October News Articles
Inheritance thresholds rise but couples without a will are still at risk
The Government is to raise the amount of money a husband or wife can automatically inherit if their partner dies without making a will.
However, it could still leave the surviving spouse at risk.
Many people believe that when a person dies, all their estate will be passed on to their surviving spouse. This is not the case. The estate is in fact divided between surviving relatives in a manner laid down by the law.
At present, if the deceased person has children then the surviving spouse receives £125,000 from the estate, assuming it contains that level of assets. If there are no children then that figure is increased to £200,000.
The rest of the estate would be shared out between the children or other relatives if there are no children. These thresholds - known as the statutory legacy for people dying intestate, that is, without having made a will - have been in force since 1993.
Now they are to be increased to £250,000 when a deceased person leaves children and £450,000 when there are no children. The increase is well below house inflation over the same period and also below the figures recommended by the Department for Constitutional Affairs in 2005. It suggested £350,000 and £650,000 respectively.
The level of the threshold is very important because most people’s main asset is their house. If the value of the house is above the threshold, the surviving spouse may have to sell up so the deceased’s children can receive their share of the inheritance. There have been examples where this has happened.
Announcing the increases, the Justice Minister Bridget Prentice, said: “This increase will give extra protection to married couples and civil partners whose spouse or civil partner dies without making a will. But it also highlights how important it is for both men and women to make arrangements for their loved ones in the event of their deaths.
“Married couples and civil partners should not assume that when their spouse or civil partner dies, they will automatically be entitled to everything. It is up to individuals to make sure that their wishes are respected by making a will.
“My message to people is, don't leave it to chance. Make sure your loved ones are properly provided for by leaving a will.”
The new statutory legacy figures come into effect on 1st February 2009.
It is perhaps unfortunate that the Government did not raise the threshold further but the advice to make a will is well founded and should be followed by anyone who wants to ensure that their estate is divided according to their wishes.
Failing to make a will can lead to considerable hardship and heartache for your spouse and family. Please contact us if you would like more information about wills and probate.
Divorcee to get £50,000 a year to care for her horses
A wife is to receive a divorce settlement which includes £50,000 a year to care for her three horses.
The award was made after the court was told that she was devoted to the animals which were a key part of her life. Her husband, who is an investment banker, was also ordered to give her £900,000 so that she could buy a house with surrounding fields so the horses could graze.
The woman will also receive £30,000 a year maintenance for herself in a divorce package worth a total of £1.5m. The husband had argued that the money for the horses was an unnecessary extravagance and that £600,000 would be enough for her to buy a house.
However, the district judge made the award after being told that horses had been a prominent part of her life. The couple, who have not been named, had been married for 11 years and had no children. The court was told that the horses were like a child substitute for her, particularly after she had lost a baby in 2001.
In the past, she had spent £20,000 from a personal inheritance to buy two horses and her husband had given her a foal to celebrate their tenth wedding anniversary. She told the court: “Horses are my family. I see them every day. You form a very close bond with horses.”
The couple, who live in Gloucestershire, had joint assets of £3m. The husband earned £60,000 a year plus substantial bonuses and the wife undertook interior decorating and part time book-keeping.
The Court of Appeal has upheld the district judge’s award. Sir Mark Potter, one of the three Appeal Court judges hearing the case, said: “During the marriage the horses played a major part in the wife’s life with the consent and encouragement of the husband.”
He added that while the husband remained in his post with his current level of income, “it was not right to expect the wife to work full-time so she was left with no time for her horses”.
This is an unusual case which sets something of a precedent but it doesn’t mean that divorcing wives will automatically be able to claim large sums to pay for the maintenance of their horses or other animals.
Each case will be different and, of course, a couple would have to have considerable assets for this to become an issue. However, it is possible that in certain circumstances, a person could receive maintenance for pets if they could show that they were an important part of their life.
Please contact us if you would like more information about divorce or cohabitation issues.
Government reduces stamp duty burden to boost housing market
The Government has moved to boost the housing market by raising the threshold at which stamp duty becomes payable to £175,000.
The previous threshold was £125,000. The new higher limit will remain in force until 3rd September 2009 and should provide substantial savings for buyers.
Ministers estimate that half of all home purchases will be exempt from stamp duty. Previously, only about one in three transactions were exempt.
There are also new measures to help first time buyers to get on to the housing ladder and to support existing homeowners who are struggling with mortgage payments and in danger of having their properties repossessed.
The Department for Communities and Local Government is making £300m available to fund a shared equity scheme designed to help 10,000 first time buyers to purchase newly built properties. The scheme, called HomeBuy Direct, will provide new buyers with an equity loan of up to 30% of the value of the property they wish to buy. The loan, financed by the Government and the developer, will be free of charge for five years.
First time buyers with a combined household income of less than £60,000 are eligible to apply.
