One of the most valuable reliefs from Inheritance Tax (IHT) is Business Property Relief (BPR), which allows the transfer of qualifying business property from the deceased's estate at a nil value for IHT purposes.

The rules on what constitutes business property are many and complex and the principal exclusion from availability for BPR is where a business is an investment business – or put precisely, where its activities 'consist wholly or mainly of dealing in securities, stocks or shares, land or buildings or making or holding investments'.

One big area of contention is that of furnished holiday lettings, which can qualify for favourable treatment with regard to other taxes. However, HM Revenue and Customs see holiday lettings as easy pickings for IHT purposes and will routinely claim that they are investments in land, rather than businesses per se.

By and large, HMRC have been successful with this argument, but not always. The key to the decision will lie in the level of services that are provided with the letting. In a recent case in which the guests were provided with several services, including a pool and sauna, the Upper Tribunal agreed that it was a business.

A number of similar cases are pending and it will be interesting to see just how close to operating as a hotel (albeit one with weekly lets) the business must be to qualify for BPR.

Watch this space.

For help and advice please contact Lucy Bluck, l.bluck@sydneymitchell.co.uk  on 0808 166 5638.

The law that allows someone who was dependent on a deceased person during their lifetime to make a claim against their estate if there is no, or inadequate, provision for them in the will is one of long standing (the Inheritance (Provision for Family and Dependants) Act 1975). However, many people think it applies only to blood relatives.

That this assumption is incorrect was emphatically confirmed in a recent case in which a 70-year-old woman was awarded £325,000 from the estate of a man with whom she had had a relationship lasting more than 20 years, the last seven of which they had spent together in the man's home, which was the principal asset of the estate.

His will left his £1 million estate entirely to his two daughters, both of whom are comfortably off. When his former partner made a claim under the Act, they opposed it, contending that the relationship was not one of permanence and substance.

The judge concluded that the man had clearly had a responsibility to his partner and made the award.

The case raises the following points. The first is that if you are in a similar situation and wish to leave your assets in a particular way, that can normally be achieved, but success may depend on making arrangements well before your demise. Secondly, if you are in a situation in which appropriate provision has not been made for you, a well-founded and well-argued challenge to a will that cuts you out may produce success.

For help and advice please contact Hayley-Jo, h.lockley@sydneymitchell.co.uk on 0808 166 5638.

Moving around the globe to where the work is has become a way of life for many, but often begs the question where, if anywhere, a person has settled. A family judge was faced with just that issue in deciding whether a couple’s divorce should go ahead in England or in New Zealand.

The couple were born and brought up in New Zealand and there was no dispute that they were domiciled there. The husband’s work as an economist had over the years taken him and his family to numerous different countries, including England. After the marriage began to fail, the wife moved to this country and he joined her here during an attempt at reconciliation.

She ultimately petitioned for divorce in England, shortly before he launched parallel proceedings to dissolve the marriage in New Zealand. He applied to stay the English proceedings on the basis that the English courts had no jurisdiction to hear the wife’s petition and that the appropriate forum for the divorce was New Zealand.

In dismissing that application, however, the judge noted that, due to their peripatetic lifestyle, the couple had not spent much time in New Zealand for 23 years before the marriage broke down. The wife had been living in England, where she had many family and friends, for two and a half years before lodging her petition and was plainly intent on settling permanently in this country.

She wished to be close to the couple’s three children, all of whom seemed to have chosen to make their lives in the northern hemisphere. Whilst it was unclear whether the husband intended to settle in England, he had moved here indefinitely and had taken a job here. Requiring the wife – who was in remission from breast cancer – to litigate in New Zealand was also likely to be burdensome upon her.

The Court noted that both husband and wife wished to divorce in the jurisdiction that they perceived would be most advantageous to them financially. However, in all the circumstances, the balance of fairness and convenience clearly came down in favour of the wife’s petition proceeding in England.

