Wills

Question 1

Conditions for a testator to be able to make a will

Answer 1

Age: Over 18, unless a privileged will for soldiers and marines (in service), may also be written or oral

Mentally capable: The test follow from common law Banks v Goodfellow: The testator must have understood
(i) the nature of his act and its broad effects, (ii) the extent of his property, and
(iii) the moral claims to which he ought to give effect.

Parker v Felgate/Perrins v Holland: the testator will be presumed to have mental capacity if
(i) the testator had such capacity at the time of giving instructions to the solicitor for preparing the will,
(ii) the will was prepared according to the instructions, and (iii) the testator understood that he was executing the will for which he gave instructions, although he did not have full capacity at the time of the execution.

An individual can have testamentary capacity despite suffering from mild to moderate dementia. In Hardwood v Barker, the testamentation of the whole estate to a man’s wife was found invalid, as he was not sufficiently aware of the existence of his own family.

Capacity will NOT be presumed if the testator had long-time serious mental illness.

Capacity is not tried unless challenged and presumed to be in place if the will is duly executed. Burden of proof is on the challenger.

The ‘Golden rule’: not legally binding, but advised to obtain a medical report from a medical practitioner if in doubt.
Testator knows and approves content of the will at the time of execution (or when the solicitor was instructed c.f. Exception above)

Closely connected with mental capacity. If the testator possesses mental capacity he is presumed to have knowledge and approval as well.

Lack of knowledge must relate to the preparation and execution of the will e.g. the testator was under undue influence, blind, the will is signed by another without an attestation clause, suspicious circumstances, or a mistake during preparation of the will.

Question 2

Undue influence conditions

Answer 2

To impose unlawful pressure on the testator so that the will does not reflect the testator’s true wishes, but rather the one of the influencer. The challenger must prove actual undue influence and the threshold is higher than for a contract or lifetime gift (for these, equitable undue influence is available, where undue influence is presumed based on relationship between giver and receiver). It is legitimate to seek to persuade the testator.

Undue influence may be applied by a third party, in order to benefit someone else (Schomberg v Taylor)

No presumption of undue influence and claims are typically confined to coercion/duress (forced or threatened)

Effect: the will is void and has no effect

Question 2

Presumption of due execution

Answer 2

Presumption of due execution: if the will includes a correctly drafted attestation clause, there is a presumption that the will has been correctly executed. Presumption still exists if the will does not contain attestation clause, as long as there is no evidence that the will has not been duly executed. Rebuttable if e.g. circumstances vary from what was recorded in the attestation clause, a weaker presumption where the clause is irregular.

Question 3

Will - formal requirements

Answer 3

1. The will must be in writing. Where both pen and pencil is used: pen is presumed written at the time of the will, but pencil is presumed as drafts and not valid unless evidence to the contrary. No requirement to date the will.
2. Signed by testator: any mark is ok, but photocopy is not a signature. A photo of the will can be an application for a grant of probate, including an affidavit. The will can be signed by someone on the testator’s behalf and there are no restrictions regarding who this third party can be (can be a witness, sole beneficiary etc) as long as the testator is both physically and mentally present. Attestation clause must be adapted and explain what happened. The signature can be anywhere on the will, but an affidavit might be required if at the beginning.
3. Intention: the estator intended to sign the will, as a will. All pages must be connected e.g. in the same room or controlled by the testator during execution. Unexecuted can be part of will (hence admitted to probate with the will) if (i) clearly identified in the will, (ii) already exists at the date of execution or later codicil, (iii) is referred to in the will.
4. The testator has capacity (see above)
5. Two witnesses: no formal requirement regarding who can witness. An example question where one was minor and one alcoholic. Will is still valid (not void) but not correctly executed due to the alcoholic.

Question 4

Witnes requirement if testator is signing the will (not just acknowledgning

Answer 4

If the testator is signing the will and not just acknowledging: the witnesses must be aware that the testator is writing (do not have to see what), and each witness must sign the will in presence of the testator, but not necessarily in the presence of the other witness.

