and must stop recording/delete the recording if consent is not obtained. There are a few exceptions – for example where the recording is necessary for the fulfilment of a contract with you, or necessary to fulfill a legal requirement.

Legitimate interests

Some organisations intend to rely on what the Regulation calls ‘legitimate interests’ as a basis for using your data – typically where you have already purchased a product or service from them. This means they will not necessarily contact you to ask you to opt in to future marketing.

They will be permitted to rely on legitimate interests for marketing activities if they can show that how they use people’s data is “proportionate, has a minimal privacy impact, and people would not be surprised or likely to object” to the communications. Further, they will have to conduct a balancing test to establish whether their interests outweigh yours. The test has to be documented for future reference.

In addition, if they intend to send you marketing messages via email, they will need to consider existing Data Protection legislation such as the Privacy and Electronic Communications Regulations (PECR) which sits alongside the Data Protection Act and the GDPR.

The rules on electronic mail marketing are in Regulation 22 of the PECR. In short, organisations must not send electronic mail marketing to individuals, unless:

  • the individual has specifically consented to electronic mail from the organisation; or
  • they are an existing customer who bought (or negotiated to buy) a similar product or service from the organisation in the past, and the organisation gave them a simple way to opt out both when it first collected their details and in every message it has sent.

If therefore the organisation did not give you a simple way to opt out of marketing communications when they first collected your data (for example, on a website contact form or order form), or did not give you this option in future emails, they will not be able to rely on ‘legitimate interests’ and must get your specific, granular consent to future marketing communications. If they do not, they will be in breach of the GDPR.

Your right to opt out

In many cases, you may want the organisation to continue handling your data – for example, if you have a contract with them.

However, sometimes you may find that an organisation continues to send you messages long after you’ve lost interest in their services. All organisations will also have to provide you with the option to opt out of all future communications. This information will be contained in their ‘Privacy Notice’. If you contact them and request that they stop processing your personal data, they will have to respect this.

You can of course ask an organisation to stop processing your data for the purpose of direct marketing, without affecting any contract they may have with you. They are not permitted under the GDPR to make marketing emails compulsory when you use their services.

Data portability

The GDPR introduces a new right for you to ask organisations for data in a machine readable format, allowing you to use it for various purposes. This could be useful for example in helping you to secure a better energy deal.

Automated decisions

The GDPR gives you the right to object to automated decisions being made about you where the decision has a significant effect on you. This might be, for example, where you have applied for a loan and the organisation uses an algorithm to accept or reject your application. You can ask a human to review the decision, although this is no guarantee that the outcome will be the one you want!

Serious data breaches

Under the GDPR if there is a serious breach of your data, organisations must tell you what has happened in clear terms. They must also report the breach to the Information Commissioner’s Office (ICO) within 72 hours of becoming aware of it. If the organisation reports to the ICO but does not inform you of the breach, the ICO can compel them to inform you. You may be able to claim compensation in certain circumstances.

Fines

It has been no secret that the ICO will have powers to fine those breaching the new rules severely – up to €20m or 4% of their annual global revenue, whichever is higher.

In practice, most people think it unlikely that the ICO will use the powers to their full extent and fines are expected to be on a par with those currently being issued. Under current rules the highest fine possible for a serious data breach is £500,000.

Subject access requests

Previously, you’ll probably know that you had the right to ask an organisation for a copy of the data they hold about you. However, organisations were allowed to charge a fee for providing this information, and could take up to 40 days to respond. Under the GDPR, ‘subject access requests’ will be free and must be processed within a month. But why would you want to make one?

One possible reason is if you think that an organisation is not processing your data lawfully.

Where your request to the organisation is complex, they will be able to extend the one month period to three months. However, they will have to let you know within a month of your request if they intend to do this.

If you make a request that is excessive or unfounded, the organisation has a right to charge you a fee, or to refuse to action the request.

Our Data Protection Policy and Privacy Notice

Our own Data Protection Policy and Privacy Notice sets out how we collect, use, store and share your data, together with an outline of your rights. You can view the Policy and Notice here. We are keen to be as transparent as possible and our Policy/Notice is written in plain English rather than legal jargon for that very reason. However, if you do have any questions at all, please don’t hesitate to contact us.

If you’ve received our newsletter in the past but you didn’t spot our recent email opt-in request, it’s possible you won’t receive our newsletters from now on. However, it’s really easy to sign up – just click here and complete the form. Remember, you can unsubscribe at any time by simply clicking the link at the bottom of any Newsletter edition.

The post The General Data Protection Regulation (GDPR) – what is it? appeared first on April King.

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MPs are calling for the government to give grandparents rights to see their grandchildren after a divorce. They are proposing a change to the Children Act which would give children the right to maintain their relationship with members of their extended family. In addition to grandparents, the change would also facilitate contact between aunts and uncles with their nieces and nephews.

Under current rules, relatives wishing to continue contact must ask the court for permission to make an application for access rights. There is no statutory right for a grandparent to see their grandchild and every case is considered on its own facts. Successful applications will usually result in a Child Arrangements Order.

However, during a debate last week, Conservative MP Nigel Huddleston said he was aware of grandparents who had been accused of harassment and were visited by police after sending birthday cards and Christmas gifts to their grandchildren.

He said:

“Divorce and family breakdown can take an emotional toll on all involved, but the family dynamic that is all too often overlooked is that between grandparents and their grandchildren.

“When access to grandchildren is blocked, some grandparents call it a kind of living bereavement.”

Labour’s Darren Jones noted that there was now cross-party support for a change to the law.

Children’s minister Nadhim Zahawi said the government would consider proposals that could improve the system, but the wellbeing of the child would be the overall consideration.

He stated:

“If we keep the child front and centre, we will always do the right thing.”

Grandparents’ rights were last examined as part of the independent Family Justice Review in 2011. The report concluded that Child Arrangements Orders were an appropriate solution to

“prevent hopeless or vexatious applications that are not in the interests of the child”.

A Ministry of Justice spokesperson said:

“The welfare of a child is the primary consideration for the family courts and steps are taken wherever possible to reduce the impact of family conflict on children when relationships end. We will consider any proposals for helping children maintain involvement with grandparents, together with other potential reforms to the family justice system, which are currently being looked at.”

What you can do in the meantime: (1) Mediation

If you are a grandparent who has been denied access to your grandchildren, first consider whether mediation might be helpful. This involves speaking to the child’s parents or guardians with the help of a trained mediator and trying to reach an agreement.  Mediation is a good way to preserve or rebuild relationships, in contrast with taking court action which rarely results in positive feelings between the parties.

(2) Asking the Court for permission to make an application

If mediation proves unsuccessful, you will need to ask the Court for permission to make an application. We can assist with this process.