Contact Karen Moores, Partner for help and advice on 0808 166 5368 or email: k.moores@sydneymitchell.co.uk

A holiday should be a time for rest and recovery. There is nothing worse than being injured on holiday, but if this has happened to you, you need the right specialist to help you. Mike Sutton of Sydney Mitchell LLP discusses how he can help you to recover compensation for your pain, suffering and expenses.

Holiday accidents don’t just include accidents in a hotel, but cover injuries on boats or cruises, in a plane, traveling in cars or rental vehicles, even the beach.  The causes of a holiday accident could include:

  • Wet flooring or misplaced objects causing a slip or trip accident
  • Injuries which occurred on foreign transport
  • An injury that happened when on a day excursion
  • Food poisoning from the hotel restaurant/ buffet
  • Illness resulting from bad hotel hygiene
  • Problems with your rental car that lead to a holiday accident
  • Water sports accidents
  • Skiing accidents

Report the Incident

Where possible, you should also try to ensure that details are recorded in any available accident book and reported to your travel representative.

If appropriate, also report the accident to the hotel and ask that they keep a written record of the event and provide you with a copy of the same.

Keep a Record

It is important to record as much detail as possible. This could include witness information and photographs.

Seek medical assistance as a matter of urgency.   In certain countries, it is a requirement that you seek medical assistance within a very short period of time after the accident in order to maintain your right to pursue a claim for damages. As such, if you have suffered injuries as a result of an accident that occurred in a foreign country, you should seek medical attention as soon as you realise that you have been injured to prevent any suggestion that the injuries could have been suffered in a different location.

Obtain Specialist Advice

As with any personal injury claim, the advice and assistance of a specialist is invaluable.  They can collate all of the relevant information, provide guidance on the injury claim process and negotiate a suitable settlement with the third party insurers.

In every case, medical evidence will be required, and it is necessary to show that the person you are making a claim against owed you a duty of care, that they breached that duty of care (were negligent), and that the injury you sustained was a reasonably foreseeable consequence of that negligence.

Please contact Mike Sutton or one of our specialist Personal Injury Specialists at Sydney Mitchell on 0808 166 8827 or via email to pi@sydneymitchell.co.uk.

Employers generally bear legal responsibility for the misdeeds of their employees under the principle of vicarious liability – but what about independent contractors? The Court of Appeal has recently tackled that thorny issue and the result is likely to have an impact on many businesses.

The case concerned 126 women who applied for jobs with a high street bank and were required to undergo pre-employment health examinations by a GP. The women claimed that the doctor took the opportunity to sexually assault them. After solicitors launched proceedings on their behalf, a judge found that it would be fair, just and reasonable for the bank to hold vicarious liability for the doctor’s actions.

In challenging that ruling, the bank – which neither admitted nor denied that the sexual assaults occurred – argued that the GP was neither its employee nor was their relationship akin to employment. He was self-employed and had been engaged as an independent contractor. It was submitted that it was preferable to have a bright line test and that the imposition of vicarious liability should not be extended beyond relationships that are, or are close to, employment.

In ruling on the matter, the Court noted that use of independent contractors is increasingly prevalent in the modern economy. They often perform operations intrinsic to business enterprises over long periods and are subject to precise obligations and high levels of control. Depending on the particular facts of a case, vicarious liability could thus be extended to such a relationship.

In the particular case, the GP was deceased and his estate had been distributed. The bank was thus clearly in a better position to satisfy the women’s claims if they succeeded. He had examined the women on the bank’s behalf and, although they might have had the benefit of being alerted to health problems, the principal benefit was clearly to the bank as their prospective employer.

In dismissing the appeal, the Court noted that the examinations were part of the business activity of the bank and that the risk of wrongdoing had arisen from the bank’s engagement of the GP to perform them. He was paid a fixed fee for each examination and the level of the bank’s control over him was sufficiently high to make the bank vicariously liable for his actions. The Court’s ruling opened the way for the women to pursue their damages claims to trial.