Question 5

Witness requirement if testator is just acknowledging signature

Answer 5

If the testator or witnesses is acknowledging (a small nodd or explanation by a witness who saw the actual signature is e.g. enough): the testator must acknowledge his previously written signature to the witnesses. The witnesses must be able to see the signature, if they wish (not met if signatures are covered by a page which could be uncovered if asked for it). The testator and both witnesses must be present when the testator signs and acknowledges the will, but the witnesses do not have to sign or acknowledge their signature in the presence of each other. No attestation is necessary. Witnesses do not need to know that they are signing a will.

Question 6

Who can witness wills

Answer 6

anyone. can be under 18 and under influence of alcohol and the will is still valid.

A beneficiary/married partner of any beneficiary can witness, but beneficiaries and their married partners will then lose their benefit under the will. The will is still valid.

Gift is likely saved if there are two other witnesses.

Question 7

Statutory will def

Answer 7

Statutory will: made by the court for people who lack capacity. Must be sealed by the court. Likely to be made if the testator’s circumstances were altered in a major way, property a deems, changes in relationships to beneficiaries, doubts about validity, high value assets.

Question 7

Foreign will def

Answer 7

Foreign wills: valid if it conforms to the law of the jurisdictions where it was executed, the testator has domiciled or habitually resident or which the testator was a national.

Question 8

Mutual will def

Answer 8

Mutual wills: (i) two or more people executes pursuant to an agreement, (ii) parties agree that the surviving party shall not alter their will, (iii) first party dies. Agreement can be oral or in writing, but must be written for disposition of land

Question 9

FOrmalities changing wills

Answer 9

If you make any changes to your will you must follow the same signing and witnessing process. UK GOV: If you cannot meet with your witnesses in person, you can watch each other sign your will remotely (for example by video conferencing). You can only sign remotely in England or Wales.

Question 10

Letter of wish def

Answer 10

Letter of wishes: not legally binding but may accompany will to e.g. explain. No witnesses required.

Question 11

Alterations before the will is executed

Answer 11

Alterations before the will is executed: if signed, it has the presumption that it was made prior to execution. Rebuttable by external evidence, such as affidavit from drafter or witnesses.

If unsigned, the presumption is that it was made after execution and therefore invalid. Pen superseeds pencil.

Question 12

Codicil - formal requirements

Answer 12

Same formal requirements as wills. If codicil amends will, the date of the codicil and not will will apply. E.g. youngest son will be at the time of the codicil and not the will.

Question 13

Post death changes to will

Answer 13

Post death changes:
Disclaimer: a beneficiary can disclaim their inheritance either orally or in writing to a personal representative. The estate mistreated as if the beneficiary predeceased the deceased.
Variation: beneficiary can choose who gets their share or part of it

Question 14

Doctrine of conditional revocation/dependent relative revocation of wills

Answer 14

Doctrine of conditional revocation/dependent relative revocation: alterations to will made directly or indirectly conditional of the original gift failing.

Re Itter: a woman amended sums in will with paper strips with new numbers. The court found that the paper strips did not revoke the original wording (was not crossed out) but intended to make the amendment of the old number conditional on the new number being valid. The amendment was not duly executed and the original numbers were admitted to probate

Question 15

Effect of unattested alterations made after execution

Answer 15

Alternation after the will is executed: void unless either (i) signed by testator and at least two witnesses or (ii) the entire will, including the alterations is re-executed or confirmed by codicil (referring to the alterations)

Effect of unattested alterations made after execution where the original wording is apparent: the alteration is ignored and the original wording is admitted to probate.

Effect of unattested alterations made after execution where the original wording is no longer apparent: the wording is revoked and will be admitted to probate with a blank space where the obliteration was. Evidence (such as copy of will) is allowed to show that the testator did not intend to revoke the original wording or simply revoke it conditionally (often by substituting a figure with a higher figure). The court could allow substituted wording if the new gift is successful, if not the original wording will stand

Question 16

What happen if a revoked will is not replaced

Answer 16

Revoked wills could be replaced by a copy of the revoked will, if a new will has not been made and original the will was revoked conditional on a new will.

Question 17

Methods for revokation of will

Answer 17

methods of revocation
Testator must have capacity and no mutual will is in the way of revocation. A will is never revoked based on an assumption that the testator’s circumstances have changed. A revoked will can be revived by the same formalities as a regular will (made at the time of re-execution).

