Wills formative

Question 1

A woman made a valid will leaving all of her estate to her brother.
A few day before she died and believing she was unlikely to survive much longer, the woman gave her gold ring to her granddaughter and said “I want you to have this, but only in the event that I die”.
The woman also owned the following assets in her sole name:
* House (owned as tenants in common with her spouse)
* Life insurance policy (not written in trust)
* Chattels
* Cash in bank account
Assume that all debts and expenses are paid from the woman’s bank accounts.
Which assets will the woman’s brother be entitled to?
Select one alternative:
* The woman’s half share of the house, life insurance proceeds, chattels (excluding the gold ring) and the remaining cash in the bank account.
* Chattels (excluding the gold ring) and the remaining cash in the bank account.
* The woman’s half share of the house, life insurance proceeds, chattels (including the gold ring) and the remaining cash in the bank account.
* The woman’s half share of the house, life insurance proceeds and the remaining cash in the bank account.
* Chattels (including the gold ring) and the remaining cash in the bank account.

Answer 1

• The woman’s half share of the house, life insurance proceeds, chattels (excluding the gold ring) and the remaining cash in the bank account.

The woman’s brother is only entitled to receive the assets passing as part of her succession estate. This includes the share of the house owned as tenants in common (it is joint tenant property that passes outside the succession estate), life policy proceeds (because these have not been written in trust), chattels (her spouse is not automatically entitled to these where there is a will) and the cash balance in her bank account. The woman’s succession estate excludes the gold ring which is the subject of a donatio mortis causa.

Question 2

A man died leaving a valid will that includes the following gifts:
* I give my chattels to my nephew
* I give £30,000 to my niece
There are no other gifts in the will.
The man’s estate includes his chattels, cash of £50,000 and a house in his sole name (worth £500,000).
The man is survived by his niece, nephew, spouse and adult son. The man’s daughter had pre-deceased him leaving her own daughter (the man’s granddaughter) who also survives the man.
Which of the following best describes who will inherit the man’s estate?
Select one alternative:
* The man’s nephew, niece, spouse and son.
* The man’s nephew, niece and spouse.
* The man’s nephew and niece.
* The man’s nephew, niece, spouse, son and grand-daughter.
* The man’s spouse, son and grand-daughter.

Answer 2

• The man’s nephew, niece, spouse, son and grand-daughter.

The man has died partially intestate because the will does not deal with all of his estate. The cash legacy and chattels are given to the man’s niece and nephew under the terms of his will. The other assets (the cash balance and the house) pass in accordance with the intestacy rules. Under intestacy, the man’s spouse and children will receive a share of these assets. The man’s daughter cannot inherit as she has pre-deceased the man, but her daughter (the man’s granddaughter) will receive the share of the estate that would have passed to her parent under the substitution limb of the statutory trusts. The other options were incorrect because they did not include all of the beneficiaries.

Question 3

A woman died 6 months ago leaving a valid will that gives the whole of her estate to her brother (B).
B has just entered into a deed of variation of the woman’s will to re-direct a cash sum of £100,000 to the woman’s adult son (S). B made an election under s.142 Inheritance Tax Act 1984 but not under s.62 Taxation of Chargeable Gains Act 1992.
Inheritance tax was payable following the woman’s death and she did not own any exempt assets.
Which of the following is correct?
Select one alternative:
* HMRC should be notified about the deed of variation.
* The woman’s PRs will have to consent to the deed of variation.
* B will have to survive 7 years after giving £100,000 to S to avoid any inheritance tax consequences.
* For inheritance tax purposes the woman has made a gift to S under her will.
* B has made a disposal to S and capital gains tax maybe payable as a result.

Answer 3

• For inheritance tax purposes the woman has made a gift to S under her will.

As B made an election under s.142 IHTA the gift of £100,000 from B to S is treated as having been made (for IHT purposes) by the woman’s will. The other options were incorrect because: i) B does not make a PET so does not need to survive 7 years to avoid IHT consequences, ii) although no election is made under s.62 TCGA, cash is exempt so CGT is irrelevant, iii) HMRC do not need to be notified, nor do A’s PRs need to consent, because the variation has no effect on the amount of IHT payable (there are no exempt beneficiaries or exempt assets).

Question 4

A client wants advice on the inheritance tax position following their death.

The client currently owns a runs a small organic farm which includes the farm house in which the client lives with his wife. The client purchased the farm in his sole name three years ago and the current market value is £1M. The agricultural value is £500,000.

Which of the following correctly states the position with regards agricultural property relief (APR) assuming the client dies tomorrow?

Select one alternative:
* If the client left his estate to his spouse, the amount of spouse exemption available would be greater than the value of any APR that could otherwise be claimed.
* APR of £1M can be claimed.
* No APR can be claimed in relation to the value of the farm house because it is used for residential purposes.
* APR of £250,000 can be claimed.
* No APR can be claimed because the client has not owned and occupied the farm for at least 7 years.

Answer 4

• If the client left his estate to his spouse, the amount of spouse exemption available would be greater than the value of any APR that could otherwise be claimed.

There is no limit to the amount of spouse exemption that can apply (the exemption is 100% of the value of the items inherited by the deceased’s spouse). The amount of APR available is limited to the agricultural value of the exempt assets. The other options were incorrect because: i) it is possible for APR to apply to a farm house provided it is of a character appropriate to the farm, ii) as the client owns and occupies the land for farming purposes, the minimum period of ownership is 2 years not 7, iii) APR is claimed in respect of the agricultural value of the land, not the market value.