When deciding whether to grant permission, the Court will take into account:

Nature of application: This means that the Court will consider the fact that you would like a Child Arrangements Order and what you have requested (e.g. type and frequency of contact).

Your connection to the child: This means that the Court will consider both the blood relationship that exists between you and child, and the actual relationship existing between you and the child. For example, it would be relevant if there was currently frequent contact plus contact prior to the child’s parents splitting. The more meaningful and important the connection is to the child, the greater weight the Court will give to this factor (Re M (Minors in care) (Contact: grandmother’s application) [1995] 2 FLR 86).

Any risk there might be of the proposed application disrupting the children’s life to such an extent that they would be harmed by it: “Harm” means ill-treatment or the impairment of health or development including, impairment suffered from seeing or hearing the ill-treatment of another.

The Court could deny you the right to see the child if seeing them would impair their health or development. However such an impairment would have to be quite severe for the Court to refuse contact (Re M (Minors in care) (Contact: grandmother’s application) [1995] 2 FLR 86). If there has been no contact, the Court may take the view that the children are at risk of harm by not re-establishing contact. There may be practical ways to deal with genuine concerns that still allow for contact.

Merits of the application: The test is whether you have an arguable case (rather than a good arguable case) (Re B (A child) (Care proceedings: joinder) [2012] EWCA Civ 737).  However, establishing that an arguable case exists is not in itself sufficient to obtain permission and the court will need to consider all of the relevant factors (some of which may outweigh the conclusion that there is an arguable case).

Other factors: The Court is not limited on which factors they can take into account when considering an application for permission and the factors contained in the welfare checklist could still be relevant to the decision.

(3) Applying for a Child Arrangements Order

Once the Court has granted permission, an application can be made for a Child Arrangements Order. When deciding whether or not to grant an order, the child’s welfare must be the Court’s paramount consideration.

The Court will take into consideration:

  • The ascertainable wishes and feelings of the child (considered in light of their age and understanding) 
  • The child’s physical, emotional and educational needs 
  • The likely effect on the child of any change in circumstances
  • The child’s age, sex, background and any characteristics which the Court considers relevant.
  • Any harm that the children have suffered or are at risk of suffering
  • How capable the applicant is of meeting the children’s needs 
  • The range of powers available to the Court

There is a ‘no order’ presumption which requires that the Court will not make any order unless it considers doing so would be better for the child than making no order at all.

Further, the Court must have regard to the fact that delay in reaching a decision could prejudice the welfare of the child (particularly relevant if the child is very young).

Hostility: Sometimes there will be hostility between the grandparents and the child’s parents or guardians.

In Re S (A minor) (Contact: grandparents) [1996] 1 FLR 158, the Court of Appeal held that contact should not be denied simply because the parent with whom the child lives indicated that they opposed contact and would not co-operate with a contact order.

By contrast in Re W (A minor) (Contact: application by grandparent) [1997] 1 FLR 793  the High Court upheld the magistrates’ decision to deny direct contact because of extreme hostility. The Judge encouraged indirect contact and emphasised that in the future direct contact may be appropriate.

It is clear that should the opportunity should arise, those seeking contact should make all effort to improve their relationship with the parent or guardian and ensure that they do not show any hostility towards the child’s parents/guardians before or during the proceedings. This is why mediation can be an effective way forward.

Prospect of success:

There is no presumption that contact with a grandparent is in the children’s best interests. In Re A (A minor) (Grandparent: contact) [1996] 2 FLR 153 it was suggested that for extended family members, the burden remains on an applicant to demonstrate that contact is in the child’s best interests. The burden then shifts to anyone opposing contact to show why it should not take place.

However, the courts do recognise the value to a child of contact with grandparents. In Re J (A child) [2002] EWCA Civ 1346 Thorpe LJ said that it is important that trial judges recognise the valuable contribution that grandparents make.

If you are experiencing issues with contact, get in touch for advice – call us on 08700 120 130 or email info@aprilking.co.uk.

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A recent news report in the Times has highlighted that the Government’s online Stamp Duty calculator is providing some users with incorrect calculations, failing to take into account stamp duty discounts available on certain properties.

Whilst HMRC has responded by saying most buyers pay the correct amount, it has pointed out that the online calculator is meant to be a guide, not a final figure. However, solicitors have said they frequently use the calculator, particularly in time sensitive transactions where seeking advice directly from HMRC would mean a long turnaround time.

If you’ve paid too much stamp duty as a result of an incorrect calculation or lack of awareness that a particular relief is available, you might be able to claim a refund. We explain the different rates of stamp duty and the circumstances under which a relief or exemption may be available:

Residential property Stamp Duty rates

The Stamp Duty rates that apply for purchases of residential freehold property (i.e. a typical house) where the buyer has purchased a home previously are as follows:

  • Properties up to £125,000 – £0
  • The next £125,000 (the portion from £125,001 to £250,000) – 2%
  • The next £675,000 (the portion from £250,001 to £925,000) – 5%
  • The next £575,000 (the portion from £925,001 to £1.5 million) – 10%
  • The remaining amount (the portion above £1.5 million) – 12%

You can use the HMRC Stamp Duty Land Tax calculator to find out how much stamp duty will be due for standard transactions.

Reference: Stamp Duty Land Tax : Residential property rates

Discounts for first time buyers

First time buyers enjoy a generous discount on standard Stamp Duty rates

The First Time Buyer relief has applied from 22nd November 2017. If you’re a first time buyer, you’ll pay a discounted rate of Stamp Duty – provided that your home costs no more than £500,000. The rates for first time buyers are:

  • Properties up to £300,000
  • The next £200,000 (the portion from £300,001 to £500,000) – 5%

If you’re buying with a partner, they must also be a first time buyer to take advantage of the special rates. If your property is worth more than £500,000, you’ll pay the standard Stamp Duty Rates on the whole transaction instead.

Reference: Stamp Duty Land Tax: relief for first time buyers – HMRC guidance note

Rates for additional properties

If you already own a property, a second home in the UK would attract the 3% uplift in Stamp Duty rates

Usually, you’ll have to pay 3% on top of the normal Stamp Duty rates if you purchase an additional residential property for more than £40,000. This might be for example a property you intend to rent out, a property you’ve purchased with one of your children for their use, or a holiday home.

The rates payable are 3% above the standard rates above.

The higher rates do not apply to purchases of:

  • non-residential or mixed use properties (see below);
  • transactions where the consideration is less than £40,000; and
  • caravans, houseboats and mobile homes.

