Laws and Legal Concepts Flashcards
What legislation introduced Limited Liability Partnerships
Limited Liability Partnerships Act 2000
What are the major tax differences between limited companies and unincorporated businesses?
Unincorporated pay income tax, capital gains tax, and NICs. Limited companies pay corporation tax.
When was the Powers of Attorney Act introduced?
1972
When was the Enduring Powers of Attorney Act introduced?
1985
When was the Mental Capacity Act introduced? When did it come into force?
2005, coming into force 1 October 2007
A person cannot make a decision for themselves if: (4 items)
- Understand relevant information
- Retain information
- Evaluate information to make a decision
- Communicate information
Two types of LPA
- Health and Care Decisions LPA
2. Financial Decisions LPA
When can a Lasting Power of Attorney be revoked? (4)
- Donor’s bankruptcy
- Attorney’s death or bankruptcy
- Dissolution of marriage (or CP) between donor/attorney
- Attorney’s incapacity
Additional requirements for a valid contract in case of life assurance contracts.
- Good faith
2. Insurable interest
3 types of property ownership
- Freehold
- Leasehold
- Commonhold
What’s the minimum term remaining on a leasehold mortgage lenders require to consider a mortgage?
25 years after the term of the mortgage
2 options for leaseholders to avoid difficulties with lease running out
- Buy the freehold
2. Extend the lease
Requirements for leaseholders to have right to extend lease or buy freehold
- Lived in property for at least 2 years
2. Lease is/was for at least 21 years
Two types of joint ownership of property
- Joint tenancy
2. Tenancy in common
3 schemes to help people buy a home
- Shared ownership
- Help to Buy equity loans
- Mortgage Guarantee Scheme
Minimum debt required for bankruptcy to be considered
£5,000
What are the three categories a contract with a minor might fall under?
- Binding
- Binding unless repudiated
- Not binding
What legislation allows a fourteen day cooling off period after taking out a life assurance policy?
Financial Services and Markets Act 2000
Explain the law of agency between IFA, a client, and an insurer
- IFA is agent of the client and owes a duty of care
- IFA owes no duty to insurer but must comply with FCA rules
- Client is responsible for acts of IFA
Can joint tenants sell without the other’s permission?
No
Do joint tenants need to go to probate to be granted other tenants’ share of property upon death?
No
What percentage of creditors need to vote for an IVA for it to go ahead?
75%
What is the impact on the debtor when they are granted an IVA? (4 items)
- Need insolvency practitioner’s consent to apply for credit
- Added to individual insolvency register
- IVA on credit report for 6 years
- May be asked to remortgage home to pay off creditors
How can debtor’s inability to pay be proven to start bankruptcy proceedings?
- Statutory Demand not complied with for 21 days
- Court Order no enforced
- Break the terms of an IVA
2 alternatives to liquidation for corporate insolvency.
- Administration
2. Voluntary arrangements
Who inherits under intestacy if the intestate dies leaving a spouse but no issue
Surviving spouse is sole beneficiary
Who inherits under intestacy if the intestate dies leaving spouse and issue
- Spouse takes personal chattels, plus
- Statutory legacy of £270,000, plus
- Half of remaining balance
- Issue takes other half at 18 or marriage (if earlier)
Who inherits under intestacy if the intestate dies leaving no spouse
Everything is taken by issue, then successively: parents, siblings, grandparents, uncles and aunts
Who inherits under intestacy if the intestate dies leaving no relatives
The crown, Duchy of Lancaster, or Duchy of Cornwall
What is the name of the people who are responsible for dealing with a deceased’s estate?
Legal Personal Representatives:
- Executors if there’s will
- Administrators if there isn’t
What should LPRs do before distributing assets?
Pay all debts and taxes due from the estate
When may probate not be necessary?
Where deceased only had:
- savings or premium bonds
- jointly owned assets which automatically passed to surviving owners
What are the two types of Grant of Representation issued by Probate Registry?
- Grant of probate
2. Letters of administration
What are the six ways a trust can come into existence?
- Express
- Implied
- Presumptive
- Successive
- Constructive
- Resulting
12 types of trust
- Bare. 2. Interest in possession.
- Discretionary. 4. Accumulation
- Mixed. 6. Settlor-interested.
- Non-resident. 8. Life interest.
- Power of appointment 10. Will
- Statutory. 12. Pension Scheme
What are the three certainties needed to create a trust? What case are they derived from?
- Certainty of wording shows an intention to create a trust
- Subject matter
- Objects of the trust
5 circumstances where trusteeship is ended?
- If trustee dies or resigns
- Removed under provisions of deed
- Removed by other trustees (if allowed)
- Removed in accordance with Trustees Act 1925
- Removed by a relevant court
4 types of beneficial interest
- Life interest
- Absolute interest
- Reversionary interest
- Contingent interest
4 conditions under which a beneficiary can close trust and demand distribution of property
- All beneficiaries agree
- No possibility of future beneficiaries
- Beneficiaries are 18+ with capacity
- Beneficiaries entitled to full beneficial interest of trust property