For help on this or other employment law matters, call Dean Parnell on 0808 166 8827 or email: d.parnell@sydneymitchell.co.uk or Samantha Glynn s.glynn@sydneymitchell.co.uk

Home-made wills and shop bought ‘will packs’ that are filled in without legal advice are an invitation for dispute between your loved ones after you are gone warns Hayley-Jo Lockley, Contentious Probate Solicitor at Sydney Mitchell LLP. The point was powerfully made by a Court of Appeal case in which two home-made wills, signed by a retired postman, created a dispute that drove his family apart.

In 1998, shortly after marrying his much younger second wife, the man made a will by which he left her the entirety of his estate, which was worth about £600,000. In 2012, a few months before his death, aged 74, he made a second will by which he left legacies of £15,000 each to his wife and a grandchild and the remainder of his estate to his oldest son by his first marriage.

Neither will was professionally drafted nor had the deceased received advice in relation to the contents and consequences of the terms of the wills. 

A judge found that both documents were invalid and the man was therefore deemed to have died intestate. The judge was unable to find that the 2012 will had been properly witnessed or that the man knew and approved its contents. The 1998 will, which had been completed on a pre-printed will form, included the details of two witnesses, but their names had been written in block capitals and therefore did not conform to the rules set down in legislation.

The widow appealed the decision of the judge.  In upholding the widow’s appeal against that ruling, the Court noted that the will form did not provide a specific space in which the witnesses could sign their names. However, on the evidence, it was clear that they had attended the man’s home in order to witness his will and were present when he signed it. They had appended their names as witnesses, with the intention of attesting the will, and it did not matter that they had done so in capitals, rather than ‘signing’ the document in the usual modern sense of that word. The 1998 will was therefore held as valid.

When considering preparing a new will or amending the terms of an existing will it is always better to speak to a professional who can advise and guide you through the process.

For help and advice on Contentious Probate matters call Hayley-Jo Lockley on 0808 166 8860 or email h.lockley@sydneymitchell.co.uk

Going abroad on holiday or to live is becoming a common occurrence for many children. Parents may be offered positions abroad, either for a specific time or with endless possibilities of a permanent move. Likewise, grandparents may have chosen to move to a warm climate with a more relaxed way of life and promises of frequent long holidays for their family.

Although these changes can be viewed with a mixture of excitement and fear, if both parents agree, then their children can explore new vistas.

However, if the parents are no longer residing together there are many issues which may arise that need to be addressed. Karen Moores, family law solicitor explains the legal implications of taking your children abroad if you are divorced or separated.

Taking a child on holiday

The necessity to obtain permission to take a child out of the UK is not commonly known. It often depends on what Children Act Orders have been made, if any, and applies whether it is a day trip to France, a fortnight to Florida or the whole of the school holidays with relatives in Pakistan.

Consideration should first of all be given as to who has parental responsibility. If both parents have parental responsibility and there are no Child Arrangement orders (residence orders) or other restrictions in place, then neither can take the child on holiday outside the United Kingdom without the written consent of the other parent or any other party with parental responsibility. If consent is refused, an application to the Court will need to be made for permission.

The situation is different where one parent has a Child Arrangement Order. A person with a Child Arrangement Order (Residence Order) can take a child abroad for up to a month without the written consent of the other parent. However, it is good parenting to endeavour to agree the arrangements in advance; if consent is unreasonably withheld then an application may be made to the Court.

If the mother alone has parental responsibility and there are no child arrangement orders concerning the child, permission is not strictly needed by her to take a child abroad on holiday. However, again it is responsible parenting to consult and reach agreement with the other parent. Of course this does not stop a father without parental responsibility applying for parental responsibility and then objecting to the temporary removal of the child.

In almost all cases it is best to agree holiday or similar arrangements in advance to avoid misunderstandings, problems with contact, accusations of abduction and other applications to the Court. In the normal course of events permission for a child to go abroad is invariably given by a Court. Often details are required stating where the child will be staying, giving the date of departure, return and details of flights along with contact telephone numbers. If however there are suspicions that the child will not be returned, especially if the child is going to a non Hague Convention Country, then security will be necessary.