Question 5

Your client and his sister have been jointly appointed as executors of their father’s estate. They have arranged the funeral which is taking place today. Your client has just received a job offer to work in Spain for 12-18 months and wants to know if there is any way that he can let his sister administer the estate without him.
Which of the following is correct advice for your client?
Select one alternative:
* He can renounce probate because he will be unavailable for at least 12 months and therefore the administration would not be completed within the “executors’ year”.
* He can only renounce probate if his sister agrees.
* He can renounce probate because he has not intermeddled with the estate.
* He can renounce probate because he will be leaving the UK.
* He cannot renounce probate because if he does there will only be one executor remaining and a minimum of two is required.

Answer 5

• He can renounce probate because he has not intermeddled with the estate.

A person may only renounce probate if they have not intermeddled. Arranging a funeral is not intermeddling but an act of common humanity so your client can renounce. The other options were incorrect because: i) an executor may continue to act from abroad ii) the consent of a co-executor is not required ii) although being “unavailable” may be the reason why a person wishes to renounce this is not a determining factor in whether they are entitled to and iv) one executor is sufficient.

Question 6

An elderly testator recently executed his will. The testator suffers with arthritis in his hands and, although there is no doubt regarding his capacity, on the day of execution, he was unable to hold a pen and instructed his solicitor to sign on his behalf.

The will was signed by the solicitor on behalf of the testator, and witnessed by two independent adults. The testator, solicitor, and both witnesses were all present throughout the execution process.

The following attestation clause was included in the testator’s will:
“Signed by the above named Testator in our joint presence and then by us in his”
Select one alternative:
* The will is invalid because the testator did not sign it himself.
* The will is invalid because the attestation clause does not specify that the solicitor signed on behalf of the testator.
* There is no presumption that the testator had knowledge and approval.
* There is a presumption that the testator had knowledge and approval because the will was executed in accordance with the requirements of s 9 Wills Act 1837.
* There is a presumption that the testator had knowledge and approval because the testator had testamentary capacity.

Answer 6

• There is no presumption that the testator had knowledge and approval.

The presumption of knowledge and approval does not apply because the will was signed by someone else on behalf of the testator and this was not expressly confirmed in the attestation clause. The other options were incorrect because although a presumption of knowledge and approval would usually apply where the testator has capacity and has executed the will in accordance with s 9 requirements, this does not apply where the testator themselves does not sign (and the attestation clause does not reflect what occurred). A will can be validly executed even if not signed by the testator, provided that is it signed by someone else at the testator’s direction and in his presence (as occurred in this case). The inclusion of an attestation clause (correctly drafted or not) is not a requirement for a will to be valid.

Question 7

A man died and by his will left all his estate to his wife. He made no lifetime gifts.
The man’s wife (W) died recently and by her will leaves all her estate to her children. She made no lifetime gifts.
W’s taxable estate (after debts and liabilities have been paid) is worth £800,000 and comprises a single property which has always been let on a commercial basis (£600,000) and her various bank accounts.
In the tax year of W’s death the NRB is £325,000 and the main residence NRB is £175,000.
How much inheritance tax is due following W’s death?
Select one alternative:
* £30,000
* £0
* £120,000
* £60,000
* £190,000

Answer 7

£60,000

Step 1: W made no lifetime gifts so her cumulative total is 0. Step 2/3/4: The value of her estate after debts and liabilities is £800,000. Step 5: No exemptions or reliefs apply on facts given. Step 6: No RNRB applies as she did not own a residential property. Step 7: W’s PRs can claim 2 x basic NRB (W’s and a transferred amount from her pre-deceased spouse). We know the man did not use any of his own (he made no lifetime gifts and spouse exemption applied to the whole of his death estate) so the full amount can be transferred. £800,000 - £325,000 - £325,000 leaves £150,000 chargeable at 40%= £60,000.

Question 8

A man dies testate. His will leaves the residue of his estate equally between his children provided they reach the age of 21. There is an express substitution clause in the will which specifies that if any of his children do not survive him, their share passes absolutely (i.e. there is no age contingency) to their own children (the man’s grandchildren).
The man is survived by his spouse and three children A (25), B (19), C (16). The man had another child (D) who died before him. D’s spouse (S) and their two children X (3) and Y (6) survive the man.
Which of the following most accurately states the beneficiaries with a vested interest in the residue of man’s estate?
Select one alternative:
* S, A and B
* A and B
* A, X and Y
* S, A, B, C, X and Y
* A, B and C

Answer 8

• A, X and Y

Question 9

A woman died recently. Ten years before she died the woman gave a holiday cottage she owned to her children. The children are the registered owners of the property. After making the gift, the woman continued to stay in the cottage each year up until she died. She did not pay her children rent for her use of the cottage.
The property was worth £100,000 when she made the gift and was worth £150,000 when she died.
Which of the following is correct in relation to the woman’s inheritance tax estate?
Select one alternative:
* The holiday cottage is included at the value of £100,000.
* The holiday cottage is included at the value of £50,000.
* The holiday cottage is excluded because she was not the legal owner at the date of her death.
* The holiday cottage is included at the value of £150,000.
* The holiday cottage is excluded because she gave it away more than 7 years before she died.