Note that if you’re purchasing a property with one of your adult children to aid their mortgage application, a number of mortgages exist that allow you to be a joint party to a mortgage without needing to appear on the title deeds. The advantage of this is that usually you will not have to pay the 3% increase in stamp duty for owning an additional property. In addition, it should also mean that as a sole purchaser who plans to live in the property purchased, your child can claim the first-time buyer’s relief. However, you’ll need to take independent legal and financial advice to satisfy yourself that this type of product is suitable for your needs. See ‘Will my son get first-time buyer stamp duty relief if we get a joint mortgage?’ ~ The Guardian.

Reference: Stamp Duty Land Tax: buying an additional residential property

Replacing your main home

Sometimes it may be necessary to move home before you’ve sold your old property – and this means you’ll end up paying the higher rate of Stamp Duty on your new home (i.e. the 3% increase for second properties). However, if you then sell your previous main home within 36 months, you’ll usually be able to claim a refund of the extra Stamp Duty paid.

Buying a home with a ‘granny flat’

Provided that your Granny flat is worth no more than 33% of the overall transaction, the higher rates of Stamp Duty for second properties should not apply.

When the Stamp Duty rules which hiked fees for the purchase of a second property were initially conceived, someone buying a property which counted as two dwellings (e.g. a house and a granny flat) would have been liable to pay the 3% Stamp Duty uplift on the whole purchase price. This would even have been the case if the main property was to be used as the buyer’s only residence.

Fortunately, an amendment was made to rectify this unintended position. According to the guidance note, the amendment:

“removes some transactions from the higher rates of [Stamp Duty] where such an annex or outbuilding is the only reason that the higher rates would apply.”

Now, the standard rate of Stamp Duty will apply where:

  • Dwelling A in the same building as, or in the grounds of Dwelling B, and
  • Dwelling B is at least two thirds of the value of all of the purchased dwellings (including Dwelling B) within its grounds.

In other words, if you purchase a home with a self-contained granny flat attached or within the grounds, you’ll pay the standard residential rate of Stamp Duty as set out above provided that the value of the Granny Flat is no more than a third of the overall price paid. If there is more than one self contained property, the overall value of the self contained properties must be no more than a third of the total price paid.

There is no actual requirement that the self contained properties be used as a granny flat. Indeed, if the value of the self contained properties is more than a third of the price paid but they are to be used as commercial lets, a claim for mixed use may be possible, which could be advantageous for higher value properties. Alternatively you may be able to claim Multiple Dwellings Relief. If you believe either may apply, we would suggest contacting the solicitor who dealt with your purchase for advice.

Multiple Dwellings Relief

Multiple Dwellings Relief can offer substantial savings in Stamp Duty, due to the multiple use of the lower rates in the Stamp Duty charging bands.

If you’ve purchased more than one property at the same time, Multiple Dwellings Relief (MDR) may assist in reducing the total Stamp Duty payable. To calculate the amount of Stamp Duty payable, you:

  • Divide the total amount paid for the properties by the number of dwellings
  • Work out the tax due on this figure
  • Multiply this amount of tax by the number of dwellings

This is subject to a minimum rate of 1%.

HMRC provides a helpful worked example:

  • You buy 5 houses for £1 million.
  • £1 million divided by 5 is £200,000.
  • The amount of SDLT you pay on £200,000 is £1,500 (0% of £125,000 + 2% of £75,000).
  • £1,500 multiplied by 5 is £7,500.
  • But that’s less than 1% of £1 million, which is £10,000. The amount of Stamp Duty you pay is £10,000.

As noted above, if you purchase a property with a granny flat or similar self contained unit where the value of the unit is more than 33% of the overall price paid, it may be worth considering whether Multiple Dwellings Relief would apply, thereby avoiding the 3% hike for second homes. We would suggest speaking to the solicitor dealing with your transaction for advice.

Non-residential property

There are different rates of Stamp Duty charged for commercial property.

If you buy commercial premises such as a shop, office, agricultural land or forest, or 6 or more residential properties bought in a single transaction, the non-residential/mixed property Stamp Duty rates apply.

These are as follows:

  • Up to £150,000 – £0
  • The next £100,000 (the portion from £150,001 to £250,000) – 2%
  • The remaining amount (the portion above £250,000) – 5%

If you are purchasing or have purchased a number of properties (e.g. 8), you will need to work out whether it is more tax efficient to claim Multiple Dwellings Relief or to pay the non-residential/mixed property rates. If you believe you have overpaid, we would suggest contacting the solicitor who dealt with the purchase for advice.

Reference: Non-residential and mixed use land and property rates

Mixed use property

Farmland, paddocks or similar which is outside of the ‘curtilage’ of your home may allow you to use the mixed use Stamp Duty rates.

Buyers who purchase a property that has a mixed use : i.e. residential and commercial or residential and farmland, may be able to use the non-residential/mixed property tax rates set out above. This may be of little advantage for lower value properties, but for higher value properties it can make a significant difference to the amount of Stamp Duty that is paid.

The relief may apply where you have land considered to be outside the ‘curtilage’ of your home and therefore not for the ‘amenity’ of the dwelling. An example might be fields that are rented to a local farmer, paddocks rented to a local riding school and so on. The relief will not apply where the land is considered to be for the amenity of the house.

Take, for example, a property purchased for £1.5m which includes a field rented out to a local farmer. If the standard residential rate of Stamp Duty were applied, Stamp Duty would be charged at £93,750:

Purchase price bands (£) Percentage rate (%) SDLT due (£)
Up to 125,000 0 0
Above 125,000 and up to 250,000 2 2,500
Above 250,000 and up to 925,000 5 33,750
Above 925,000 and up to 1,500,000 10 57,500
Above 1,500,000+ 12 0
Total Stamp Duty: 93,750

If mixed use rates are applied, the Stamp Duty would be £64,500 (based on the rules from 17 March 2016):

Purchase price bands (£) Percentage rate (%) SDLT due (£)
Up to 150,000 0 0
Above 150,000 and up to 250,000 2 2,000
Above 250,000+ 5 62,500
Total Stamp Duty: 64,500

Mixed use rates also apply to other types of property – such as a shop with a residential flat above.

If you believe you may have paid the standard residential Stamp Duty rates on a purchase that could be classed as mixed use, we would suggest contacting the solicitor who dealt with the purchase for advice.

Applying for a refund of Stamp Duty

If you want to apply for a refund because you purchased a new home before selling your old one (and therefore paid the uplifted ‘second home’ Stamp Duty rates), click here for guidance. Note that this type of refund must be claimed within 3 months of the sale of the previous main residence or within 12 months of the filing date of the return, whichever comes later.