Question 18

Revocation by destruction

Answer 18

Revocation by destruction
Act of destruction: Burned, torn or destroyed, or otherwise destroying the will. Requires that the entirety of the essence of the will, not just part of it, is revoked. Crossing out parts and writing “these are revoked” is not enough. If only an essential part is destroyed e.g. all signatures are cut out or scratched by pen, the court could rule that the will is revoked. +
Intent to revoke: Requires intent to destroy by the testator and that the destruction is in the presence by the testator AND by his direction, or at the hand of the testator. The testator must complete all he intends to destroy e.g. a will is note revoked if the testator intends to burn the whole will, but solely burns a section. Intent will not be fulfilled if the testator lacked capacity when the will was destroyed. Not revoked if the testator mistakenly thought it was replaced by a new will (doctrine of dependent relative revocation). E.g. a testator burnt his will thinking how wolfe would inherit all under intestacy, the court found that the revocation was conditional and held the will to be valid. OBS an intent to make a new will is not enough.
If only a less significant part of the will is destroyed, the court will likely just find the will partially revoked.
A will that was last known to be in the testator’s possessions but that cannot be found, is presumed destroyed with intent and revoked. A copy found in the deceased possessions was in Re Webb enough to prove to probate when the original could not be found.

Question 19

Revocation by later will or codicil

Answer 19

Revocation by later will or codicil:
express or implied, in whole or in part.
Express revocation is clearer and could be limited to certain clauses. “This is the last will and testament of x” is not clear enough to revoke a previous will.
Revocation can be implied where a later will is inconsistent with provisions of the earlier document.
Revocation takes effect on execution - hence the earlier will is revoked even if the later one is lost, destroyed etc.
If subsequent will is void, e.g. drawn under undue influence, the previous will is not revoked.

Question 20

Revocation by written intention to revoke

Answer 20

Revocation by written intention to revoke
A person with capacity expressed in writing that a will is to be revoked + complies with formalities (written doc is signed and witnesses x2) and not made under undue influence, the will is revoked.

Question 20

Presumption when a gift is made - wills

Answer 20

Gifts are regarded as taking effect immediately before the testator’s death, rather than the date of the will, unless otherwise follows from the will or the gift is to a specific beneficiary. A gift of real property is presumed to include all interests of the testator, both equitable and legal.
Specific gift: specific property e.g. land. Subject to ademption and fails if the property is no longer part of the estate on the date of the testator’s death

Question 20

How does marriage and divorce affect wills?

Answer 20

Marriage and civil partnerships revokes any will made prior to marriage. Presentable by making a will in contemplation of the marriage, but must be specific and preferably naming the spouse (general statement is not enough) + must be due in the foreseeable future.

Separation does not affect the will

Divorce partially revokes the will, so that all parts appointing the spouse as executor/trustee are deemed as revoked. Legacy to the spouse will laps and fall into residue. Where the gift is of the residue it will fail and pass under rules of intestacy

Remarriage: automatically revokes will

Voidable marriage revokes the will, but a void marriage does not affect it.

Question 21

General gift

Answer 21

General Gift: provided out of the testator’s general estate. Not subject to ademption and if the estate does not hold it (e.g. 300 shares in British gas), the executors have to obtain it

If an absolute gift is given to a spouse with an interest to an issue, it is presumed that the gift is absolute notwithstanding the interest to the issue.

Question 21

Demonstrative legacies

Answer 21

Demonstrative legacies: a general gift, but with a specified designated fund (e.g. 100 to Arne from the BND account). Not subject to ademption, and the executors will have to resort to the rest of the estate for the gift to be made.

Question 21

DMC (Donatio Mortis CAusa)

Answer 21

DMC (Donatio Mortis CAusa) is a gift made in contemplation of the death of a donor, but forms part of estate for family provision claims and IHT

Question 22

Class gift: definition + when does a class end

Answer 22

Class gift: given to a group of people.

Fails if all members of the class predeceases the deceased.

Class closing rule: to avoid that an infinite amount of people fulfil the criteria of the class and the gift can never be distributed, the class will automatically close when the first person fulfils the relevant criteria.

E.g. if the class gift is to all grand children reaching the age of 18, the class will close once the first reaches 18. Any grandchildren that came to existence after this will not be included in the gift.