Answer 9

The holiday cottage is included at the value of £150,000.

The woman has made a gift with reservation of benefit. Although she is no longer the legal owner of the holiday cottage, for inheritance tax purposes she is treated as never having given the cottage away because she continued to benefit from it without paying rent. Therefore, the value of the cottage at the date of her death is included in her estate. The other options were wrong because: i) the cottage did not fall outside of her taxable estate, ii) the value at the date of death is relevant, not the increase in value since the gift was made and not the value of the property when it was given away. Note that the date of death value is used whether the value of the asset has increased or decreased since the date of the gift.

Question 10

A man (M) and his unmarried adult daughter (D) both die intestate as a result of injuries sustained following a car accident. The man dies 2 days before his daughter. The man and his daughter are survived by the man’s adult son (S).
Both D and S have their own children (the man’s grandchildren), all of whom are alive and are under the age of 18.
Which of the following is correct?
Select one alternative:
* D’s half share of M’s estate passes under D’s intestacy to her children absolutely.
* D’s half share of M’s estate passes under M’s intestacy to S absolutely.
* D’s half share of M’s estate passes under M’s intestacy to D’s children by virtue of the substitution limb of the statutory trusts.
* D’s half share of M’s estate passes under D’s intestacy to any of her children who reach 18.
* D’s half share of M’s estate passes under M’s intestacy and is divided equally between S and any of D’s children who reach 18.

Answer 10

D’s half share of M’s estate passes under D’s intestacy to any of her children who reach 18.

The man’s estate will be divided equally between his son and daughter under the terms of his intestacy. Each of D and S will have a vested interest as they are adults and there is no minimum period of survivorship required. When D later dies intestate, her estate (which includes the half share of her father’s estate) passes under her own intestacy to her children. Her children inherit on the terms of the statutory trusts, i.e. contingent on reaching the age of 18. The other options were incorrect because: i) D has a vested interest in the half-share of M’s estate so these assets pass under her intestacy not his, and ii) Under D’s intestacy, her children inherit contingent on reaching the age of 18. As they are minors they do not inherit absolutely.

Question 11

A testator died leaving a will by which all of his estate was shared equally between his adult grandchildren, A and B. The estate assets included quoted company shares worth £200,000 on the date of the testator’s death.
A and B were each transferred half of the testator’s shares, which had increased in value to £240,000 by the date of the transfer, so A and B each received shares with a value of £120,000.
Eighteen months later A sold their shares for £130,000. A few months afterwards B sold their shares for £100,000.
Which of the following statements best describes the capital gains tax position?
Select one alternative:
* The PRs of the estate have made a gain of £40,000.
* The PRs of the estate have made a loss of £10,000.
* A and B both make a gain of £20,000.
* A makes a gain of £30,000. B makes neither a loss nor a gain.
* A makes a gain of £10,000. B makes a loss of £20,000.

Answer 11

A makes a gain of £30,000. B makes neither a loss nor a gain.

Where assets in an estate are transferred to a beneficiary by the PRs there is no capital gains tax disposal. The beneficiaries are treated as receiving the assets at their date of death value. So here, the shares were worth £200,000 in total on the date of death (with a half share being worth £100,000). This means A and B are both treated as receiving the shares with an acquisition cost of £100,000. When A sells the shares later for £130,000, A makes a gain of £30,000, and when B sells the shares later for £100,000, B has made neither a loss nor a gain. The other options were incorrect because: i) the gain/loss made by A and B was incorrectly described with reference to the transfer value of the shares (instead of the date of death value), ii) the gain/loss made by A and B was incorrectly described with reference to the increase in value between the date of death and date of transfer, iii) the PRs have not made a disposal so have not made a gain or loss for capital gains tax purposes.

Question 12

A woman died last month leaving a valid will that gives her collection of watercolours to her friend and the residue of her estate to her nephew. In addition to the woman’s house, her estate includes a car (worth £5,000), the collection of watercolours (worth £1,000) and a bank account (£20,000).

The personal representatives (‘PRs’) must raise £7,400 to pay inheritance tax (‘IHT’) and will not be using the instalment option.

Which of the following is the best advice for the PRs?

Select one alternative:
* The PRs should use the Direct Payment Scheme in relation to the funds in the woman’s bank account. The bank will pay a sum equal to the IHT bill directly to HMRC.
* The PRs should use the Direct Payment Scheme in relation to the funds in the woman’s bank account. The bank will pay a sum equal to the IHT due directly to the PRs, which they must then use to pay HMRC.
* The PRs should use the Direct Payment Scheme in relation to the funds in the woman’s bank account. The bank will pay a sum equal to the IHT bill directly to the beneficiaries.
* The PRs should sell the car and the watercolours and use the sale proceeds plus cash from the bank account to fund the IHT.

Answer 12

• The PRs should use the Direct Payment Scheme in relation to the funds in the woman’s bank account. The bank will pay a sum equal to the IHT bill directly to HMRC.

There is enough money in the woman’s bank account to cover the IHT due and so using the Direct Payment Scheme is the best option. The bank will settle the IHT bill directly with the bank. The watercolours have been left to the woman’s friend under her will and so should not be used to pay the IHT bill, especially as there is enough money in the bank account.

Question 13

A woman died intestate 6 weeks ago. Her personal representatives (‘PRs’) wish to protect themselves against the possibility that a personal claim is brought against them by one of woman’s creditors of whom they have no notice.