If you are applying for a refund in any other circumstances – for example, because one of the reliefs should have applied, HMRC advise that you should write to Stamp Duty Land Tax Office, quoting the UTRN and including a copy of the original SDLT return with your claim. They ask that you:

  • explain why you think you’ve overpaid
  • say what parts of the SDLT return were wrong
  • give revised figures and confirm the amount of refund due
  • confirm who they should pay the refund to.

The deadline for claiming back tax you’ve overpaid is 4 years from the effective date of the transaction. This is usually the completion date for the purchase of the property or properties.

Reference: Stamp Duty Land Tax: online returns – claim a refund

Disclaimer: This article does not constitute financial or other professional advice and is general in nature. It does not take into account your specific circumstances and no lawyer-client relationship is formed. You should consult with a lawyer or other professional to determine what action may be best for your individual needs.

The post Could you be entitled to a refund of stamp duty? appeared first on April King.

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In a recent decision, the High Court has ruled in favour of a woman who was left nothing from her late partner’s £1.5 million estate.

The case involved a claim brought under the Inheritance (Provision for Family and Dependants) Act 1975 by 79-year-old Joan Thompson against the estate of her late partner, Wynford Hodge. The Deceased left his entire estate, valued at £1,535,060, to tenants and friends.

Ms Thompson and Mr Hodge had lived together for 42 years ‘as man and wife’. Ms Thompson was financially dependent upon Mr Hodge throughout that time and at his death. Accordingly, the Court found that she was entitled as a cohabitee to claim either under Section 1(1) (ba) or (e) of the 1975 Act that the last Will did not make reasonable financial provision for her. In either case, that meant she could claim under Section 1(2):

“such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for [her] maintenance”.

His Honour Judge Jarman QC noted:

“The real issue in this case, in my judgment, is what amounts to reasonable financial provision for Mrs Thompson’s maintenance. The powers of the court to make orders to provide for such provision are set out in Section 2 of the Act and are very wide. It is not in dispute that this includes provision for her accommodation and care needs.”

The judge went on to consider Ms Thompson’s needs, together with the needs and resources of the fourth and fifth defendants to the claim, Karla Evans and Agon Berisha – the tenants who stood to receive a substantial portion of Mr Hodge’s estate under his Will.

He further considered what obligations and responsibilities the Deceased had towards Ms Thompson and towards the tenants Ms Evans and Mr Berisha. Notably the Deceased’s earlier
Wills did make provision for Ms Thompson, and his reasons for not making provision in his most recent Will were that she would not need the money. Mr Hodge believed she would not be able to live in any property independently and would need to go into a home following his death – but in fact the most recent medical report indicated that Ms Thompson was

“…certainly fit enough to reside in private accommodation with a relevant social care package.”

Further relevant factors included the length of time and the basis on which Mr Hodge maintained Ms Thompson, the extent of the contribution, and the extent to which he assumed responsibility for her maintenance.

The Judge held that it was reasonable Ms Thompson should have Elidyr Cottage, worth £225,000, for her accommodation – a property that had originally been purchased for the couple to reside in.

He considered the question of whether Elidyr Cottage should be transferred to her outright or whether she should be offered a life interest,  referring to the recent well-publicised case of Ilott v The Blue Cross. In that case, the Supreme Court emphasised that the statutory power is to provide maintenance, not to confer capital. In the Ilott judgement Lord Hughes referred to an earlier similar case involving an adult child (Re Myers) in which the award made was not of an outright capital sum but of a life interest together with power of advancement designed to cater for the possibility of care expenses in advanced old age. Lord Hughes observed that:

“If housing is provided by way of maintenance, it is to be provided by way of maintenance, it is likely more often to be provided by such a life interest rather than by a capital sum.”

However, there are other cases where an outright transfer has been made: for example, in Negus v Bahouse a flat was awarded outright to the cohabitee of the deceased on the basis that a clean break was needed from the deceased’s family; and a similar approach for similar reasons was taken in Webster v Webster.

Noting that all cases are fact sensitive, his Honour Judge Jarman QC ruled that it was reasonable for Ms Thompson to have Elidyr Cottage outright rather than a life interest. This would allow Ms Thompson to take decisions relating to her home, such as making structural alterations or raising money without the need to seek permission. In addition, the judge awarded £28,844.68 for necessary alterations, and £160,000 for future maintenance and care. This left the tenants Ms Evans and Mr Berisha with by far the major part of a substantial estate.

Judge Jarman concluded:

“Whilst the wishes of Mr Hodge that Mrs Thompson’s family should not benefit from any provision for her should be given appropriate weight, those wishes should not hinder the reasonable provision for her maintenance. That is the mistake that he made in his letters of wishes which led to no provision at all being made.”

References: Contesting a Will

If a loved one has passed away who did not make reasonable provision for you in their Will, you may be able to make a claim against their estate. Get in touch to for a chat without obligation:

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Most people will have heard of a Lasting Power of Attorney – the document that allows you to nominate someone you trust to make decisions for you, in the event that you lose mental capacity. Lasting Powers of Attorney replaced Enduring Powers of Attorney and can be made in respect of two types of decisions: those concerning your finances and property, and those concerning your health and care.

If you lose mental capacity and you have not made a Lasting Power of Attorney (LPA), someone will have to apply to the Court of Protection for a Deputyship Order in order to make decisions on your behalf. Just like LPAs, there are two types of Deputyship Order: one concerning finances and the other concerning health and care decisions. Someone who is appointed to make either type of decisions for you by the Court of Protection is called a Deputy.

So is it better to make a Lasting Power of Attorney now; or leave those close to you to apply for a Deputyship Order in the future, should one be needed?

Nominate someone you trust

If you make a Lasting Power of Attorney, you can decide who should be in charge of your affairs in the event that you lose mental capacity. This allows you to choose someone you trust as your ‘Attorney’ rather than leaving things to chance.

Your attorney needs to be 18 or over and must have the mental capacity to make their own decisions. They could be:

  • a relative.
  • a friend.
  • a professional, for example a solicitor.
  • your husband, wife or partner.

If you don’t make a Lasting Power of Attorney, anyone can apply to the Court for a Deputyship Order – and although typically this will be a close friend or relative, it may not have been the person you would have chosen.

Consider, for example, those within your family or friendship circle that are not particularly good with money: would you want them to act? If you lose mental capacity and there is no LPA in place, there is nothing to stop them from applying to be your sole Deputy for property and finance, giving them the power to make financial decisions and investments for you.

You can appoint more than one attorney

With a Lasting Power of Attorney, you can nominate either one or a number of people that you trust to be your attorneys. You can also specify replacement attorneys, if your original choices are unable to act.

With a Deputyship Order, it may be that only one person applies to the Court for the right to make decisions for you. This would allow them to exercise all of the powers awarded by the Court, without consulting anyone else. However, Deputies do have to keep records and report to the Court of Protection each year.