Question 23

Gift to several people

Answer 23

Joint tenants: if a gift is made to 2+ beneficiaries as joint tenants (100 GBP to jo and sue) those beneficiaries living at the time of distribution gets their share. The gift lapses if all are dead.
Tenants in common: if a gift is made to 2+ beneficiaries as tenants in common, the gift only lapses for those who die and the living will receive their share.

Question 24

Pecuniary gift

Answer 24

Pecuniary gift: money of money, entitled to interest from the end of the executors year until payment.

Residuary legacies: remaining estate not disposed of in other ways.

Question 25

When does a gift laps?

Answer 25

Gifts laps if beneficiary does not survive the testator (does not go to issue unless this is included in the will). If the beneficiary is a residuary beneficiary, the gift will pass under intestacy.

A gift does not fail on the grounds of uncertainty if there is a statutory presumption of specific rule of construction to identify the beneficiary: e.g “children ‘’ includes legitimate and illegitimate children and adopted children.

If a gift fails and there is no effective substitutionary gift, the gift becomes part of the testator’s residuary estate.

Survivorship clause: Clause which includes a substitutionary gift of the original gift fails. E.g. A shall have my vase, unless A dies less than 28 days after me, then the vase shall go to B.

Question 26

Ademption gifts

Answer 26

Ademption: Specific gift lapses if it no longer is part of the estate. General gifts or demonstrative legacies cannot be adeemed.

Test (i) does the gift refer to a specific property and (ii) is that property in the testator’s estate?
If the gift has only changed in form but not substance, the gift will be valid e.g.

A company went into liquidation but was amalgamated with a new company the gift is NOT adeemed
A company changed names and sub-divided existing shares the gift is NOT adeemed

Company exchanged debentures the gift IS adeemed
Company was acquired by statute by another company and the testator opted for receiving stock instead of cash the gift IS adeemed

A specific gift is moved to a different bank is adeemed

A specific gift moved to a different account in the same bank is not adeemed if the purpose was to earn a higher interest
If the testator first makes a will gifting a property and then is the seller of the same property that does not complete before he dies, the executors are bound by the contract and proceeds from the sale will be part of the estate. A gift in the will of the same property will abate, but the recipient can enjoy the property until completion.

If the testator signs a contract to sell the property and before completion he makes a will, leaving the property to a beneficiary, the beneficiary will be entitled to proceeds from the sale. This is because the testator clearly was aware of the disposition when he was making the will.

Ademption will not occur if: (i) general or demonstrative gift instead of specific, (ii) the gift was given without authority, or (iii) the property did not change substance (only form), or (iv) the gift was drafted to avoid ademption (e.g. a substitutional gift)

Question 27

Abatement

Answer 27

Abatement: the order in which assets are applied by the executors for payment of expenses, debt etc. A general gift is immune to ademption but not abatement, whilst a specific gift is immune from abatement but not ademption. A demonstrative gift is immune from both.

Question 28

Doctrine of Lapse:

Answer 28

Doctrine of Lapse: where there is a gift to an issue and the beneficiary dies before the testator, but the issue of the original beneficiary is still alive, the gift does not laps, but will pass to the surviving issue in equal shares. The same applies if the gift is given to a class of issue. The doctrine does NOT apply if the gift is not given to direct descendants of the deceased. Then the fist would laps and fall to intestate.

Question 29

Lassence v Tierney

Answer 29

Lassence v Tierney: If a will contains a gift which appears to be absolute, but also contains information that it is to be held on trust, the gift shall be held on trust until it becomes ineffective and then revert to an absolute gift. The rule does not apply if this is not an absolute gift. Then the gift will laps.
A gift of real property is presumed to include all interests - legal and equitable.

Question 30

Charitable gifts which do not clearly identify a charity - fail?

Answer 30

Charitable gifts which do not clearly identify a charity do not fail, provided there is a general charitable intention. The Cy-pres from trust is applied and the gift can be given to another charity.

Question 31

Gift to witness - fail?

Answer 31

Gifts to witnesses fail, unless there are more than 2 witnesses. A pecuniary legacy to an executor is presumed conditional upon the person acting as an executor.

Question 32

GIfts to solicitors drafting the will - fail?

