Events & News

Key Changes that could affect you or a family member

The Good – New Property Nil Rate Band



We all know that every individual on death can pass an amount of £325,000 tax free to their beneficiaries. This is referred to as the Nil Rate Band. Anything in excess of the Nil Rate Band will be charged at 40% based on the current Inheritance Tax (IHT) rule.

When someone dies, quite often it is necessary for their executors or administrators to apply to the Probate Registry for a Grant of Probate to that person’s will (or Grant of Letters of Administration if there isn’t a will). The issuing of the Grant gives the executor or administrator the authority to then deal with the deceased person’s assets and administer their estate either as per their will or under the intestacy rules if there is no will.

That can be quite daunting in itself.  There is a lot of information that needs to be gathered about the deceased person especially their finances, debts, lifetime gifts and assets owned with someone else.  This information has to be supplied to H M Revenue & Customs either before (primarily if there is Inheritance Tax to pay) or if not then, definitely when the application for a Grant is submitted to the Probate Registry. At that time the executors or administrator also send an Oath they have sworn confirming who they are and how they are entitled to apply for the Grant, details of the deceased and confirmation they will administer the estate correctly.

The Probate Registry’s role is then to check the Oath and any will to ensure that everything has been completed correctly, the will is valid and that any Inheritance Tax that is due has been paid or that there is none to pay.  They do not check any of the figures or raise queries on any aspect of the estate’s financial information that has been supplied.  That is the role of HM Revenue & Customs.

With the growth of AirBnB and similar services there has been a large increase in the number of home owners letting out their properties to raise money from holiday lettings.  Flat owners, however, face a number of hurdles before they can exploit their properties in this way.  A leaseholder’s occupation of the flat is governed by terms of the lease and sometimes those terms do not permit this activity, as one leaseholder found to her cost early in September 2016.


Some leases contain prohibitions against letting out on short term lets and holiday lets.  Most contain a requirement that the flat can only be used as ‘a private residence’.  The courts have heard cases about the interpretation of this phrase since at least as far back as 1925.   In the latest one, Nemcova v Fairfield Rents Ltd, the Upper Lands Tribunal did not agree with the tenant that a restriction in her lease, only permitting her to use the flat as ‘a private residence’, allowed her to let it out to businessmen who stayed a few days there on business or holiday makers who signed up on her website to use the flat for a week.  


These persons were not using the flat as their ‘private residence’.  In fact they had left their residences temporarily and were staying in her flat for a different purpose.  While she would be able to let the flat on an Assured Shorthold Tenancy to someone who wanted to live there (as the lease did not prevent it – some leases do however), the nature of the short term lets was not residential.   They already had their own residences and were not intending to vacate them.

A very public row has engulfed the family company Sherlock Holmes International Society Ltd, which owns the Sherlock Homes museum, over disputed withdrawals of funds of more than £2m  from the company’s coffers by a member of the family.  A winding up petition was filed in the High Court in 2014 by the sole Director but then other members of the family opposed this, on the ground that the Director had not been validly appointed and therefore had no power to file the petition.


The company’s Articles only permitted shareholders to be Directors and the sole Director was not a shareholder at the time the petition was issued.    However it seems that on previous occasions, other non-shareholder Directors had sometimes been appointed at the company’s AGM.  The High Court had to decide whether the shareholders had by implication/conduct changed the Articles to permit a non-shareholder to be a Director, even though no steps had been taken to formally change them by company resolution and filing the change at Companies House.

After the over indulgences that Christmas often brings it’s sometimes hard to motivate yourself to get back into the swing of things in January, particularly if you are contemplating a major change like moving house and simply can’t bear the thought of all that upheaval!

Is there ever a good time of year to move?  Well, that depends upon your personal circumstances.  Personally, I would prefer to move in the cooler months and get my new house all organised and ready for the summer months – that way you can get out and enjoy the good weather without feeling as though you should be indoors redecorating or unpacking boxes!

Unless you’re a seasoned house seller and purchaser it’s often difficult to know how to actually get that ball rolling and the whole task can seem very daunting.  Fear not!  My advice?  START WITH THE FINANCES.  The only way you may know if you can afford to move is if you make some enquiries.  Speak to your bank or mortgage broker to see what you can afford and an estate agent to see what your house is currently worth.  Have a look online at properties for sale to see what is on offer.  PHONE US!  We are very friendly and are happy to run through the legal fees and other costs associated with your house sale and purchase.  There is no obligation to do anything other than this.  If, after you’ve got all this information, you decide that 2017 isn’t your year to move then you’ve lost nothing other than a bit of your time in finding that out.

The number of Wills which are being contested is ever increasing. There are a number of ways that a person may contest a Will. One of the most common grounds to contest a Will is to establish that the testator (person making a Will) lacks sufficient mental capacity to make a Will. The test for mental capacity was established early on in the well-known case of Banks v Goodfellow (1870) which set the bar for what is known as testamentary capacity. This is the mental capacity required by a person to make a Will. One of the other grounds for contesting a Will is ‘want of knowledge and approval’; this is where a testator lacks knowledge or understanding of their Will and does not approve of the contents of the Will.


In the recent case of Burns v Burns [2016] the Court of Appeal upheld the Will of an elderly woman as valid, despite evidence of her decline in mental capacity when the Will was finalised. In the case the testator, Mrs Eva Burns, made a Will in 2003 which gave her half share in the family home to her son Antony. Her other son, Colin, already owned the remaining half share of the property. The remainder of her estate was to be divided equally between Antony and Colin.

Until now, companies have been required to file an Annual Return every year which updates the Register of Companies with current information about Directors, shareholdings, registered office, etc.   From 30 June, companies will no longer be required file an Annual Return but merely a ‘Confirmation Statement’   This confirms that the current details on the Register are correct or provides details of any changes which have occurred during the past year.


The statement must be filed within 14 days of the anniversary of the date when the company was incorporated. 


The new form is called CS01 and is downloadable from Companies House or you can file online.  You need to pay a fee of £40 each time you file this form.


The intention of the form is to reduce administration for companies.   

Mark Barrett is Head of the Commercial Dept and deals with company law matters at LLB

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