If grandparents and other family members want to take a child abroad, permission will be needed from both parents with parental responsibility and not just from one parent.

All of these issues may be dealt with at the local Court, however, if the approved holiday requires consideration of the law and procedures in foreign countries, then a Judge of the High Court may deal with such applications as consideration will need to be given with regard to putting in place specific orders. This may include mirror orders, notarised agreements and significant sums of money placed in a bond to be released upon the child's return. There have also been cases where family members, not just the person taking the child abroad, have been required to enter into a solemn declaration guaranteeing the safe return of the child.

The Court would also look at the risk of non return along with the magnitude of the impact on the child of any non return. It is therefore evident from previous Judge's decisions that they take account of each individual circumstance, the age of the child and detailed protective steps if there is a significant fear of non return after a trip abroad.

For further information and questions on taking your child/children abroad, contact us today.

Concerns of abduction

It is not unusual, particularly in families with international connections, for either parent to be anxious that the child will not be returned. These doubts may arise prior to the child leaving on holiday or indeed where the parent and child are returned late after a contact visit or if it has been difficult to get in touch with the other parent at any stage. If there is an immediate risk, port alert will be required. If there is time to secure an application to the Court for an order prohibiting the removal of the child from the jurisdiction without notice being given to the other parent, this should be done quickly as it can be crucially important to prevent the child leaving the UK. Any delay in an application can result in the child being taken out of the jurisdiction and may then result in great difficulty in locating the child and securing their return.

Nevertheless, if it is known that the child has been taken to a Country within the European Union there are considerable resources and facilities in place to track and locate a child in the hope of securing a return before departure to the rest of the world.

Abduction is known as a failure to return a child after an agreed period abroad. As stated above there are protective steps which can be taken if there is a fear of a non return after a trip abroad and legal advice should always be sought promptly to address anxiety about any concerns of an abduction. Information such as names, addresses, photographs and descriptions of people and places where it is likely that the child could be taken should be gathered as soon as possible. Clearly, this evidence may only be available if there is a reason to suspect that the child is being taken to other family members or friends who reside abroad.

If you have any concerns about abduction and need some legal advice on the issue, contact our family team.

Relocating abroad

A parent needs the permission of the other parent or a Court Order to take a child permanently abroad. This is known as a relocation application or leave to remove.

In some cases it is appropriate to oppose the relocation application but in others it may be wise to consider putting energies into legal representation to ensuring very good future contact before the relocation proceeds. If there are well thought out plans, with good reasons given to the Court for relocation, they will generally allow relocation. This however, does not mean that a parent opposing relocation of their child should immediately give up.

When considering opposing relocation applications it is essential to consider all aspects of a child's life. The Court will hear evidence as to the child's educational progress, family and support network, activities that they are involved in along with the impact of losing contact with the wider family. Consideration will also be given by the Court as to what more could the one parent offer the child if they continue to reside in this jurisdiction. If the child is to remain in Europe where the country has signed up to the appropriate conventions, there will be certain protection and enforceability of orders for contact. Even if a child has been permitted to go abroad, certain safeguards can be put in place to ensure that good contact continues. This may include extended staying contact during the school holidays and consideration as to travel arrangements, the use of emails and web cams.

Enforcement is another important issue that is required to be looked at before a child leaves the jurisdiction as often if there is a breach of an agreement or an Order these may have no validity abroad and may therefore not be relied upon. Therefore notarised agreements, mirror orders, bonds, religious oaths and other safeguards to ensure compliance with arrangements should be considered. Contact Orders made in England may not automatically be recognised or may require separate Court procedures and all of this must be done before departure.

A mirror order is an order made in the courts of the country of relocation.  This is identical to the order made before the UK courts. Therefore the advantage for the left behind parent is that because the order becomes an order of the foreign state, local enforcement is available.

There are therefore many issues that have to be considered as far in advance as possible. Legal advice from a Solicitor, preferably who has experience in such matters, should be taken so that due consideration may be given to all the possibilities that may arise and precautionary measures put in place.