Answer 32

GIfts to solicitors drafting the will could not be accepted and may constitute a conflict of interest. Gift of 1% or more should be considered significant.

If a residuary beneficiary predeceases the deceased, the gift will fail and fall into residuary estate. For residuary beneficiaries, the residuary will pass under intestate rules.

Question 33

Intestacy - when does it occur?

Answer 33

Section 46 of The Administration of Estates Act 1925
Total intestacy: dies without will
Partial intestacy: will does not dispose of the whole estate

Question 34

issue def.

Answer 34

Issue includes all children and remote descendants of the deceased whether legitimate or illegitimate EXCEPT stepchildren (must be adopted). Must be over 18 or married, if not their part is held on trust.

Question 35

Spouse def. intestacy rules

Answer 35

Spouse: must survive for 28+ days after death to inherit under intestacy rules.

Question 36

Personal chattel def.

Answer 36

Personal chattel: all tangible property except: money or securities, used at the time of death for business purposes, held at time of death solely as an investment.

Question 37

Order of entitlement under intestate

Answer 37

Surviving spouse: takes everything unless issue

Spouse + issue: If net state is less than 322 000, everything goes to the spouse. If the net state is more than 322 000, the spouse gets 322 000, personal chattel and the spouse + issue share the rest.

No surviving spouse: children share everything equally

No surviving spouse or issue: parents

Order of more remote family members:
Whole blood brothers and sisters
Half blood brothers and sisters
Grandparents
Whole blood Uncles and aunts
Half blood Uncles and aunts
The Crown

Question 38

Matrimonial home - how disposed of under intestacy=

Answer 38

Matrimonial home: if the surviving spouse was resident there at the time of death, the house or deceased interest can be purchased.

Solely owned by deceased: value passes to estate and is distributed under intestacy rules. Could be bought by the surviving spouse, valued at the date of appropriation.

Tenants in common: the deceased share will pass into estate and the intestacy rules, but surviving spouses keep their shear. Could be bought by the surviving spouse, valued at the date of appropriation.

Joint tenants: deceased interest will pass to the surviving spouse under property law.

Question 39

Statutory trust def.

Answer 39

Statutory trust: A trust that arises on an intestacy where the issue of the deceased is entitled to the whole or part of the estate. means that the rest of the estate will be distributed among all children in equal shares, living at the date of the death (including not yet born), if one dies, their share will pass to their own issue, contingent on the beneficiary marrying or reaching 18 years.

Question 40

Which Property passing outside the estate

Answer 40

Property passing outside of the estate: jointly owned property, nominated property (Statutory nomination made towards a third party), gifts in DMC (conditional on donor’s death, but will still have to pay ITH).

life policies
It depends on how the insurance policy was written, but life insurance payouts do not generally form part of the deceased’s estate and therefore a Grant of Probate is not required to claim them. Typically, they are made directly to the beneficiaries named in the policy and therefore never come into or out of the deceased’s estate.
pension scheme benefits

Property not part of the estate for IHT or succession purposes: life assurance policy written in trust (belongs to beneficiary of trust), pension scheme benefits.

Question 41

Grant of Representation

Answer 41

Grant of Representation: granted by the High Court and can either be a grant of probate or letters of administration.

Letters of administration: appoints administrators for people dealing with estate without will. Does not have authority prior to the grant.

Grant of probate: authorizes executors under a will. Authority to act is granted by the will and the probate merely confirms the authority.

Question 42

Letter of administration

Answer 42

Letters of administration: appoints administrators for people dealing with estate without will. Does not have authority prior to the grant.

Question 42

What must the PRs do before applying for a grant of representation?

Answer 42

Before obtaining a grant of representation, the PRs must submit an HMRC account with details of the deceased taxable estate, value and pay any IHT.

Account must be delivered within 12 months of the end of the month of death (can be done before to e.g. avoid interest on unpaid tax from 6 months). Solicitors acting for PRs must also obtain an overview of all assets and liabilities for IHT purposes.

Claim questions regarding validity of will should be made before probate is granted.

Caveats: Must be entered in before probate is granted and prevents PRs from obtaining grant of representation - useful if will is disputed. Caveators must be 18+ and have an interest in the estate. Applicants of probate can issue warnings that they will oppose the caveat.
Jurisdiction: Chancery DIvision in the High Court (part 57 of Civil Procedure rules). Contents of wills are confidential except if the executor agrees to disclose or there is a valid reason.