There will also be a £200m mortgage rescue scheme to help up to 6,000 homeowners facing repossession. Eligible homeowners will be able to choose between three options. The first option is to enter into an agreement by which a registered social landlord buys a share in the property enabling the owner to pay off part of the mortgage and so reduce the monthly payments.
Secondly, the registered social landlord could provide an equity loan which would again enable the homeowner to reduce the monthly mortgage payments. The third option is sale and rent back. In this case, the landlord buys the property completely and then rents it back to the applicant.
Councils allowed to raise more money to fund equal pay claims
More than 30 councils are to be allowed to raise an extra £455m to fund equal pay claims from their female staff.
The move is an acknowledgement that in spite of improvements, there are still too many instances where women receive less pay than men for doing the same work. There has been a huge rise in the last few years in the number of women taking legal action to assert their right to equal pay.
Figures from the tribunal service reveal that the number of claims rose 155% over the last year and now tops 44,000. This has put a lot of strain on many local councils which have suddenly had to pay out tens of millions of pounds.
Now 34 councils are being allowed to sell some of their assets or borrow against them to raise £455m. The money will be used to make one-off back payments to thousands of women who have been underpaid for several years.
The move is part of an ongoing programme which has provided more than £1.1billion over the last three years. Local Government Minister John Healey said: “Work of equal value deserves equal pay. Local government workers have the legal right to fair pay like anyone else, but some councils have let unequal pay persist for decades.
"I'm determined to see councils settle their equal pay obligations. Local government workers should get the equal pay to which they are entitled.
"Good progress has been made over the past year. But this is not a new obligation on employers and I now want to see even greater progress made, and the momentum of the past year maintained.”
Any employee, whether in the public or private sector, who feels they have been underpaid or discriminated against in any way, should seek legal advice as soon as possible.
We are happy to provide more information about this or any aspect of employment law.
Court orders that abducted children should be returned to their mother
A court has ordered that two children living with their father in England must be returned to their mother in Poland.
The ruling was in keeping with the Hague Convention on the Civil Aspects of International Child Abduction which tries to protect the interests of children caught up in disputes between their parents in different countries.
The couple had been living in Poland and had two children aged nine and six. When the couple separated the children continued to live in Poland with the mother. However, the father then moved to England and later kept the children with him without court permission.
He sent the older child to school and placed the younger one in a nursery. The mother then began proceedings under the Hague Convention to have the children returned to her. The father opposed the application on the grounds that the children were settled in England and did not wish to return to Poland.
The case was eventually heard in an English court which ruled that the children should be returned to Poland. The lack of contact with their mother was damaging them and the father had not been able to produce any evidence to suggest that the usual provisions of the treaty should not apply.
Disputes between parents can be complicated and emotionally draining but as this case illustrates, the courts will always put the needs of the children first.
Please contact us if you would like advice on any aspect of family law.
The danger for landlords in not pursuing overdue rent
The danger for landlords in not chasing up overdue rent and attending to legal detail has been illustrated in a recent case before the Court of Appeal.
It resulted in a landlord having to grant a 21-year-lease to a tenant he would have preferred to evict.
The case involved a landlord who had granted a tenant a 15-year-lease on some retail premises. The retailer later vacated the premises and a new tenant moved in and started trading without the landlord’s knowledge.
The landlord did not object at first when he discovered the change and then in 1998 began negotiations to grant the new occupier a 21-year-lease. The tenant carried out repairs to the premises as part of the proposed lease.
However, the two parties then fell out over various matters including the fact that the tenant was persistently late in paying his rent. The landlord gave notice that he was terminating the tenancy.
The tenant claimed the landlord was prevented from denying his right to a lease by the principle of proprietary estoppel. This is a principle that can be used protect the interests of a person who has been given reasonable grounds to believe that he will acquire rights over a property and has taken action to his detriment on that basis, such as by carrying out expensive repairs.
The judge ruled that the tenant had in fact established an equitable tenancy and was entitled to be granted a 21-year-lease. The judge also held that the tenant’s claim could not be dismissed just because he had persistently delayed paying the rent.
The Court of Appeal has now upheld the judge’s ruling. Commenting on the issue of late payment of rent, the judges said that the landlord’s case had to be considered in the light of his actions. He could not have considered it a serious problem because he never did anything about it apart from write the occasional letter.
The tenor of the landlord’s communication at the time had been that, in spite of the tenant’s poor payment record, the lease could still go ahead.
The current credit crunch has no doubt encouraged most landlords to keep a tight rein on rent arrears but cases like this provide another incentive. They also highlight the need to pay close attention to legal detail when negotiating leases so that problems like these can be avoided.
Please contact us if you would like advice or information relating to landlord and tenant issues.
Age campaigners lose a key stage in compulsory retirement case
A legal adviser to the European Court of Justice (ECJ) says it is not unlawful for employers in the UK to oblige staff to retire at 65 as long as the process has a justifiable policy aim.
