Important Flashcards
How old should a person be to make a will
18
Unless privileged
Wills
How many PRs (executors/administrators) are appointed to administer the estate
Max 4
Types of gifts under a will
1. Specific
2. General
3. Demonstrative
4. Residuary
- Particular item
- Not distinguished eg shares in a company
- General but paid from a specific fund eg 100$ from X to X account
- Anything not disposed of
Ademption
What is it? To who does it apply?
Gift will fail if it is no longer in the estate
Only applies to specific gifts
Abatement
What is it? What does it NOT apply to?
Order in which assets are applied by executors towards payment of estate expenses:
- specific
- general
- residuary
DOES NOT apply to demonstrative
Wills
When T and B die together
1. Who is assumed to die first?
2. If T is older, where does it gift go?
3. If B is older, where goes the gift go?
- Older person
- Passes to B and becomes part of B’s estate
- Gift lapses
Do you need probate for DMC
No
Gift takes effect on delivery
Grant of probate when deceased left a will
Executor
Trustee
Beneficiary (all are entitled equally but max 4 can act)
PR of beneficiary
Creditor
PR of creditor
If executor is appointed- they will do it, else an executor w reserved power
A renounced executor cannot do it
If appointed executor dies+ they have appointed an executor (ie does not die intestate) then their executor will become the new executor of this estate due to the Chain of Representation
Grant of probate registry = Grant de Bonis Non
Order of grant when deceased died intestate
Spouse
Children
Grandchildren
Parents
Siblings
Nieces/ nephews
Half- siblings/ their children
When is IHT paid
Who pays it
Before grant of probate & 6 months after the end of the month of death
PR (on property) but ultimate burden borne by B (as IHT will be paid from the estate)
IHT tax rate
Nil rate tax band
Tax free threshold for direct descendants on residential property
40%
325K
500K (estate must be under 2M)
IHT
Can unused nil rate band be transferred to surviving spouse/ partner
Yes
IHT valuation of the property
- If held by spouse/ partner as JT
- If held by anyone else as JT
- Divide value by 2
- Divide by no of people, then deduct further 10% to value of deceased’s share
During period of administration of an estate what taxes are paid and who pays them
Income tax - PR
Capital gains - PR (annual exempt amount 6K)
IHT - PR
Remb, when you value gain on shares/ property - last sale price minus date of death price
What are the 3 main specified investments under FSMA?
- Securities
- company shares
- debentures
- gilts
- unit trusts
- open ended investment companies - Insurance distribution activities
- life insurance, investment bonds, pension scheme (ie contracts of insurance)
- insurance policies, mortgage, accident, building, legal, land, beneficiary etc (ie general/ protection only insurance contracts) - Regulated mortgage contracts
- endowment mortgage, interest only mortgage, pension mortgage etc
What are 5 unregulated/ unspecified investments under FSMA?
- land
- deposits in bank/ building scheme
- national saving and investments (national savings income, capital bonds, national savings premium bonds and bank accounts)
- occupational pension scheme
- chattel, fine art, gold, wines, stamps, vintage cars
Judicial review - what does it mean?
- issue of illegality
- procedural impropriety
- irrationality
- when you fetter in the exercise of discretion
- failed to give adequate reasons/ act in a biased manner
- failed to act reasonable
Types of orders for the youths
Referral order
Absolute discharge
Conditional discharge
Reparation order
Youth rehabilitation order
DTO
Referral Order
Designed to prevent reoffending and for them to take responsibility of their actions. For first time offenders.
Young person is referred to a Young Offenders Pannel.
3 - 12m.
Mandatory = for first time offender who pleads guilty (not for custodial sentence)
Disc = offender pleads guilty to at least 1 offence
Absolute discharge
No punishment required
Conditional discharge
Must not commit offence for the operational period
Max 3 years
If reoffends - then can be punished for the original offence + latest offence
Reparation Order
Only for an imprisonable sentence!
Unpaid work (to show offender the consequences of their actions)
Youth Rehabilitation Order
For any offence! To prevent re-offending. For first time offenders.
Looks at the seriousness test to give a community order.