Which of the following best describes the steps the PRs should take before distributing the woman’s estate?
Select one alternative:
* They should wait until 2 months after the date of death to place an advert in the London Gazette (and a newspaper local to the area in which the woman’s house was situated).
* They should place an advert in the London Gazette (and a newspaper local to the area in which the woman’s house was situated) and wait 2 months from the date of the advert.
* They should place an advert in the London Gazette (and a newspaper local to the area in which the woman’s house was situated) and wait 2 months from the date of death.
* They should place an advert in the London Gazette (and a newspaper local to the area in which the woman’s house was situated) and wait 2 months from the date the grant of representation is issued.
* They should wait until 2 months after the date the grant of representation is issued to place an advert in the London Gazette (and a newspaper local to the area in which the woman’s house was situated).

Answer 13

They should place an advert in the London Gazette (and a newspaper local to the area in which the woman’s house was situated) and wait 2 months from the date of the advert.

Question 14

A man’s estate includes the following:
* Property owned as joint tenants with his spouse (value of whole £600,000, value of half £300,000, and value of half with 10% discount £270,000)
* Life interest in a will trust created by his father (trust fund value at creation £50,000 and value on the date of the man’s death, £75,000)
* Bank accounts (£3,000)
What is the value of the man’s gross taxable estate?
Select one alternative:
* £348,000
* £273,000
* £323,000
* £678,000
* £378,000

Answer 14

• £378,000

The man’s taxable estate includes the property, the life interest trust and his bank accounts. The man’s half share of the property is valued at £300,000 (there is no discount as related property rules apply - his spouse is the co-owner). The relevant value for the will trust is the value at death (not creation) here £75,000. Adding the bank accounts of £3,000 gives a total of £378,000.

Question 15

A man died recently leaving a will that gives the whole of his estate to charity. The man is survived by his spouse and her daughter (the man’s step-daughter) who is aged 15. Neither the man’s spouse nor his step-daughter were living with him at the date he died.

When he died, the man was living in a flat that he owed as joint tenants with his brother.

Which of the following is correct with regards a claim against the man’s estate under the Inheritance Provision for Family and Dependants Act 1975 (the ‘Act’)?
Select one alternative:
* The man’s spouse cannot make a claim under the Act because she did not live with the man at the date he died.
* The man’s step-daughter cannot make a claim under the Act because she is not his biological child.
* The man’s brother is only entitled to bring a claim under the Act if he was being financially maintained by the man at the date of his death.
* An award made to the man’s surviving spouse would be limited to the amount she required for her maintenance.
* The court does not have the power to make an award under the Act in respect of the man’s flat because this passes to his brother by virtue of the survivorship rules.

Answer 15

• The man’s brother is only entitled to bring a claim under the Act if he was being financially maintained by the man at the date of his death.

Question 16

A man died yesterday. He was survived by his mother (M), sister (S), his long-term partner (P) and their three children, A (21), B (19) and C (18). The man had not made a will.
Who has the best entitlement to apply for a grant of representation in the man’s estate?
Select one alternative:
* M
* P
* At least two of A, B and C (two applicants are required).
* S
* Any one of A, B or C

Answer 16

Any one of A, B or C

The testator died intestate and his three children will share his estate between them. No minority interest arises so only one PR is required. Rule 22 NCPR 1987 applies as the man died without making a will. Under NCPR 22 the beneficiaries of the estate (his children) have the best right to apply. They are all adult so have an equal entitlement. The other options were incorrect because M, S and P have no right to apply under NCPR 22.

Question 17

A woman died intestate. She was survived by her civil partner (CP), her parents and her children, A (20) and B (15). The woman’s civil partner died two weeks after the woman.

The woman’s net estate available for distribution is £400,000 (which includes her chattels worth £50,000)

Which of the following accurately describes the distribution of the woman’s estate under intestacy?

Select one alternative:
* CP is entitled to £400,000 absolutely.
* The woman’s parents are each entitled to £200,000 absolutely.
* CP is entitled to the woman’s chattels (£50,000), and a statutory legacy of £322,000, and half of the remainder. The other half of the remainder is divided equally between A and B on statutory trust.
* CP is entitled to the woman’s chattels and a statutory legacy (together worth £322,000) and half of the remainder. The other half of the remainder is divided equally between A and B absolutely.
* A and B are each entitled to £200,000 on statutory trust.

Answer 17

A and B are each entitled to £200,000 on statutory trust.

The woman’s civil partner did not survive her by 28 days so the woman’s estate is distributed under intestacy on the basis that she had issue but no surviving civil partner. In this situation the whole of the woman’s estate is divided equally between her children on statutory trusts. The other options were incorrect because neither the woman’s civil partner nor parents are entitled to take a share.

Question 18

A house is owned in equal shares by a man and a woman who lived together as an unmarried couple. The man has just died. A local estate agent has valued the house at £600,000.
What is the value of the man’s half share of the property for inheritance tax purposes?
Select one alternative:
* £300,000 - if the man and woman owned the house as tenants in common no discount is available.
* £300,000 - no discount is available because the man and woman were not married when they purchased the house.
* £300,000 - no discount is available because of the application of the related property rules between cohabitees.
* £300,000 less a percentage discount to reflect the fact that the house was co-owned at the man’s death with someone who was not his spouse.
* £300,000 - if the man and woman owned the house as joint tenants no discount is available.

