Laws and Legal Concepts

Question 1

What legislation introduced Limited Liability Partnerships

Answer 1

Limited Liability Partnerships Act 2000

Question 2

What are the major tax differences between limited companies and unincorporated businesses?

Answer 2

Unincorporated pay income tax, capital gains tax, and NICs. Limited companies pay corporation tax.

Question 3

When was the Powers of Attorney Act introduced?

Answer 3

1972

Question 4

When was the Enduring Powers of Attorney Act introduced?

Answer 4

1985

Question 5

When was the Mental Capacity Act introduced? When did it come into force?

Answer 5

2005, coming into force 1 October 2007

Question 6

A person cannot make a decision for themselves if: (4 items)

Answer 6

1. Understand relevant information
2. Retain information
3. Evaluate information to make a decision
4. Communicate information

Question 7

Two types of LPA

Answer 7

1. Health and Care Decisions LPA

2. Financial Decisions LPA

Question 8

When can a Lasting Power of Attorney be revoked? (4)

Answer 8

1. Donor’s bankruptcy
2. Attorney’s death or bankruptcy
3. Dissolution of marriage (or CP) between donor/attorney
4. Attorney’s incapacity

Question 9

Additional requirements for a valid contract in case of life assurance contracts.

Answer 9

1. Good faith

2. Insurable interest

Question 10

3 types of property ownership

Answer 10

1. Freehold
2. Leasehold
3. Commonhold

Question 11

What’s the minimum term remaining on a leasehold mortgage lenders require to consider a mortgage?

Answer 11

25 years after the term of the mortgage

Question 12

2 options for leaseholders to avoid difficulties with lease running out

Answer 12

1. Buy the freehold

2. Extend the lease

Question 13

Requirements for leaseholders to have right to extend lease or buy freehold

Answer 13

1. Lived in property for at least 2 years

2. Lease is/was for at least 21 years

Question 14

Two types of joint ownership of property

Answer 14

1. Joint tenancy

2. Tenancy in common

Question 15

3 schemes to help people buy a home

Answer 15

1. Shared ownership
2. Help to Buy equity loans
3. Mortgage Guarantee Scheme

Question 16

Minimum debt required for bankruptcy to be considered

Answer 16

£5,000

Question 17

What are the three categories a contract with a minor might fall under?

Answer 17

1. Binding
2. Binding unless repudiated
3. Not binding

Question 18

What legislation allows a fourteen day cooling off period after taking out a life assurance policy?

Answer 18

Financial Services and Markets Act 2000

Question 19

Explain the law of agency between IFA, a client, and an insurer

Answer 19

1. IFA is agent of the client and owes a duty of care
2. IFA owes no duty to insurer but must comply with FCA rules
3. Client is responsible for acts of IFA

Question 20

Can joint tenants sell without the other’s permission?

Answer 20

No

Question 21

Do joint tenants need to go to probate to be granted other tenants’ share of property upon death?

Answer 21

No

Question 22

What percentage of creditors need to vote for an IVA for it to go ahead?

Answer 22

75%

Question 23

What is the impact on the debtor when they are granted an IVA? (4 items)

Answer 23

1. Need insolvency practitioner’s consent to apply for credit
2. Added to individual insolvency register
3. IVA on credit report for 6 years
4. May be asked to remortgage home to pay off creditors

Question 24

How can debtor’s inability to pay be proven to start bankruptcy proceedings?

Answer 24

1. Statutory Demand not complied with for 21 days
2. Court Order no enforced
3. Break the terms of an IVA

Question 25

2 alternatives to liquidation for corporate insolvency.

Answer 25

1. Administration | 2. Voluntary arrangements

Question 26

Who inherits under intestacy if the intestate dies leaving a spouse but no issue

Answer 26

Surviving spouse is sole beneficiary

Question 27

Who inherits under intestacy if the intestate dies leaving spouse and issue

Answer 27

1. Spouse takes personal chattels, plus 2. Statutory legacy of £270,000, plus 3. Half of remaining balance 4. Issue takes other half at 18 or marriage (if earlier)

Question 28

Who inherits under intestacy if the intestate dies leaving no spouse

Answer 28

Everything is taken by issue, then successively: parents, siblings, grandparents, uncles and aunts

Question 29

Who inherits under intestacy if the intestate dies leaving no relatives

Answer 29

The crown, Duchy of Lancaster, or Duchy of Cornwall

Question 30

What is the name of the people who are responsible for dealing with a deceased's estate?

Answer 30

Legal Personal Representatives: 1. Executors if there's will 2. Administrators if there isn't

Question 31

What should LPRs do before distributing assets?

Answer 31

Pay all debts and taxes due from the estate

Question 32

When may probate not be necessary?

Answer 32

Where deceased only had: 1. savings or premium bonds 2. jointly owned assets which automatically passed to surviving owners

Question 33

What are the two types of Grant of Representation issued by Probate Registry?

Answer 33

1. Grant of probate | 2. Letters of administration

Question 34

What are the six ways a trust can come into existence?

Answer 34

1. Express 2. Implied 3. Presumptive 4. Successive 5. Constructive 6. Resulting

Question 35

12 types of trust

Answer 35

1. Bare. 2. Interest in possession. 3. Discretionary. 4. Accumulation 5. Mixed. 6. Settlor-interested. 7. Non-resident. 8. Life interest. 9. Power of appointment 10. Will 11. Statutory. 12. Pension Scheme

Question 36

What are the three certainties needed to create a trust? What case are they derived from?

Answer 36

1. Certainty of wording shows an intention to create a trust 2. Subject matter 3. Objects of the trust

Question 37

5 circumstances where trusteeship is ended?

Answer 37

1. If trustee dies or resigns 2. Removed under provisions of deed 3. Removed by other trustees (if allowed) 4. Removed in accordance with Trustees Act 1925 5. Removed by a relevant court

Question 38

4 types of beneficial interest

Answer 38

1. Life interest 2. Absolute interest 3. Reversionary interest 4. Contingent interest

Question 39

4 conditions under which a beneficiary can close trust and demand distribution of property

Answer 39

1. All beneficiaries agree 2. No possibility of future beneficiaries 3. Beneficiaries are 18+ with capacity 4. Beneficiaries entitled to full beneficial interest of trust property