Max 3 years + 6 months.
N/a if offender can get a compulsory referral order/ or if there is an existing reparation order/ YRO.
DTO
Must pass the threshold test.
It is a custodial sentence.
N/a for offenders under 12. Not suitable for minor, first time offenders.
Max 24 months (2 years).
What is a Benjamin Order
Protects the trustees (i.e., fully relieves them of personal liability) from a beneficiary that is known but not traceable/ unknown beneficiary
S27 Notice Trustees Act
It protects the Trustees from any unknown creditors or unknown beneficiaries. The notice must be placed in the London Gazette + local newspaper to the deceased. The notice should request the creditor to come forward within 2 months. If no response, the PR can distribute the estate and will not be liable. PR must give notice as soon as possible, administrators must wait until the grant of probate has been issued.
What do companies pay corporate tax on?
Trading PROFITS (not income)
And capital gains
A&B have a contract and A sells a car to B. B sells the car to C.
- If there is misrepresentation between A&B, can the car be recovered from C?
- If the contract between A&B has an issue of mistake due to identity, then can they recover car from C?
- No. As property would have passed to third party (C).
- Yes, as the contract between A&B would be void due to mistake of identity.
What is retained EU law
EU legislation that continued to be applied on the day that the UK ceased to be member of EU (31 Jan 2020)
Sexual harassment by a partner in your firm. Who do you report it to?
SRA + firms COLP
CF by post - when is deemed service?
2 business days from when the step is taken
Remb, should be posted before 4:30pm for that day to be counted as Day 1
Then, then next working day, is Day 2
When do you need PII
Only if engaging in reserved legal activity
Where do HC judges have jurisdiction
HC
Crown Court
Family Court
Implied repeal
If two acts are conflicting, later act is the law followed by
Sewel convention
Uk parliament will not legislate on devolved matter without the consent of Scottish parliament or welsh assembly
Qualified privilege
Re defamation
If mp is sued, they can claim qualified privilege and say what they said was in the public interest
Bop on C to prove that is was untrue/ reckless
Corporation tax - Capital loss
- Set off against what in the current year?
- Can they be carried back?
- Can they be carried forward?
Eg: 7m chargeable gain this year, and 7m capital loss last year.
- how much can you offset?
- how much will be taxed?
- can you carry forward anything?
Gains can only be offset against other gains, not trading losses!
- Same year: offset against any chargeable gains (ie gain made from selling an asset)
- Previous year(s): No
- Future year(s): indefinitely at 5 mil + 50% of the chargeable gain
Eg: to offset = 5m + 50% of the remaining 2m gain.
- 6m is the max chargeable gain to be offset by carry forward losses
- you will pay corporation tax on 1m (7m - 6m)
- there is still a balance of 1m loss left, which you can keep carrying forward.
What is the stamp duty % ?
0.5% on consideration over GBP 1,000 (make sure you round up the numbers to the next GBP 5)
Liquidation (winding up)
What are the 3 types
Compulsory liquidation- by creditor; inability to pay statutory demand for 21 days
CVL- by insolvent company: needs special resolution
MVL- by solvent company; needs special resolution
Bankruptcy
5K
Inability to pay statutory demand for 3 weeks
Alternatives to liquidation?
Administration- creates moratorium; acts in the interests of creditors
- by court order
- by company/ directors
- by qualifying floating charge holder
CVA- part payment
Must be approved by 75% in value of creditors + 50% unconnected creditors
Binding on all unsecured creditors
2 types of product liability and what do you need?
Common law: doc + reasonably foreseeable
Defence: consent, contributory neg, exclusion of liability
CPA: defective product + strict liability (C must prove causation ie but for)
Defence: legal requirements, didn’t supply, not in course of bst, misuse, 3P parts, scientific knowledge
CPA claim time limit
3 yrs from injury/ damage
10 yrs from product circulation
Vat
1. Rate
2. Exempt
3. 0 rated
4. Reduced rate
5. Payment date
- 20%; 85k
- Education, health, residential land, insurance
- Non catering food, books, water
- 5%; fuel
- 1m from the end of each quarter