You decide on the limit of powers

With a Property and Finance Deputyship Order, the Court decides what powers your Deputy should have. For example, they might grant your Deputy the power to make investments on your behalf or to sell your home.

With a Lasting Power of Attorney, you are free to limit your Attorney’s power as you choose. Provided that you include the limitations within the ‘Instructions’ box of the LPA form, the limitations will be binding on your Attorneys.

Compare:
Lasting Powers of Attorney Deputyship Order
Attorneys must follow any instructions/limitations that you have  included in the Lasting Power of Attorney. You can for example specify that they may not sell your home or make gifts on your behalf. Deputies must act within the powers afforded to them by the Court.  For a Finance Deputyship Order, typically these will include the power to manage your money, pay bills, make reasonable gifts (that you would have made), and make investments.  They may also ask the Court to grant them the power in the Order to sell your home.
You decide how your attorneys can make decisions

With a Lasting Power of Attorney, you can decide whether your attorneys must make decisions jointly, or whether they can make them ‘jointly and severally’ which would allow them to act both together and alone.

With Deputyship, the person applying to be Deputy will ask the Court to make the order either for:

  • Sole deputyship
  • Joint deputyship
  • Jointly and severally

If the Court appoints a sole deputy, they will be able to act without consulting anyone else. If the Court appoints more than one Deputy, it may allow them to make decisions ‘jointly and severally’ which means they can exercise their powers (such as making investments) without consulting each other.

Cost: Lasting Powers of Attorney v Deputyship

Perhaps one of the most compelling reasons to make a Lasting Power of Attorney now is relatively cheap cost involved, compared to the costs of applying for a Deputyship Order.

Compare:
Cost to make both types of Lasting Power of Attorney
(finance+ Health)
Cost to apply for both types of  Deputyship Order
Court fees : £164 (£82 per LPA) Court fees : £800 (£400 per order)
Legal fees : £480 + VAT (£240 per LPA) Legal fees : £900 + VAT
Cost for Doctor to complete form COP3 (evidencing loss of mental capacity) : £50 – £300
Hearing fee (if necessary) : £500
New Deputy Fee : £100 per Deputy
Security bond : depends on size of estate
Supervision fee: £325 per year in most cases

Clearly it is far cheaper to make a Lasting Power of Attorney now than for your friends or relatives to apply for a Deputyship Order at a later stage.

Finding the funds

If someone successfully applies for a Finance Deputyship Order to make decisions for you, the fees can be taken from your funds once the order is granted. However, the applicant will need to pay the fees up front, which may be a heavy burden.

If someone applies only for a Health and Care Deputyship Order, they will have to pay the fees up front and cannot recoup them from your funds.

If someone applies for both types of order, they can recoup the fees from your funds once the orders have been granted but again, must find the funds up front.

There is help available with court fees for those on very low incomes: for Finance Deputyship Orders, eligibility is based on your income/savings, while for Health/Care Deputyship Orders, eligibility is based on the applicant’s income/savings. As proof of income/savings is required for help with court fees, often applicants will have to find the funds up front anyway as they will not yet have access to accounts to provide the necessary evidence.

The issue of funding can be problematic if a Deputyship Order is needed with some urgency but nobody can pay the fees. This might happen if, for example, funds are urgently to pay for care, or a disagreement arises with your Consultant, Social Worker or the Local Authority as to where you should live.

Speed to act

Without a Lasting Power of Attorney in place, an application to the Court must be made – and this is not a quick process. Typically it takes 9 – 12 weeks to appoint a Deputy, or longer if there is a dispute as to who should act. In the meantime, there may be no access to your funds to pay bills or care fees. Urgent applications can be made if there is a genuine need – for example, if you were discharged from hospital and the funds were needed immediately for care – but even urgent applications will take 2 – 3 weeks to deal with.

With an LPA in place, your Attorneys can act for you immediately, provided that the LPA has been registered. There is no delay in accessing much-needed funds in an urgent situation.

Arguments

If you don’t have a Lasting Power of Attorney in place and a Deputyship Order is needed, will your friends and family agree on who should be Deputy? The person or persons who decide to make the application have a duty to notify all other people involved in your life and at this stage, others may want to be involved with the proceedings. Where there is a dispute, a hearing will typically be necessary, resulting in a hearing fee of £500 (plus any solicitor’s fees if the Court decides you need separate representation). Making an LPA saves stress and arguments down the line.

The requirement to involve you

Whether you make an LPA or someone has to apply for a Deputyship Order to act for you, your Attorney/Deputy has a duty to try and involve you in the decision making process.

Compare:
Lasting Power of Attorney Deputyship Order
Your Attorneys must help you to make your own decisions as much as you can Your Deputies must help you to make your own decisions as much as you can
Your Attorneys must make any decisions in your best interests Your Deputy must make any decisions in your best interests

It is simpler, cheaper and quicker to make a Lasting Power of Attorney than for a friend or relative to make an application for Deputyship in the future. To find out more, order our free information pack (click here). We offer a free 1st appointment to discuss your situation which can be at one of our 50 offices or at your home address.

The post Deputyship Order v Lasting power of Attorney: which is best? appeared first on April King.

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Overview

From 1st April 2018, Landlords renting out properties in the private sector will need to achieve a minimum energy performance rating of E on an Energy Performance Certificate (EPC).

These standards, imposed by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, will apply on the grant of a new tenancy or renewal of an existing tenancy from 1st April. The regulations will be extended to cover existing tenancies from 1st April 2020.

Only certain types of tenancy are caught by the Regulations, but these include the most common types: assured tenancies (shorthold or otherwise).

Under the Regulations, it will be unlawful to rent a property that does not meet these minimum energy efficiency requirements unless the property meets one of the exemptions. Landlords breaching the requirements will be subject to a penalty of up to £4,000.

Landlords will always have to carry out improvements where:

  • The property has a current, valid EPC (which will be no more than 10 years old); and
  • The property has an energy efficient rating of the property of F or G on an EPC (i.e. below the minimum energy efficiency standards); and
  • The property is required by law to have an EPC because (a) it is being rented out, or has in the past been rented out; or (b) it has been sold; or (c) it has been improved, and Building Regulations mean that an EPC is required.

The EPC must not be more than 10 years old. Therefore, if an EPC was obtained at some point in the past when it was necessary but is now more than 10 years old, there is no requirement to have another one produced. A further EPC will need to be obtained the next time the property is sold or let. This means that if the Landlord is already renting a property on a lengthy tenancy on 1st April 2020 when the Regulations start to apply to existing tenancies, and the property’s EPC has expired, there is no requirement to obtain a new EPC at this point – the requirement arises at the point he/she re-lets or sells the property.