Answer 18

• £300,000 less a percentage discount to reflect the fact that the house was co-owned at the man’s death with someone who was not his spouse.

The value of the man’s half share can be discounted because he owned the property jointly with someone who is not his spouse/civil partner. The other options were incorrect because the related property rules do not apply in this case as the couple were not married. It is irrelevant whether the property was owned as joint tenants or tenants in common for these purposes.

Question 19

A testator died four months ago leaving a valid will appointing her brother as her sole executor and leaving her entire estate to her adult nephews. The testator was survived by her spouse and her nephews.
The testator’s brother predeceased her and left a will appointing an executor who took out the grant of probate in respect of the brother’s estate.
Which of the following most accurately states the grant required for the testator’s estate and who will apply?
Select one alternative:
* The spouse will apply for a grant of letters of administration with will annexed.
* Either nephew (only one PR is required) will apply for a grant of letters of administration with will annexed.
* The brother’s executor will apply for a grant of probate.
* Both nephews (two PRs are required) will apply for a grant of letters of administration with will annexed.
* The brother’s executor will apply for a grant of double probate.

Answer 19

• Either nephew (only one PR is required) will apply for a grant of letters of administration with will annexed.

The deceased left a valid will but the sole executor appointed under the will pre-deceased the testator the relevant grant is letters of administration with will annexed. The right to apply is determined by NCPR 20, under which those who have a beneficial entitlement under the will (here the nephews) have the best right to apply. The other options were incorrect because; i) the spouse was not a beneficiary of the will and has no right to apply, ii) there were no life or minor interests so only one PR was needed, iii) the chain of representation does not apply in this situation so the brother’s executor has no right to apply.

Question 20

A collection of rare books was owned by a woman. Ten years ago, when the collection was worth £9,000, she gave one third of the collection to her sister.
The woman’s sister has recently died leaving all of her assets to her nephew, including the share of the book collection the woman gifted to her. Inheritance tax will be payable on the sister’s estate.
The value of the sister’s share of the collection when she died was £2,000. The market value of the whole collection was £12,000.
What is the value of the sister’s share of the book collection for inheritance tax purposes?
Select one alternative:
* £0
* £3,000
* £6,000
* £2,000
* £4,000

Answer 20

£2,000

The related property rules do not apply in this scenario because the woman and her sister were not married or in a civil partnership. The market value of the 1/3 share owned by the sister on the date she died is the correct value for inheritance tax purposes. The other options were incorrect because they: i) applied the related property rules ii) considered the gift from the perspective of the donor not the donee or iii) considered the value at the date of the gift not the date of death.

Question 21

Five years ago your client made a will that contained pecuniary legacies to friends and family with the residue of the estate left to their spouse. By the will your client also appointed their spouse to be the sole executor of their estate. Confirmation of your client’s divorce was received yesterday.

Which one of the following statements is correct?

Select one alternative:

Your client’s will is not revoked, but the gift of residue and executor appointment clause both fail. The legacies to friends and family will take effect.

Your client’s will is not revoked, but the gift of residue fails. The executor appointment clause and the legacies to friends and family will take effect.

Your client’s will is not revoked and all of its terms will take effect.

Your client’s will is not revoked, but the executor appointment clause will fail. The gift of residue and the legacies to friends and family will take effect.

Your client’s will is revoked and none of its terms will take effect.

Answer 21

Your client’s will is not revoked, but the gift of residue and executor appointment clause both fail. The legacies to friends and family will take effect.

The effect of the divorce is to treat the spouse as having predeceased the testator, meaning the appointment of the spouse as executor is ineffective and any legacies to the spouse will fail.

Question 22

A testator leaves a legacy of “my Bernstein piano and my Boots plc shares” in his validly executed will to his nephew. At the time the will is executed, he has 50 Boots Plc shares. After the will is executed, the piano is sold and he purchases a Steinway piano with the sale proceeds and has cash left over of £5,000.

At the date of his death, the testator owns the Steinway piano and 100 Boots plc shares. What legacy does the nephew receive?

Select one alternative:

The Steinway piano and 100 Boots plc shares.

£5000 and 100 Boots plc shares.

The Steinway piano and 50 Boots plc shares.

100 Boots plc shares only.

The Bernstein piano and 50 Boots plc shares.

Answer 22

100 Boots plc shares only.

Question 23

F died in 2002 when the nil rate band was £250,000. He had used only half of his nil rate band.

His wife J died years later and when she died the nil rate band was £325,000. She had not made any lifetime transfers.

Ignoring any potential residential nil rate band, how much nil rate band is available to J’s death estate?

Select one alternative:

£650,000

£575,000

£487,500

£325,000

£450,000

Answer 23

£487,500

J has 100% of her own NRB which is increased by the unused percentage of F’s NRB. This gives J 150% of £325,000.

Question 24

A man died last month testate leaving his entire estate to a woman he was living with. The adult son of the man wishes to challenge the validity of the will on the basis of undue influence. The man’s son maintains that the woman encouraged the man to leave everything to her, to the exclusion of himself.

Which of the following statements best describes the advice that you would give the son?

Select one alternative:

There is a presumption of undue influence in relation to testamentary dispositions. The burden of proof lies with the son. What the woman did is not of itself likely to lead to a successful claim for undue influence.