Question 42

Grant of probate

Answer 42

Grant of probate: authorizes executors under a will. Authority to act is granted by the will and the probate merely confirms the authority.

Question 43

What are expected estates?

Answer 43

Excepted estates: No IHT is payable as the value of the estate is below the (the relevant IHT threshold). OBS this differs from every estate, depending on whether there is any transferable Nil Rate Band (nil rate band of 325 000 GBP in 2023). After 2022, no forms are needed. Before 2022, fill in form 205 + grant application.

Excepted estate conditions:
(i) died domiciled in the UK,
(ii) all property passes under will, intestacy rule, statutory nomination, survivorship, or single settlement with life interest in trust property where value of funds are less than 150 000 GBP (before 1 January 2022) and 250 000 GBP (after 1 January 2022), value of non-uk assets are less than 100 000 GBP, there are no lifetime chargeable assets in the 7 years before death, total value of gross estate does not exceed Nil Rate or 1 000 000 GBP before 1 January 2022 or 3 000 000 GBP on or after 1 January 2022.

Question 44

How can PRs make initial payment if IHT

Answer 44

IHT must be paid before grant of probate. Grant is needed to administer an estate, so the easiest way to pay IHT is to contact the deceased bank and ask them to transfer. PRs can also sell parts of the estate, taking into account the will and any specific gifts, wishes of beneficiaries, assets falling in value and tax implications.

Loss on sale relief: If PRs sell shares less than 12 months or land less than 4 years after death for less than probate value, they could get a refund of IHT.

Question 45

Executor - role

Answer 45

Executor (grant of probate): cannot suffer from mental illness, can be a minor, but a minor cannot apply for probate, former spouse (after divorce) will fail. Max 4 executors in a grant of probate. If an executor dies before the deceased or after the deceased but before grant of probate, other names of executors will replace the deceased. If there are no more executors names, but the last living executor has named executors for their own will that have taken out probate - the executor of the executor will also take over the original estate (Chain of representation).If there are no executors, NCPR rule 20 will apply.

Both executors and administrators can renounce.

Question 45

Administrator - role

Answer 45

Administrator: must be appointed if no will, no appointment of executives in will, executives have died. A minor cannot be an administrator and there can be maximum 4. If someone dies intestate the rules of intestacy determine who will be administrator. If there is only one person entitled e.g. a spouse, that person may renounce, so that the next in line can administrate.

Both executors and administrators can renounce.
Collect and get in real and personal estate to administer. Prepare and deliver inventory to court within reasonable time. After collection, PRs must pay debt and legacies.

Question 45

IHT - rate, nil rate and exception with reduced rate

Answer 45

Payable on value transferred by a chargeable transfer incl. Gifts. The chargeable amount is the value transferred by the transferor, rather than the value of the gift in the hands of the recipient.
Nil band rate: Estate under 325 000 GBP = 0% IHT
Above Nil rate IHT is 40%
reduction to 36% if more than 10% of estate is given to charity
Calculation: value of estate - liability = 325 000 + x, x - 40% = value after tax

Question 46

PRs fiduciary duty, how can they protect themselves from liability?

Answer 46

PRs are in fiduciary duty, like trustees, and must act in good faith. Most PRs act alone, as opposed to trustees. If more than one is appointed, all must join in any contract for sale of land and purchase deed.

PRs are personally liable for loss from breach of their duties, but normally not vicariously liable (for other PRs breaches)
If not all the estate is administered (e.g. beneficiary is a minor) the PRs hold that part of estate on trust.

To ensure that all claimants are found: s. 27 of Trustee Act PRs can protect themselves by advertising in the London Gazette and local newspapers + waiting two months thereafter + make searches in Land Charges Registry + bankruptcy search. S. 27 does not free PR’s from liability if the PR had knowledge about claimant or ought to have known.

If beneficiary is known but missing PRs must obtain Benjamin order form court to distribute.
To protect themselves from liability, PRs can obtain insurance cover, include an indemnity from known beneficiaries in case others show up or set aside a reserve fund.

Question 47

What happens if PRs does not identify al beneficiaries?

