Making a Will? Take Legal Advice to Avoid Family Conflict

In a case which underlines the reasons why you should always get a solicitor to help you make your will, the opinion of an experienced lawyer as to the mental capacity of an elderly dementia sufferer who sought his advice was the decisive factor in establishing that she knew her own mind. The woman was aged 85 when she made a new will in which she left her estate to her two sons in equal parts. In challenging the document’s validity following her death, one of her sons argued that she lacked the mental capacity to execute a valid will and had neither known nor approved of its contents. He…

Seventeen-Year Battle Over Assets Proves Ruinous

Divorces are very seldom totally amicable, but letting squabbles over the terms under which a marriage is dissolved run on and on can be ruinous, as a recent case shows. It involved a once successful businessman who was said to have been left with less than £5 in his bank account following 17 years of squabbling over money with his ex-wife. During their relatively brief marriage, the couple shared a £1.8 million home and had an affluent lifestyle. Their children were still at primary school when the marriage was dissolved, but are now in their twenties. The ex-wife claimed that her former husband still owed her more than £2 million…

Tenant Lives to Fight Again as Court Upholds Without Prejudice Plea

When a tenant admitted in discussions with her landlord’s lawyers that she had been in arrears with the lease payments on her restaurant, the admissions were used to justify a claim for forfeiture of the lease by her landlord. However, she claimed that the discussions were ‘without prejudice’ and could not therefore be used in court proceedings by the landlord. Without prejudice disclosures are legally ‘privileged’ and cannot normally be required to be disclosed in formal legal proceedings. Without prejudice discussions are often undertaken with a view to obtaining settlement of disputes and enable both sides to be more open and candid in discussions than they would be were everything…

Insufficient Disclosure Negates Challenge to Enquiry

It is generally considered that if HM Revenue and Customs (HMRC) raise no enquiries in relation to a tax return in the year following its submission, that is the end of the matter. However, as a recent tax dispute shows, where HMRC make a ‘discovery’, that is not the case. The dispute involved a wealthy taxpayer who claimed a loss for tax purposes in relation to a complex tax saving scheme involving derivatives contracts which were arranged to produce allowable losses for a trust. The scheme led to an enquiry from HMRC’s Special Compliance Office and Specialist Investigations. Nonetheless, when a challenge to the taxpayer’s tax return for 2003 was…

Have You Been Given Free Advice That Was Wrong?

Just because you haven’t paid for professional advice doesn’t mean that the person who gave it to you is relieved from liability if it was negligently given. A recent case should serve as a warning to anyone with professional skills who offers free advice to friends and others. It involved a couple who wished to have their garden landscaped. They asked a good friend, who is a professional designer, for advice and she recommended a contractor to carry out the earthworks. The general agreement was that when the major works were carried out their friend would provide some of her expertise on a fee-paying basis. However, the contractor’s work proved…

Dangers of Using Amateur Executors Exposed

A recent case clearly illustrates the inherent dangers of appointing amateur executors to administer your estate rather than qualified professionals. The executors were dealing with the estate of a deceased man and as part of their duties they filed a tax return which covered the period from 6 April 2012 until his death in October that year. They had inadvertently failed to include all of his taxable income on the return. They filed the return in August 2013 and a month later sent a cheque for £15,333 ‘in full and final settlement’ to HM Revenue and Customs (HMRC). Receiving no reply from HMRC, they completed the administration of the estate…

Children’s Views Given Greater Weight as Parental Control Wanes Over Time

When a marriage breaks up, the court’s primary consideration is the welfare of any children, and their views are of great importance when a decision is being made as to which parent they should live with. In law, a child is a person under the age of 18. Clearly, a more mature child is better able to make a reasoned decision in this regard than a young child, and the question of to what extent and how children’s views should be taken into account will shortly be the subject of recommendations from the Family Procedure Rule Committee – the body that makes the procedural rules for family cases heard in…

Weekend Cottage Tenant Sees Off £128,000 Insurance Claim

Anyone who lives in rented accommodation can breathe a sigh of relief after a tenant whose weekend cottage suffered severe flooding damage during a cold snap saw off a £128,000 demand from insurers. The High Court found that the woman was covered by her landlady’s insurance policy, having contributed to premiums through her rent. The woman rented the thatched cottage for £2,600 a month. She was not present when a water pipe burst during freezing weather. The landlady’s insurance company honoured her claim in respect of the damage but sought to recover its loss from the tenant on the basis that she had left the cottage’s central heating system turned…

Attorneys Who Denied Father Access to His Money Removed

The Court of Protection has come to the rescue of an elderly man who wished to have access to his own funds. The man, now aged 87, appointed his son and daughter to be his attorneys under an Enduring Power of Attorney (EPA) executed a few months after his wife died in 2007. He remarried in 2010 and a few months before that he gave his prospective future stepson £100,000. He later gave him an additional £5,000. When his son and daughter became concerned about some of his expenditure, they applied to register the EPA with the man’s approval and that of his wife. Under the law relating to EPAs…

Thinking About a Tax Avoidance Scheme? HMRC Issues New Guidance

HM Revenue and Customs (HMRC) are well known for their robust attitude towards tax avoidance schemes they consider to be questionable and, over the years, have introduced an ever-increasing variety of rules and regulations in combating such schemes and taken court proceedings over a number of them, with varying degrees of success. HMRC have recently issued guidance on such schemes, called ‘Ten things a promoter of tax avoidance schemes won’t always tell you’, and though the guidance is clearly intended to act as a disincentive to those considering such schemes, it does contain some useful material. It is important when considering any tax planning exercise to ensure that the proposals…