There is no presumption of undue influence in relation to testamentary dispositions. The burden of proof lies with the son. What the woman did is not of itself likely to lead to a successful claim for undue influence.

There is no presumption of undue influence in relation to testamentary dispositions. The burden of proof lies with the woman. What the woman did is not of itself likely to lead to a successful claim for undue influence.

There is a presumption of undue influence in relation to testamentary dispositions. The burden of proof lies with the woman. What the woman did is of itself likely to lead to a successful claim for undue influence.

There is no presumption of undue influence in relation to testamentary dispositions. The burden of proof lies with the son. What the woman did is of itself likely to lead to a successful claim for undue influence.

Answer 24

• There is no presumption of undue influence in relation to testamentary dispositions. The burden of proof lies with the son. What the woman did is not of itself likely to lead to a successful claim for undue influence.

Encouraging is not the same as coercing.

Question 25

A man attends a meeting with his lawyer to discuss making a new will. During the meeting the man produces a photocopy of the will he has made previously and writes “cancelled” on the front page. He then hands his lawyer the copy and says “I want to cancel this will”. The man takes no other action with regards this previous will.

The man subsequently executes a new will which contains the words: “This is the last will and testament of [the man]”.

Assuming there are no other relevant provisions in the new will, which of the following is correct?

Select one alternative:

The man did not revoke his previous will because he wrote “cancelled” on a copy rather than the original. The earlier will takes priority if there is a discrepancy between the two.

The man did not revoke his previous will because it was not destroyed by him and there are no express words of revocation in the new will. The later will takes priority if there is a discrepancy between the two.

The man revoked his previous will when he executed his new will because the new will contains words which indicate the later will should supersede any earlier will.

It is not clear whether the man’s previous will was revoked or not. However, if the client does now have two valid wills, the later will takes priority if there is any discrepancy between the two.

The man revoked his previous will by writing “cancelled” on the photocopy and stating expressly that he wanted to cancel the will. These actions demonstrate the required intention to revoke.

Answer 25

• The man did not revoke his previous will because it was not destroyed by him and there are no express words of revocation in the new will. The later will takes priority if there is a discrepancy between the two.

Writing “cancelled” is insufficient to revoke a will. The original will needed to be destroyed or expressly revoked in a new will/codicil.

Question 26

Your client wants to make a will leaving the whole of their estate equally between their two children.

Your client is 93 and living in a hospice where they will require medical care, including the administration of strong pain killers, for the remainder of their life. Your client tells you they feel fine when you visit to take instructions but the client’s daughter tells you that this morning your client did not recognise her.

Which of the following best describes the steps you should follow?

Select one alternative:

There are grounds to doubt your client’s testamentary capacity and therefore a medical professional should be instructed to confirm whether the test in Banks v Goodfellow is satisfied.

There are grounds to doubt your client’s mental capacity and therefore a medical professional should be instructed to confirm whether the test in the Mental Capacity Act 2005 is satisfied.

There are grounds to doubt your client’s testatmentary capacity and therefore a medical professional should be instructed to confirm whether the test in Parker v Felgate is satisfied.

As your client’s instructions are rational and your client has expressly confirmed to you they are fine, no formal assessment of capacity is required.

As your client’s instructions are rational, no formal assessment of capacity is required provided a detailed file note is made.

Answer 26

• There are grounds to doubt your client’s testamentary capacity and therefore a medical professional should be instructed to confirm whether the test in Banks v Goodfellow is satisfied.

The facts suggest the potential for a lack of capacity given the age, medication and indication they didn’t recognize the daughter. Medical advice should be sought and the correct test is Banks v Goodfellow.

Question 27

7
A testator’s will leaves legacies of £2,000 to his son and £1,000 to his brother. The son has predeceased the testator leaving two children and the brother has predeceased leaving a son. The will contained no provisions regarding substitutions.

Which of the following is correct?

Select one alternative:

The testator’s grandchildren each receive £1,000 and the nephew £1,000.

The testator’s grandchildren each receive £1,500.

Both legacies are distributed under the testator’s residuary estate.

The testator’s grandchildren each receive £1,000 and the brother’s legacy of £1,000 passes into the testator’s residuary estate.

£2,000 passes into the testator’s residuary estate and the nephew receives £1,000.

Answer 27

The testator’s grandchildren each receive £1,000 and the brother’s legacy of £1,000 passes into the testator’s residuary estate.

S 33 wills Act 1837 applies so that the issue of the son take the share their parent would have taken. S 33 does not apply to the brother’s legacy.

Question 28

On 14th August 2022, S gives £3,000 to D. On 15th August 2022, S gives £250 to E. On 1 September 2022, S gives £250 to each of E, F and G.

S had used their 21-22 annual exemption.

Which of the gifts are chargeable?

Select one alternative:

£500 to E

None

£3,000 to D and £500 to E

£3,000 to D and £250 to E

£250 to E

Answer 28

• £500 to E

Both gifts to E are chargeable. The annual exemption applies to the gift to D. The small gifts exemption apply to the gifts to F and G.

Question 29

A man has made no previous gifts and wishes to benefit his daughter who is about to be married. He wishes to gift to his daughter as much as possible without a potential liability to Inheritance Tax should he die within seven years.

Ignoring the family maintenance exemption and normal expenditure out of income, what is the maximum amount of cash the man can gift to his daughter without a potential liability to inheritance tax?