Answer 47

PRs are protected if ignoring adopted children where they had no notice (but the adopted can still make claim against other beneficiaries

Claims against the estate can be made 6 months after grant of representation (protects PR from liability), but late application can be made by leave of the court.

Question 48

Who can make claims against an estate + on what grounds?

Answer 48

Fall within 1 of 6 categories:
Spouse or registered partner
Former spouse or reg partner
Child, including step and adult children (Adult children are usually reluctantly awarded financial provisions)
Person that was being maintained by the deceased before death. Sufficient to show that the deceased had assumed responsibility
Any person that for a 2-year period before death lived in the same household as a cohabitee, even if not maintained by the deceased. Length of living together is considered.

Ground
Satisfy the court that the will or intestacy makes reasonably financial provisions for the applicant

Surviving spouse is usually found reasonable, but the court will consider age and duration of marriage, applicants contribution to welfare of deceased and if what the applicant could have expected if the marriage ended in divorce

All others must be assessed based on:
Financial resources and needs
Moral obligations owed by the deceased
Applicants physical and mental disability
Size and nature of estate
Potential relevant matters: conduct, caring etc.

Question 49

IHT rate + due within

Answer 49

IHT is due 6 months after the end of the month of death
IHT rate 40 %

Question 49

What part estate is charged with IHT?

Answer 49

All estate is charged, including
Where property is reserved for certain benefit
Property passing under will
Jointly owned property if tenants in common
Lifetime gifts made conditional of death
Interest in possession trusts
IHT is cumulative and a record of all charges for the last 7 years is kept to calculate tax.

PRs are liable for paying IHT on all property included in the estate, including joint tenancy estates.

Estate rate: if the testator provides that certain gifts are to bear their own tax, it is necessary to calculate which tax is to be attributed to certain gifts.

IHT on settled property is payable by trustees for property comprised in the settlement, but the beneficiary is responsible for paying IHT to trustees on property that vests in the beneficiary

Question 49

IHT exemptions

Answer 49

Jointly owned property if joint tenants
Excluded property
lump sum payments from pension fund
Life tenant in interest in possession trust: will be taxed for IHT once the beneficiary dies.
Gift to charities are exempt
First 3000 GBP gifts every years

Gifts to individuals limited to 250 per gift in a tax year

Gifts in consideration of marriage: parents can give 5000 each, remote relatives 2500 each, non-relations 1000 each.

Spouse exemption: spouse does not pay IHT, under will nor intestate.

Spouse exemption: If two spouses die in close connection, less IHT is paid. Estate passing to a spouse is not taxed for IHT, but when it shifts to intestate, the last living spouse’s part of the estate is taxed for IHT. Furthermore, the NIL band rate is transferable between spouses. WHen the first spouse dies and if all is transferred to the second spouse under spouse exemption, no IHT is payable. When the second spouse dies, IHT will only be payable on assets twice the Nil band rate.

Question 50

PET potentially exempt transfers - rates

Answer 50

PET potentially exempt transfers, only taxable if testator dies after less than 7 years:
0-3 100%
3-4 80%
4-5 60%
5-6 40%
6-7 20%
7+ no tax

Question 51

Quick succession relief QTS - rates

Answer 51

Quick succession relief QTS: applies where a person dies within five years after receiving a chargeable transfer to avoid double charge. Formula is completed, but know about it.
1-2 years after death of 1 person: -80%
2-3: -60%
3-4: -40%
4-5: -20%

Question 52

WHen does PRs have to pay income tax?

Answer 52

Income tax must be paid for the tax year death occurred, as well as from the date of death to finalization of the estate administration.

Question 52

When is CGT paid in distributing the estate?

Answer 52

CGT is only payable if PRs sell parts of the estate - no CGT is payable if PRs transfer property to beneficiaries.

Assets are deemed acquired by PRs for the higher market value at death, rather than lower when they were purchased by the deceased.

Question 53

Are beneficiaries liable for CGT?

Answer 53

Based on market value at the date of death. Beneficiary is not usually liable for CGT on inheritance, but if the beneficiary sells the asset for profit at a later date and it is not their main residence, a chargeable gain will be liable for CGT. Beneficiary can use the annual exemption (23/24: 6000 GBP)