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Administration actions—table of cases

Administration actions—table of cases Validity of Wills Topic Case name Summary Author Revocation clause Re estate of Sangha, deceased (probate); Sangha v Estate of Sangha (represented by the second defendant pursuant to the Order of Master Bowles dated 5 April 2018) and others [2022] EWHC 2157 (Ch) News Analysis: Revocation clauses and section 9(d) of the Wills Act 1837 (Sangha v Sangha)The Court allowed the appeal deciding that the revocation clause in a Will disposing only of Indian assets had the effect of revoking a previous English Will and dismissed the appeal holding that it was not necessary for each witness to acknowledge their signature after the testator had acknowledged his signature to them, Francis Ng, Selborne Chambers Disclosure Topic Case name Summary Author Sealing of a Will Executor of HRH Prince Philip, the Duke of Edinburgh (Deceased) and another v Guardian News and Media [2022] EWCA Civ 1081 News Analysis: The sealing of Royal Wills vs principles of open justice (Executor of HRH Prince Philip, the...

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Payment of legacies

Identification of beneficial interestsThe personal representatives (PRs) of an estate must identify:•the beneficiary or beneficiaries entitled to each particular legacy•what each beneficiary is entitled to receive, and•the time at which each legacy should be distributedExecutor's yearPRs have at least one year from the date of death before beneficiaries can call on them to distribute any part of the estate. Even after one year, the PRs may not yet be in a position to distribute the estate.Deciding to distributeBefore deciding to commence distribution of legacies, PRs must consider if there is reason to delay distribution due to other aspects of the estate administration being incomplete or potential issues arising, such as:•outstanding tax liabilities•outstanding debts•unknown beneficiaries•rectification action•family provision claims•variation or disclaimer, or•any other uncertainties regarding the estateBeneficiariesDuty to distributePRs must distribute to the persons entitled under the deceased's Will or under the intestacy rules. Before distributing, they must satisfy themselves as to the correct identity of the beneficiaries. See Practice Note: Will interpretation—specific beneficiary identification issues.Class descriptionsWhen a beneficiary under the Will...

Contents of Wills—legacies

The terms 'legacy' or 'bequest' are generally only applied to a gift of money or a personal item but they can also, in certain circumstances, refer to the gift or devise of land. In addition, the term 'legacy' may or may not include annuity, according to the context. This was explained by Sir William Page Wood, VC in Gaskin v Rogers:'…if you find simply the word "legacy" used, and a direction to apportion the property amongst the legatees, unless there be something apparent on the face of the Will which shows that the testator has not used the word in its ordinary legal signification, it will include annuitants. The expression 'pecuniary legatees' in itself, I do not think, would go further than this—it would exclude specific legatees, that is, legatees of mere chattels, but it would have no effect in excluding, prima facie, annuitants from taking the same benefit as they would have taken if the word had been 'legatees' instead of 'pecuniary legatees'. All these rules of construction are...

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Will (Scotland)—Legacy to charity (10% of baseline amount), legacy of house with cash option, residue to number of individuals or to survivors or survivor of them, dealing with tax on lifetime gifts, renunciation

Will (Scotland)—Legacy to charity (10% of baseline amount), legacy of house with cash option, residue to number of individuals or to survivors or survivor of them, dealing with tax on lifetime gifts, renunciation FORTHCOMING CHANGE: Abolition of non-dom regime and introduction of residence-based IHT regime At Autumn Budget 2024 on 30 October 2024, the Labour government confirmed that it will proceed with plans of the former Conservative administration to abolish the remittance basis of taxation and replace it with a residence-based regime, to commence on 6 April 2025. The government also confirmed its intention to move to a residence-based regime for inheritance tax. The changes will also affect the rules determining excluded property status, the Abolition of protected settlements status of offshore trusts, and changes to overseas workday relief. For information on these changes, including draft legislation published with Autumn Budget 2024, see: Autumn Budget 2024—Private Client analysis—International, Autumn Budget 2024 (paras 2.56 and 5.51), OOTLAR (para 1.3) and TIIN: Reforming the taxation of non-UK domiciled individuals. See also Private...