Many children go abroad on holiday to visit family and friends or indeed to emigrate and it is a positive experience for them. Ultimately wherever the children is residing, it is usually in the best interests of that child to have regular, quality and contact with both parents. If this is an issue that you require further assistance or advice on please contact us today.

The vast majority of the public will not be aware of the impending reforms set out by the Government in respect of an increase to the Small claims limit for claims involving road traffic accidents.  This reform raises the threshold of claims to £5000 from £1000 in addition to the introduction of a tariff system, which will see the vast majority of claims falling under this new procedure.  As a result, most claimants will not be able to access legal representation as costs cannot be recovered in the small claims court.

There will no doubt be a restriction of access to justice for the injured, as members of the public will not have the benefit of skilled, independent legal advice to circumnavigate not only the rules, but also see the correct level of compensation / damages.  They will also be faced with the googly of a well-funded insurer, who will have a legal outfield who will put out a very strong field.

We fear this will result in an uneven playing field and that is ‘just not cricket’.

In the event that you have been bowled out in a road traffic accident, when it was not your fault, please contact David Lydon at Sydney Mitchell Solicitors who will come out to bat on your side!

David Lydon 0808 166 8974 Email: d.lydon@sydneymitchell.co.uk

Lucy Bluck, a member of Solicitors for the Elderly at leading West Midlands’ law firm Sydney Mitchell comments on the findings of a new report produced by SFE (Solicitors for the Elderly) and an independent think tank, Centre for Future Studies.  The report states that UK residents are leaving medical and care decisions to chance. The report looks at the ever-increasing number of people living with dementia which, combined with the failure to plan ahead for mental incapacity, exposes a looming crisis.  The study found that:

  • 98% of people in the West Midlands leave important health and welfare decisions to chance
  • By 2025, it is estimated that more than 13 million people who are at risk of mental incapacity will not have put safeguards in place appointing someone to assist with or make decisions on their behalf
  • 71% would like a family member to be able make medical and care decisions on their behalf in the event that they were unable to make such decisions themselves
  • 81% have not  discussed their preferences for end of life medical treatment and care wishes
  • 36% admit to having made no provisions at all, such as a will, LPA, pension or funeral plan
  • A staggering 70% of people incorrectly believe that their ‘next of kin’ will be able to make medical and care decisions if they are no longer able to .Without the necessary provisions in place, potential life-changing medical and care decisions can be taken away from loved ones
  • 80% of those questioned in the West Midlands are worried about becoming mentally incapacitated and losing the ability to make decisions for themselves
  • 60% believe that being on the NHS organ donor register ensures that organs are automatically donated following their death; however this is not the case
  • Only 2% of those surveyed in the West Midlands by SFE have a health and welfare LPA in place

Coalition of partners join forces to warn of ‘incapacity crisis’ led by SFE, including Baroness Ilora Finlay, Alzheimer’s Society, Dying Matters, Age UK, Anchor, and SOLLA

What is a Lasting Power of Attorney (LPA)?

An LPA is a powerful legal document, which allows a person (or ‘donor’) to choose one or more individuals (known as attorneys) to handle their affairs in the event that they are no longer able to do so themselves, for example if they lose mental capacity. Attorneys are usually trusted family members or friends, but people can also select a legal professional as their attorney. 

An LPA can only be put in place while a person has the mental capacity to do so. It’s important to plan ahead and get your wishes down on paper as early as possible to ensure that whoever you choose to manage your affairs can retain control, should you lose capacity.

There are two types of LPA: a health and welfare LPA (H&W LPA), and a property and financial affairs LPA (P&F LPA). The former covers things like choices around care plans, medical treatment and end of life wishes.  The latter deals with the management of property, other assets, bank accounts and bill payments.

There are currently 928,000 Health and Welfare LPAs registered with the Office of the Public Guardian (OPG) across England and Wales, compared to the 12.8 million people over the age of 65 who run the risk of developing dementia – a difference of nearly 93%.