Select one alternative:

£511,000

£336,000

£325,000

£330,000

£333,000

Answer 29

• £336,000

Nil rate band plus marriage and annual exemptions!!!!!!!

Question 30

A man died recently leaving his estate equally between his children and grandchildren.

Two years ago, the testator’s son (then 21) went travelling and none of the family has seen him since. Despite extensive effort the testator’s other children, who are the man’s personal representatives (‘PRs’), have not been able to trace the son.

Three months ago the PRs placed advertisements complying with s 27 Trustee Act 1925. Neither the son nor anyone claiming to be entitled to a share of the estate has responded to the notice. The PRs propose to distribute the estate and pay only the beneficiaries they know about and can locate.

Which of the following best describes the protection afforded to the PRs as a result of these steps?

Select one alternative:

They will be protected from all claims.

They will be protected from claims by unknown beneficiaries and the son in their capacity as PR but not in their capacity as estate beneficiaries.

They will not be protected from claims by unknown beneficiaries, but will be protected from claims by the son.

They will be protected from claims by unknown beneficiaries in their capacity as PR but not in their capacity as estate beneficiaries. They are not protected from a claim by the son.

They will not be protected from claims by either unknown beneficiaries or the son.

Answer 30

They will be protected from claims by unknown beneficiaries in their capacity as PR but not in their capacity as estate beneficiaries. They are not protected from a claim by the son.

S 27 Trustee Act 1925 only provides protection against unknown beneficiaries, not missing beneficiaries. The protection is for the PRs only. If an unknown or missing beneficiary re-emerges, they can make a claim against other estate beneficiaries who have received more than they are entitled to from the estate.

Question 31

A valid will contains the following clause: “I give £40,000 to my sister”.

The amount of “£40,000” has been crossed through by hand, although the original figures remain visible.

Which of the following best describes the effect of the alteration to the will?

Select one alternative:

The sister will receive £40,000. The alteration is not effective as the original amount can be seen by natural means.

The sister will not receive anything. The alteration is effective because it is clear the testator intended to delete the gift.

The sister may receive £40,000. The alteration will not be effective if there is another copy of the will showing the original gift unamended.

The sister will not receive anything. The alteration is effective because it is presumed to have to have been made before the will was executed.

The sister may receive £40,000. The alteration will be effective as long as it can be proved that it was made by the testator, not a third party.

Answer 31

• The sister will receive £40,000. The alteration is not effective as the original amount can be seen by natural means.

There is a rebuttable presumption that the alteration was made after execution. It has not been attested so it is invalid.

Question 32

A man prepares his will and signs it in the presence of a witness. A second witness then arrives and the man informally acknowledges his signature while asking the second witness to sign the will. The first witness then moves to the other side of the room as the second witness signs, although she does ask whether the will would be invalid. The will contains an attestation clause.

Which of the following statements best describes the position regarding the validity of the will?

Select one alternative:

The will has not been validly executed as the parties are not all present during the execution at the same time.

The will has not been validly executed as the second witness was not present when the testator signed the will.

The will has been validly executed and the attestation clause raises a presumption of due execution.

The will has not been validly executed as the testator should have signed the will in the presence of the witnesses.

The will has been validly executed although the Probate Registry would ask for an affidavit of plight and condition of the will.

Answer 32

The will has been validly executed and the attestation clause raises a presumption of due execution

The requirements of s 9 Wills Act 1837 have been complied with. The attestation clause raises the presumption of due execution.

Question 33

You have recently prepared a will for a client who is ill in hospital and now wants to execute their will. You are confident your client has testamentary capacity, however, they are physically unable to hold a pen and cannot sign the will in person.

Which of the following is the best advice?

Select one alternative:

The client may direct someone to sign the will on their behalf in accordance with s 9 Wills Act 1837. However, unless the attestation clause is amended to demonstrate the correct process was followed the will would be invalid.

The client may direct someone to sign the will on their behalf in accordance with s 9 Wills Act 1837. However, the attestation clause cannot be used as evidence of the client’s knowledge and approval unless an affidavit of due execution is signed by the witnesses.

To comply with s 9 Wills Act 1837 the client must sign their own will and this can be satisfied by the client making any ‘mark’, even if it is not their usual signature.

The client may direct someone to sign the will on their behalf in accordance with s 9 Wills Act 1837. Provided the attestation clause is amended to demonstrate the correct process was followed, the client’s knowledge and approval of the will can be presumed.

To comply with s 9 Wills Act 1837 the client must sign their own will with their usual signature.

Answer 33

The client may direct someone to sign the will on their behalf in accordance with s 9 Wills Act 1837. Provided the attestation clause is amended to demonstrate the correct process was followed, the client’s knowledge and approval of the will can be presumed.

A client who cannot physically execute a will may direct someone to sign it on their behalf but it is necessary to amend the attestation clause to show that this procedure was followed.

Question 34

Under the terms of an unmarried testator’s will the whole of their estate is given to their only child. When the testator was clearing out their office their will was accidentally shredded.

Which of the following most accurately explains whether the testator’s will is still valid?

Select one alternative:

The will is still valid because although the will was destroyed there was no intention to destroy it.

The will is not valid because the will must be read as a whole and this is no longer possible.

The will is still valid because the testator’s child is the sole beneficiary of the will and would inherit under intestacy in any event.

The will is still valid because the doctrine of dependent relative revocation will apply.

