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SQE1 - Trick Questions > Important > Flashcards

Important Flashcards

1
Q

How old should a person be to make a will

A

18
Unless privileged

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2
Q

Wills
How many PRs (executors/administrators) are appointed to administer the estate

A

Max 4

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3
Q

Types of gifts under a will
1. Specific
2. General
3. Demonstrative
4. Residuary

A
  1. Particular item
  2. Not distinguished eg shares in a company
  3. General but paid from a specific fund eg 100$ from X to X account
  4. Anything not disposed of
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4
Q

Ademption
What is it? To who does it apply?

A

Gift will fail if it is no longer in the estate
Only applies to specific gifts

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5
Q

Abatement
What is it? What does it NOT apply to?

A

Order in which assets are applied by executors towards payment of estate expenses:
- specific
- general
- residuary

DOES NOT apply to demonstrative

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6
Q

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?

A
  1. Older person
  2. Passes to B and becomes part of B’s estate
  3. Gift lapses
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7
Q

Do you need probate for DMC

A

No
Gift takes effect on delivery

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8
Q

Grant of probate when deceased left a will

A

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

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9
Q

Order of grant when deceased died intestate

A

Spouse
Children
Grandchildren
Parents
Siblings
Nieces/ nephews
Half- siblings/ their children

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10
Q

When is IHT paid

Who pays it

A

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)

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11
Q

IHT tax rate
Nil rate tax band
Tax free threshold for direct descendants on residential property

A

40%
325K
500K (estate must be under 2M)

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12
Q

IHT
Can unused nil rate band be transferred to surviving spouse/ partner

A

Yes

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13
Q

IHT valuation of the property

  1. If held by spouse/ partner as JT
  2. If held by anyone else as JT
A
  1. Divide value by 2
  2. Divide by no of people, then deduct further 10% to value of deceased’s share
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14
Q

During period of administration of an estate what taxes are paid and who pays them

A

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

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15
Q

What are the 3 main specified investments under FSMA?

A
  1. Securities
    - company shares
    - debentures
    - gilts
    - unit trusts
    - open ended investment companies
  2. 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)
  3. Regulated mortgage contracts
    - endowment mortgage, interest only mortgage, pension mortgage etc
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16
Q

What are 5 unregulated/ unspecified investments under FSMA?

A
  • 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
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17
Q

Judicial review - what does it mean?

  1. issue of illegality
  2. procedural impropriety
  3. irrationality
A
  1. when you fetter in the exercise of discretion
  2. failed to give adequate reasons/ act in a biased manner
  3. failed to act reasonable
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18
Q

Types of orders for the youths

A

Referral order
Absolute discharge
Conditional discharge
Reparation order
Youth rehabilitation order
DTO

19
Q

Referral Order

A

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

20
Q

Absolute discharge

A

No punishment required

21
Q

Conditional discharge

A

Must not commit offence for the operational period

Max 3 years

If reoffends - then can be punished for the original offence + latest offence

22
Q

Reparation Order

A

Only for an imprisonable sentence!

Unpaid work (to show offender the consequences of their actions)

23
Q

Youth Rehabilitation Order

A

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.

24
Q

DTO

A

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).

25
Q

What is a Benjamin Order

A

Protects the trustees (i.e., fully relieves them of personal liability) from a beneficiary that is known but not traceable/ unknown beneficiary

26
Q

S27 Notice Trustees Act

A

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.

27
Q

What do companies pay corporate tax on?

A

Trading PROFITS (not income)
And capital gains

28
Q

A&B have a contract and A sells a car to B. B sells the car to C.

  1. If there is misrepresentation between A&B, can the car be recovered from C?
  2. If the contract between A&B has an issue of mistake due to identity, then can they recover car from C?
A
  1. No. As property would have passed to third party (C).
  2. Yes, as the contract between A&B would be void due to mistake of identity.
29
Q

What is retained EU law

A

EU legislation that continued to be applied on the day that the UK ceased to be member of EU (31 Jan 2020)

30
Q

Sexual harassment by a partner in your firm. Who do you report it to?

A

SRA + firms COLP

31
Q

CF by post - when is deemed service?

A

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

32
Q

When do you need PII

A

Only if engaging in reserved legal activity

33
Q

Where do HC judges have jurisdiction

A

HC
Crown Court
Family Court

34
Q

Implied repeal

A

If two acts are conflicting, later act is the law followed by

35
Q

Sewel convention

A

Uk parliament will not legislate on devolved matter without the consent of Scottish parliament or welsh assembly

36
Q

Qualified privilege

A

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

37
Q

Corporation tax - Capital loss

  1. Set off against what in the current year?
  2. Can they be carried back?
  3. 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?

A

Gains can only be offset against other gains, not trading losses!

  1. Same year: offset against any chargeable gains (ie gain made from selling an asset)
  2. Previous year(s): No
  3. 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.

38
Q

What is the stamp duty % ?

A

0.5% on consideration over GBP 1,000 (make sure you round up the numbers to the next GBP 5)

39
Q

Liquidation (winding up)
What are the 3 types

A

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

40
Q

Bankruptcy

A

5K
Inability to pay statutory demand for 3 weeks

41
Q

Alternatives to liquidation?

A

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

42
Q

2 types of product liability and what do you need?

A

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

43
Q

CPA claim time limit

A

3 yrs from injury/ damage

10 yrs from product circulation

44
Q

Vat
1. Rate
2. Exempt
3. 0 rated
4. Reduced rate
5. Payment date

A
  1. 20%; 85k
  2. Education, health, residential land, insurance
  3. Non catering food, books, water
  4. 5%; fuel
  5. 1m from the end of each quarter

SQE1 - Trick Questions (17 decks)

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