The forecast shows the disparity will continue, leaving millions in limbo. By 2025, it’s calculated that 15.2 million people will be at risk of mental incapacity and it’s estimated that 2.2 million health and welfare LPAs will be in place. 

SFE is urging the nation to act now to avoid this incapacity crisis by planning ahead in case of mental incapacity.

It is crucial to have a conversation with loved ones in order to make your specific medical and care wishes known – such as, where you are cared for, whether you wish to be an organ donor and whether or not you would want to be resuscitated in certain situations– otherwise your preferences can not be taken into account.

The campaign calls on people to act now and start a conversation with loved ones about end of life topics to remove the stigma surrounding the discussion and then prepare a Lasting Power of Attorney giving the people you have chosen the power to make those decisions

Lakshmi Turner, Chief Executive of SFE, said:

“Most of us do not like thinking about, let alone talking about, death, disability or disease, despite the fact that it touches all our lives – but it is essential that we do so.

“Whilst it’s great that more and more of us are putting wills in place and establishing plans for finances and assets, far too few of us are planning ahead for our health and care needs and wishes, leaving this to chance.

“It’s time to set the record straight. Planning ahead by talking to family or friends shouldn’t be seen as doom and gloom; it’s about having a positive conversation about welfare, empowering your loved ones and making the decision-making process easier for everyone.”

Jeremy Hughes CBE, Chief Executive of Alzheimer's Society

“We welcome this initiative. Lasting powers of attorney for health and welfare too often get overlooked.

“People with dementia have the right to make choices about their care, just like anyone else. Making someone they trust their attorney for health and welfare is one of the ways people can do this. A health and welfare LPA provides reassurance to them and the act of creating one can start useful conversations about the future with family and friends.”

For help or advice on this or other private client matters, please speak to Lucy Bluck l.bluck@sydneymitchell.co.uk 0808 166 8860

“In life we should expect the unexpected but the outcome is not always as we imagine”

They say safety is a choice we all make…what utter nonsense!!  Sometimes that choice is taken away from us, when things occur beyond our control. The consequences can be far reaching.

Imagine for a moment, walking down a street, having undertaken a pilgrimage to your favourite coffee house to purchase a latte and spending your precious time doing whatever you want or need to do, whilst subconsciously avoiding the everyday hazards which present themselves in our busy lives.

Suddenly you are struck from an object falling from a building causing you to drop the precious latte, which in itself is a tragedy but also causes injury. 

The effect of such an incident can be far reaching not only in terms of caffeine withdrawal but also resulting in a potentially serious injury to you. The domino effect which occurs thereafter in terms of both your domestic and professional life can be quite far reaching and costly to both you and your family.

David Lydon, Personal Injury Specialist, Sydney Mitchell 0121 698 2200

Napoleon once said

There is no such thing as an accident, only a failure to recognise the hand of fate.

I disagree, whilst some would consider it fate, there will have been a reason for the object falling from the building. This may be as a result of a failure to properly secure the object or mere neglect on behalf of the owner but more importantly preventable.

Legal bit

There is a duty on an occupier, and sometimes an owner to keep premises adjoining the highway from falling into disrepair so as not to cause a public nuisance. It is said that a public nuisance arises from an act or omission that inflicts inconvenience on all members of a class that come within the sphere of its operation.

If you have been injured as a result of an accident which you could not avoid or even contemplate, please feel to contact us to discuss and deal with Napoleon’s premise in the same manner as Battle of Waterloo.

“Please note the author does not have a caffeine addiction.”

For help or advice on injuries as a result of falling objects or other personal injury matters, please speak to David Lydon on 0121 698 2200 or email d.lydon@sydneymitchell.co.uk

Pages

UK Top Tier Firm 2017 Lexcel Practice Management Standard Birmingham Law Firm of the Year for 2011 Resolution Collaborative Family Lawyer The Law Society Accredited in Family Law Conveyancing Quality Scheme

 

Subscribe to Personal Law Updates