Self-contained flats and houses require their own individual EPC when they are rented or sold. Whilst units that are not self-contained do not need an individual EPC, it is necessary to consider the status of the whole building. If the bedsit is within a property that has an EPC and that property is rated F or G for energy efficiency, improvements will need to be made before the bedsit can be let, unless an exemption applies and is registered.

Examples

1: A landlord intends to rent out a property from May 2018 to a new tenant. If the property was already required  to have an EPC and in fact, has one which is less than 10 years old, this EPC can be relied on when renting out the property. If however the EPC is more than 10 years old, or if there is no EPC (because there has been no sale or rental previously) the landlord will need to obtain an EPC. If that shows a rating of F or G, the Landlord will need to make improvements to meet the minimum energy efficiency standards unless (a) an exemption applies and (b) the exemption is registered.

2: A landlord is already renting a property under a 10 year tenancy. An EPC was required in 2016 and showed a G rating – below the minimum energy efficient standards. As the Regulations will not apply to existing tenancies until April 2020, the landlord does not need to make improvements yet. To continue to rent the property legally, she will need to improve the property to meet the minimum standards by 1st April 2020 or register an exemption if one applies.

3: A landlord rented his property in 2009 and an EPC certificate was obtained at the time. When the Regulations come into force for existing tenancies on 1st April 2020, the EPC will have expired. The Landlord is not required to obtain another EPC as the tenancy is continuing. He will only need to obtain an EPC if he relets or sells the property after the tenancy expires (whether to the existing tenant or someone else).

Exclusions

Certain exclusions apply, such as buildings that have special architectural historical merit where meeting the energy efficiency requirements would unacceptably alter their character or appearance. Another notable exclusion is residential property which is intended to be used for less than 4 months of the year.

Further exclusions apply in a number of circumstances: for example, where the landlord has undertaken all possible cost-effective improvements but the property remains below the minimum E rating, or where an appropriately qualified independent surveyor provides evidence that the works will devalue the property by more than 5%.

Business tenancies

The rules for business tenancies are different, as are the dates when the Regulations will apply. Minimum energy efficiency requirements will apply from 1st April 2018 where a new tenancy is required, but not until 1st April 2023 for existing tenancies. Note that certain property will be considered a business (i.e. non-domestic) property even though it is rented to private tenants: for example, where a house containing bedsits or a block of flats is rented out as a whole.

What improvements are required?

The type of improvement work which can be required is any energy efficiency improvement work which qualified for Green Deal and the installation of gas for an off-gas property so long as the mains are within 23 meters from the property.

It is up to the Landlord to decide which improvement works from the available options need to be carried out, with the overall objective of meeting the E energy efficiency rating as a minimum.

The Regulations only require that appropriate, permissible and cost-effective improvements are carried out. Where these prove impossible, an exemption may be available.

How can improvement works be funded?

Landlords have the option of taking a loan with one of a number of private providers via the Green Deal Finance Company, which was resurrected in 2017 – more information can be found on the Green Deal Finance website. However, like the old Green Deal scheme, interest rates are still quite high and Landlords may find a better deal with their bank.

Possible future changes

The government has proposed that there should be a cap on the amount that must be spent on upgrades of £2,500, “to protect landlords from excessive costs”. It is currently consulting on this proposal and responses are invited up to March 13 2018.

The above is intended as a general overview of the new Regulations and is not a substitute for legal advice. Further information for residential and business landlords can be found here: Guidance to landlords of privately rented domestic and non-domestic property on complying with the 2018 ‘Minimum Level of Energy Efficiency’ standard (EPC band E).

Buying or selling a property in the West Bridgford area? Visit our Estate Agency page here or call our team on 0115 870 0051. 

Looking to buy or sell a property throughout the UK? We offer competitive conveyancing services – visit our conveyancing page or call us on 08700 120 130 for a quote.

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What happens if a property is occupied by an unmarried cohabiting couple but the legal title is in one name only? This question often arises where both have contributed in the relationship but then split up. Will the person whose name does not appear on the title to the property be entitled to a share of the property’s value? The answer is, yes – sometimes. The law recognises that in some circumstances, if the non-owning person has made a contribution, it would be unjust to ignore that.

A claim by the non-owning party might be made on the basis that a ‘constructive trust’ exists, or on the basis of ‘proprietary estoppel’. These terms are explained below.

Constructive trusts

A trust is an arrangement where the legal owner of property holds it for the benefit of one or more beneficiaries. In the case of cohabiting couples, one party may be registered as the sole legal owner but may hold the property ‘on trust’ for the benefit of themselves and the other party. This would mean that both were entitled to part of the value. This becomes particularly relevant when the couple separates.

For the non-owning person to be entitled to a share, there must be a common intention to share ownership of the property, and the non-owning person must have relied on that intention to their detriment.

Common intention to share ownership

A common intention to share ownership of the property may be either express or implied.

Express intention

The simplest example of common intention is an express agreement between the parties, which might be verbal or in writing. As an example, consider the case of H v M (Property: Beneficial Interest), involving a couple who had cohabited for 11 years and had two children. During their time together, the man had said to the woman:

“Don’t worry about the future because when we are married it will be half yours anyway and I’ll always look after you and the boy”.

The man had also suggested that reason the property was in his name alone was for “tax reasons”. This is a clear example of an express common intention to share ownership. Once the express intention had been established, the woman only had to show that she had acted on the intention to her detriment. In this case, she had signed a mortgage deed as an ‘occupier’ which prioritised any right she had in relation to the property below that of the lender. In doing so, she prejudiced her security, and therefore acted to her detriment. The court awarded her an equal share of the house.

Often, the intention to share ownership can be found in discussions between the parties about why the legal ownership should not be shared. For example, in the case of Eves v Eves, the man had told the woman that the property was only in his name because she was under 21 years of age. In this case, the woman had worked on various structural alterations to the property. The court held that she was entitled to a 25% share. Note that in the more recent case of Curran v Collins, the court said that just because one party had given a ‘specious’  (i.e. misleading) excuse for the property being held in their sole name, did not automatically mean the other person could regard themselves as having an immediate entitlement to a share of the property.

Implied intention

If there was no express discussion between the parties, a common intention to share ownership of the property can be inferred from their conduct. Good examples include the payment of mortgage installments or payment towards improvements to the property. Contributions of labour may also be relevant – for example, in the case of Cooke v Head the woman (non owner) made small contributions towards the mortgage payments and in addition, helped to build a property on land owned by the man. The court awarded her a third share for their joint efforts. However, this may be contrasted with Lloyds Bank plc v Rosset in which the court noted that a mere common intention to renovate a house as a joint venture did not conclusively establish how they intended to  own the property. In the Lloyds case, the wife supervised, helped with work and carried out some decorating: but this was not enough to justify inferring a common intention to share ownership.