The will is still valid because a will must be revoked by a revocation clause in a new will that is executed in accordance with s.9 Wills Act 1837.

Answer 34

• The will is still valid because although the will was destroyed there was no intention to destroy it.

Destruction is not sufficient to revoke a will, unless accompanied by an intention to revoke.

Question 35

A man executed a will five years ago. One of the gifts in the will leaves the man’s brother a cash legacy of £1,000. The man’s brother was a witness to the will.

Last month the man executed a codicil to the will which changed the amount of the cash legacy to his brother to £500. Two of the man’s work colleagues witnessed the codicil. Neither of them is a beneficiary of the will or codicil.

Which of the following statements provides the best advice to the man?

Select one alternative:

The codicil is treated as having been executed on same date as the will. The brother will receive £500.

The codicil is treated as having been executed on same date as the will. The brother will receive £1,000.

The codicil is treated as having been executed on same date as the will. The brother will receive nothing as he was a witness to the will.

The effect of the codicil is to re-publish the will at the date that the codicil was executed. The brother will receive £1,500.

The effect of the codicil is to re-publish the will at the date that the codicil was executed. The brother will receive £500.

Answer 35

The effect of the codicil is to re-publish the will at the date that the codicil was executed. The brother will receive £500.

The codicil re-publishes the will to the date the codicil was executed. The amendment is effective and £500 will pass to the brother because the brother was not a witness to the codicil.

Question 36

A man died recently. He was a bachelor and left his entire estate to his nephew. He did not make any lifetime gifts. His estate comprised a house free of mortgage worth £670,000 and bank and building society accounts with balances amounting to £225,000. The man’s debts and funeral expenses amounted to £10,000.

How much inheritance tax will be payable on the man’s estate?

Select one alternative:

£224,000

£151,600

£354,000

£84,000

£154,000

Answer 36

£224,000

The correct answer is £224,000. The man’s assets amount to £895,000. Deduct the £10,000 debts and funeral expenses to reach £885,000. The man had a full NRB of £325,000 available. The remaining £560,000 is taxed at the death rate of 40%.

Question 37

Four tax years ago, A made chargeable transfers that used up A’s entire nil rate band. Three tax years ago, A gave £4,000 to B. Later in the same tax year, A gave £8,000 to C.

A has just died. How much of the gift to C is chargeable to inheritance tax?
Select one alternative:

£8,000

£2,000

£5,000

£1,000

£0

Answer 37

The correct answer is £8,000. The full amount is chargeable to tax. The NRB was used in the previous year and the annual exemption was used on the gift to B.

Question 38

A testator executes a will containing a clause giving his ring to his nephew. After the will has been signed, the testator puts his pen down on the will and some ink leaks out onto the document and obliterates the gift of the ring.

Which of the following statements best describes the validity of the gift?

Select one alternative:

The nephew will not receive the ring as the gift has been revoked by the obliteration.

The nephew will only be entitled to the ring if he can submit an affidavit of due execution of the will.

The nephew will not receive the ring as the obliteration should have been initialled by the testator and the witnesses.

The nephew will not be entitled to the ring as the alteration was made after the will was executed.

The nephew will be entitled to the ring if extrinsic evidence can be obtained setting out the original clause in the will.

Answer 38

The nephew will be entitled to the ring if extrinsic evidence can be obtained setting out the original clause in the will.

The correct answer is that the nephew will be entitled to the ring if extrinsic evidence can be obtained setting out the original clause in the will. This is an obliteration without intention to revoke.

Question 39

Which of the following is most accurate with regards your liability?
Select one alternative:
* If the client did not sign their will before their death, although regrettable, this would not give rise to any liability on your behalf.
* If the will was validly executed but it turns out that you failed to include a gift to one of the beneficiaries in accordance with the client’s instructions, you would not be liable for this mistake as there is no element of dishonesty.
* If the will was validly executed but it turns out that you failed to include a gift to one of the beneficiaries in accordance with the client’s instructions, you would not be liable for this mistake because the client (to whom you owe a duty of due diligence) has now died.
* If the will was validly executed but one of the witnesses was a beneficiary, you may be liable for failing to provide adequate instructions to the client.
* If the will was validly executed but it turns out that you failed to include a gift to one of the beneficiaries in accordance with the client’s instructions, you would not be liable for this mistake as the client approved the draft and should have noticed this themselves.

Answer 39

If the will was validly executed but one of the witnesses was a beneficiary, you may be liable for failing to provide adequate instructions to the client.

The correct answer is that if the will was validly executed but one of the witnesses was a beneficiary, you may be liable for failing to provide adequate instructions to the client. A solicitor has a duty to prepare a will in accordance with their instructions and to properly advise the client on execution. They may be liable after the client’s death to an estate beneficiary who suffers loss as a result.

Question 40

On 1 October 2020, A makes gifts to B using the annual exemptions. On 2 October 2020 A makes a further gift to B of £455,000. A dies within 3 years of this gift.

What is the amount of tax payable on the gift as a result of A’s death?

Select one alternative:

£41,600

£26,000

£0

£52,000

£182,000

Answer 40

£52,000

The correct answer is £52,000. The gift to B is a PET. As A died within seven years of making the PET it becomes chargeable. A has a full NRB of £325,000 available. The remaining £130,000 is taxed at the death rate of 40%. No taper relief is available.