Will (Scotland)—to spouse, whom failing children, simple powers

Will (Scotland)—to spouse, whom failing children, simple powers FORTHCOMING CHANGE: Abolition of non-dom regime and introduction of residence-based IHT regime At Autumn Budget 2024 on 30 October 2024, the Labour government confirmed that it will proceed with plans of the former Conservative administration to abolish the remittance basis of taxation and replace it with a residence-based regime, to commence on 6 April 2025. The government also confirmed its intention to move to a residence-based regime for inheritance tax. The changes will also affect the rules determining excluded property status, the Abolition of protected settlements status of offshore trusts, and changes to overseas workday relief. For information on these changes, including draft legislation published with Autumn Budget 2024, see: Autumn Budget 2024—Private Client analysis—International, Autumn Budget 2024 (paras 2.56 and 5.51), OOTLAR (para 1.3) and TIIN: Reforming the taxation of non-UK domiciled individuals. See also Private Client analysis: Publication of Finance Bill 2024–25. I, [insert full name], residing at [insert full address], in order to settle the succession to my estate...

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The income of a specific legacy is payable to X for a period of time following the testator’s death, with capital passing to Y after that. What is the inheritance tax (IHT) treatment of the legacy?

The income of a specific legacy is payable to X for a period of time following the testator’s death, with capital passing to Y after that. What is the inheritance tax (IHT) treatment of the legacy? The inheritance tax (IHT) treatment of the legacy will depend on all the facts and circumstances of the case (in particular, the drafting of the Will, the nature of the property being transferred and the nature of the beneficiaries). For example, it may be the case that the legacy establishes an interest in possession in favour of X as the life tenant, remainder to Y. In terms of the IHT treatment of dispositions made by the deceased in their Will, the IHT payable by their estate and any reliefs or exemptions which may be available, see the following Practice Notes: • Introductory guide to IHT • IHT—the charge on death • IHT exemptions and reliefs on death and lifetime gifts See also the

If a Will leaves a specific legacy of a property free of any mortgage on the property but the deceased only owned a part share of the property at death, are there any general rules of interpretation as to whether the whole of the mortgage would need to be settled from residue or only a proportion in line with the deceased’s share of the property? Would this affect the level of deduction in relation to the mortgage for Inheritance tax purposes?

If a Will leaves a specific legacy of a property free of any mortgage on the property but the deceased only owned a part share of the property at death, are there any general rules of interpretation as to whether the whole of the mortgage would need to be settled from residue or only a proportion in line with the deceased’s share of the property? Would this affect the level of deduction in relation to the mortgage for Inheritance tax purposes? This assumes there are no specific provisions in the Will as to the order in which assets should be applied to pay debts, and also that the mortgage debt does not exceed the value of the property itself. The starting point is that all of the deceased’s debts must be paid before the estate can be distributed, and (subject to anything in the Will) those debts must be paid first from residue (section 34(3) of the Administration of Estates Act 1925). If the deceased was liable on the mortgage,...

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Question of the week: How does abatement apply where a testator has left £50,000 to trustees on discretionary trusts and £50,000 to a family member, but there are insufficient funds to settle the legacies in their entirety?

This Q&A considers how abatement applies where a testator has left £50,000 to trustees on discretionary trusts and £50,000 to a family member, but there are insufficient funds to settle the legacies in their entirety.

Question of the week: A Will leaves a specific gift of property to an exempt beneficiary and a number of cash legacies. Grossing up of the cash legacies results in there being no residue and the legacies will abate significantly but not to the extent that the property is affected. How is the inheritance tax liability calculated?

This Q&A considers the calculation of inheritance tax (IHT) where a Will leaves a specific gift of property to an exempt beneficiary and a number of cash legacies where grossing-up of the cash legacies results in abatement of the legacies but does not affect the property.