Detrimental reliance

In addition to a common intention that the ownership of the property should be shared, there must also be a ‘detrimental reliance’ on that common intention. So, for example, in H v M mentioned above, the woman signed a mortgage deed which put her rights in relation to the property below those of the bank. This potentially detrimental act was done on reliance of the fact that she would have a share in the property.

Size of share

Once it has been established that there was a common intention to share ownership, and a detriment on the part of the non-owning party, it is then necessary to determine the size of the non-owning party’s share. There is no presumption that the share will be equal. The Court will examine the parties’ conduct to determine what was intended as to the share. If this is not possible, the Court will determine the size of the share based on what it considers to be fair, based on the whole course of dealing between the parties in relation to the property.

Proprietary estoppel

An alternative way of claiming that the non-owning party should have an interest in a property is through the doctrine of ‘proprietary estoppel’.

The doctrine of proprietary estoppel is used by the Courts to achieve a fair outcome where:

  1. Person A promises Person B that they will have an interest in the property;
  2. Person B relies on that promise;
  3. To the detriment of Person B.

All three elements must exist for the claim to succeed, and the circumstances must be such that it would be unconscionable not to make an award. However, note that even if the Court agrees that relief is appropriate, Person B will not necessarily get everything that was promised by Person A. The Court will take into account the degree of detriment that Person B has suffered and their award will be proportionate to that. You can find out more about proprietary estoppel claims here.

An example of a proprietary estoppel claim:

Person A promises Person B, “If you quit your job and care for me until my death, this house will be yours”. Relying on that promise, Person B quits their job and cares for Person A until their death. It then transpires that Person A has left their house to someone else in their Will. Person B would have a claim on the basis of ‘proprietary estoppel’.

Note that the doctrine is much wider and more flexible than that of constructive trusts. To claim that a constructive trust exists, the non-owning party needs to show that there was a common intention to co-own the property. By contrast, to establish a proprietary estoppel claim, it is only necessary to show that there was an assurance made which was relied upon, to the non-owning party’s detriment. You can see in the above example that Person B would have no expectation of acquiring any share of the property until Person A’s death.

Cases referred to:

  • H v M (Property: Beneficial Interest) [1992] 1 FLR 229
  • Eves v Eves [1975] 1 WLR 1338
  • Curran v Collins [2015] EWCA Civ 404
  • Cooke v Head [1972] 1 WLR 518
  • Lloyds Bank plc v Rosset [1990] 2 WLR 867, [1990] 1 All ER 1111

Are you concerned about your rights in relation to a property that you don’t own? Have you recently split up with your partner and been left wondering what your legal rights are? Or are you cohabiting and wondering how you can protect your rights going forward? Get in touch with our team for advice – call us on 08700 120 130 or  email info@aprilking.co.uk.

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In a recent decision regarding an inheritance dispute, the High Court has awarded over £1 million to a daughter who spent her life working on the family farm in the expectation of one day inheriting it.

The farm belonged to her parents Jane and Frank, with the dispute arising following Frank’s death in April 2014. Frank and Jane held the farm as ‘beneficial joint tenants’ which meant that on Frank’s death, Jane was the sole owner of the farm.

The farm itself was purchased in 1961 and initially was run as a partnership between Frank and his two brothers; but subsequently it was transferred to Frank and Jane and from then on, it was run as a partnership between the couple.

The property incorporated various assets: the business, the farm house where Jane lived at the time the claim was made and 104 acres of land at Mudford which was bought in 1989. The total value of the business and all the land and buildings including the farm house was around £2.5 million.

The daughter, Lucy, had three older siblings: Emily (known as Emma), Andrew and Sarah.

Lucy claimed that she was entitled either to the whole farm or such lesser share of it as the Court should see fit. She submitted a claim (i) on the basis of ‘proprietary estoppel’ and additionally (ii) a claim under the Inheritance (Provision for Family and Dependants) Act 1975.

Although the two claims were started separately, they proceeded together and were managed together. The case was heard by the Honorable Mr Justice Birss.

What is ‘proprietary estoppel’?

The doctrine of proprietary estoppel is used by the Courts to achieve a fair outcome where:

  1. Person A promises something to Person B;
  2. Person B relies on that promise;
  3. To the detriment of Person B.

All three elements must exist for the claim to succeed, and the circumstances must be such that it would be unconscionable not to make an award. However, note that even if the Court agrees that relief is appropriate, Person B will not necessarily get everything that was promised by Person A. The Court will take into account the degree of detriment that Person B has suffered and their award will be proportionate to that. You can find out more about proprietary estoppel claims here.

An example of a proprietary estoppel claim:

Person A promises Person B, “If you quit your job and care for me until my death, this house will be yours”. Relying on that promise, Person B quits their job and cares for Person A until their death. It then transpires that Person A has left their house to someone else in their Will. Person B would have a claim on the basis of ‘proprietary estoppel’.

What is an Inheritance (Provision for Family and Dependants) Act 1975 claim?

The Inheritance (Provision for Family and Dependants) Act 1975 gives certain people the right to claim against a Deceased Person’s estate if the Deceased did not provide for them. Only certain people may bring a claim – you can find out more about Inheritance Act claims here.

An example of an Inheritance Act claim:

For 5 years prior to his death, a father makes a regular monthly payment of £400 to his only daughter who is widowed and has 4 children to care for. On his death, a Will is discovered which the father made 10 years ago. The Will makes no provision for the daughter and instead leaves the entire estate to charity. The daughter can bring a claim under the Inheritance Act because the Will does not make ‘reasonable financial provision’ for her.

Lucy’s account of events

Returning to the High Court decision, Lucy claimed that she had spent her life working on the farm because of her father’s promise that she would take it over on his retirement. She began work on the farm when she left school and continued to do so whilst raising a family. However, Lucy left the farm in 2013 following a fight with her sister Sarah. The work at the farm was continued by Sarah, her husband William and their 19 year old son James.

Jane’s account of events

Lucy’s mother Jane argued that she had never assured or promised Lucy that Lucy would take over the farm. She also denied that Frank had made such assurance but argued that if he did, Jane was not aware of it and therefore could not be bound by it. Even if the alleged assurances were proved, Jane claimed they were not sufficient for a proprietary estoppel claim. She argued that the amount of work Lucy did on the farm was exaggerated and further, that Lucy had minimalised the work carried out by other employees and her siblings in her account of events.

Jane also pointed out that Lucy had received benefits whilst she was working such as accommodation at the farm, before she moved out to live with her partner; and childcare from Jane when her children were born. Additionally Jane argued that even if the claim was successful out, it is submitted that Lucy should not receive the entire farm – and at best a modest cash payment would be appropriate.

Was a promise or assurance made?

On the point of whether one co-owner of land could bind another with their promises, Birss J cited the 2015 case of Fielden v Christie-Miller in which Sir William Blackburne at para 26 notes one owner must have the authority to bind the other. Any assurance made by Frank to Lucy needed to have the authority of Jane as a coowner of the farm for it to be binding.

Birss J accepted that some of the statements that Lucy relied on were made by Jane but those were not frequent. However, in any event, the evidence showed that Jane knew that statements were being made by Frank throughout, what those statements meant and the fact that Lucy was taking them seriously.

A key piece of evidence was a letter from Andrew Robinson, a Chartered Surveyor who gave  advice to Frank and Jane about passing on the farm in 2008. The letter was written based on instructions provided to Mr Robinson by Frank and Jane. This included the following:

“In the longer term, you made it clear that it was your desire that Lucy should end up being the owner of the overall farming unit including the farm and live and dead farming stock. This would only happen on the latter of your two deaths although agricultural property relief should ensure that no inheritance tax will be payable. In doing this you do wish to look after Andrew, Sarah and Emma. As far as Andrew is concerned we considered the possibility of erecting a barn on part of the off lying land, in due course obtaining planning permission for an agricultural occupancy dwelling and then passing the barn and agricultural occupancy building plot perhaps to your son Andrew during your lifetime. On the later of your two deaths, I think we then also felt that you would wish to ensure that Sarah and Emma received a bequest and we felt that this could be done by leaving them a given amount of money within your will with these sums then being raised against the value of the farm; Lucy therefore effectively having to take out a loan.”

This section of the letter firmly supports key aspects of Lucy’s case. It showed that Frank and Jane were expressly contemplating that the farm was to pass to Lucy. The Judge therefore concluded that to the extent that any assurances were made when Jane was not present, they were made with her authority.

The representations that were made to Lucy used different words each time, and were not always explicit; but the Judge found that they fitted together and amounted to a coherent promise to Lucy that she would inherit a viable dairy farm.

However, the Judge noted that Lucy did not and could not have expected that no provision of any kind would be made for her siblings, including in particular some land for Andrew.

To what extent did others work on the farm?

Birss J noted the work carried out by others on the farm. As noted above, Lucy, had three older siblings: Emily (known as Emma), Andrew and Sarah.

The farm was managed by Frank with Jane helping out with calves, cows, sheep, pigs and chickens together with household chores for the benefit of the family. Lucy’s sister Emma worked on the farm whilst she was at school and helped out from time to time. Lucy’s brother Andrew worked on the farm and was paid a wage, although it was not his sole occupation. His interest was machinery and Birss J accepted that he had contributed to the farm substantially in that way.

Sarah also worked on the farm and although she attended college, she continued to help out. From 1988 the amount of work she did increased although she also did other jobs. She was paid a wage for her work.

The farm also had employees which were mentioned, some of whom helped Lucy with her duties.

Did Lucy rely on the assurance to her detriment?

It was noted that Lucy was paid a wage for her work and additionally received free board and lodging for some of the time. Further, Lucy had use of use Jane’s car, had free keep of eight beef cattle a year and had some other benefits.

However, expert evidence suggested that Lucy was paid less than the sum which an agricultural worker doing her work (including accounting for the value of the board and lodging) would ordinarily be paid. Further, Lucy also claimed she worked long hours and only had 5 weeks holiday in more than thirty years. The judge accepted this, so far as ‘holiday’ meant extended vacation, as oppose to days off here and there (which were also taken).

The judge therefore found Lucy’s work on the farm could properly be characterised as a relevant ‘detriment’ for the purpose of a proprietary estoppel claim. The acts of detriment include the long hours, low pay and few holidays Lucy took. The judge noted that the fact family members do often work very long hours on a family dairy farm and take very few holidays does not mean this sort of work is not a detriment to the person doing the work. A person employed in an arm’s length transaction would simply not have put in the hours Lucy worked nor accepted the pay she was paid nor accepted the number of holidays she took.

Further he noted that Lucy had committed herself not just to dairy farming as a career but to dairy farming at the family farm. It never occurred Lucy to leave and go elsewhere, largely because of the assurances that had been made. She relied on those assurances and that is what kept her at the family farm. The judge therefore found that, in addition to the terms on which Lucy was employed (hours, pay and holidays) the detrimental reliance also included the commitment to farming at the family farm rather than going elsewhere.

The benefits she received – which included childcare from Jane, the use of Jane’s car, beef cattle upkeep and various other benefits – were difficult to quantify and it was not possible to say whether these would cancel out the difference between what Lucy was paid and what the typical remuneration for someone doing that work would have been. The Judge concluded that to put numbers on all these things and attempt to add them up would “fall into the familiar trap of spurious precision”.

The Judge concluded that Lucy’s case of proprietary estoppel was established and that Lucy was therefore entitled to something in the interests of equity/justice.

How much should Lucy receive?

On the question of how much Lucy should receive, the judge found that Lucy was being asked to work on the dairy farm until Frank was no longer capable and Lucy has kept her side of the bargain. Therefore, the Judge reasoned that unless there were strong reasons why not, Lucy ought to receive compensation based on what she was promised, subject to any relevant deductions. What she was promised was a viable dairy farm. However, as noted the estate comprised of more than this: it also included land at Mudford which was not essential to that diary operation. He therefore concluded the most Lucy should receive was Woodrow itself with the farmhouse but without Mudford, or the equivalent in money terms.

Having then taken into account all the factors, the judge concluded Lucy should receive a cash payment of the value of the Woodrow farmland and farm buildings (excluding Mudford and the farmhouse). Based on the February 2017 valuation this equated to a cash payment of £1,170,000 (subject to any difference in the actual value of the property when the judgement was made). The reason that the farm itself was not to be transferred is that the judge felt it would not be fair to require the farmhouse to be split from the rest of the holding; nor to force Jane to leave her home. Although the judge recognised that it might not be possible to raise the money due without selling all the property, by making the award he allowed for the possibility.

Inheritance Act claim

The Judge found it unnecessary to consider the Inheritance Act claim, given that the claim of proprietary estoppel was proven.

Resources and citations

Habberfield v Habberfield [2018] EWHC 317 (Ch) (23 February 2018)

Fielden v Christie-Miller [2015] EWHC 87 (Ch)

Do you need advice?

Are you involved in an inheritance dispute? Have you been promised something by a loved one which was not then given to you after the person’s death? Perhaps a family member has passed away and did not provide for you in their Will as expected. Our contested Wills specialists can assist: get in touch for a free chat without obligation.

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