Advocate General Jan Marzak was expressing an opinion on a case brought by Age Concern challenging the UK’s default retirement age of 65.
The European Directive on Equal Treatment bans discrimination on the grounds of age. Age Concern believes the Employment Equality (Age) Regulations 2006 fail to fully implement the Directive because they allow a default retirement age of 65.
Marzak expressed the opinion that this retirement age was not unlawful as long as it could be justified as a means to achieve legitimate labour market objectives. The ECJ was only asked to rule on whether the default retirement age was permissible under the directive. It was not asked to go further and rule on whether or not it was justifiable.
The Advocate General’s opinion is not binding but it is followed in about 80% of cases. If the ECJ does follow his advice then the case will be referred back to the High Court in England to decide whether or not the default retirement age can be justified.
There are currently about 260 related cases on hold pending the ruling by the European Court.
We shall keep clients informed of developments.
Negligent surveyor must pay compensation to boat owners
A surveyor who failed to carry out the necessary checks when assessing the value of a boat which turned out to be virtually worthless must now pay compensation to the buyers.
The court heard that a couple commissioned the construction of a custom built rigid inflatable boat. Following disagreements with the builders over certain specifications not being met, they called in a surveyor to examine the craft.
The surveyor asked to see the boat’s technical construction file but never actually inspected it. Nevertheless, he produced a report saying the boat met the Recreational Craft Regulations 2004 and ISO standards.
It later transpired that this was not the case. There was no technical file and for various reasons that the surveyor should have identified, the boat could not be coded by the Maritime and Coastguard Agency. This meant it was essentially worthless apart from what could be made from selling it off for spare parts.
The couple took legal action to recover damages and the court has ruled in their favour. The judge said that a competent surveyor would have not have failed to discover that there was no technical file and would not have given assurances that it met the required standards.
He had been negligent and had failed in his duty of care.
The case illustrates the reliance we must all sometimes place on the professional expertise of others. In doing so, we are entitled to expect that they show the skill and commitment necessary to perform their duties properly.
Thankfully, most professionals do exactly that. However, when they fall short of those standards it is possible to take legal action seeking compensation as in this case.
Landlord prosecuted for failing to get licence for HMO
A landlord from Newquay has been prosecuted for failing to get a licence for a House in Multiple Occupation.
It is one of the first cases of its kind in the country. As well as operating without a licence, there were a number of other breaches of regulations including a faulty fire detection system. The landlord was given a 12-month conditional discharge to run concurrently for each offence.
The National Association of Landlords (NLA) has welcomed the prosecution as a warning to “other rogue landlords who think they are above the law”.
An NLA spokesman said: “The financial and reputational risks of not applying for the correct licence are substantial. I do not understand why landlords continue to take their chances when local authorities are now more determined than ever to encourage tenants to come forward with their concerns.
"There is no doubt that some of the legislation covering HMOs and their licensing requirements is complicated. But I’m afraid ignorance of the law can be no excuse. We are talking about the safety and well-being of individuals and families and rogue landlords must get their houses in order.”
Not all HMOs need to be licensed, but most will if they are three storeys or more and are occupied by five people or more who share some facilities.
The Government established the licensing system as part of the Housing Act 2004 to improve the control of HMOs and ensure proper management standards. The provisions for the licensing of HMOs and the discretionary licensing of other rented accommodation came into effect in April 2006.
Letting a qualifying HMO without a licence, or allowing it to be occupied by more tenants than specified on the licence, is a criminal offence punishable by a maximum fine of £20,000.
Breaches of licence conditions are subject to fines of up to £5,000.
HMOs that are not licensable are still subject to management regulations which impose duties to ensure minimum safety and maintenance requirements are met and that fire precautionary equipment is up to standard. Breaches in these management regulations can lead to a fine of up to £5,000.
Research carried out on behalf of the Department for Communities and Local Government found that 78% of landlords that let HMOs have applied for the necessary licence.
More migrant workers come under new Points Based System
The Points Based System (PBS) for controlling immigration is to be extended from November onwards to cover skilled foreign workers.
Under the system, migrant workers are divided into five tiers ranging from the highly skilled to students and temporary workers. For each tier, applicants have to obtain a certain number of points which are awarded depending on their skills and the extent to which they will be able to contribute to the labour market.
Tier 1 of the PBS, which covers highly skilled migrants, was introduced in February this year. Tier 2, which affects skilled workers, and Tier 5, which affects temporary workers, both come into effect in November. Employers have to apply to the Home Office to sponsor any migrant workers they wish to hire. The potential workers will have to satisfy the requirements needed for the appropriate tier and the employer may have to accept certain responsibilities to help with immigration control.
The rules for employing migrant workers are quite strict. For example, to hire a skilled worker in Tier 2, employers will have to show that they cannot find a resident worker with equivalent skills and that the vacancy has been advertised in the UK.
A statement issued by the Home Office says: “To qualify, skilled foreign nationals will have to earn a certain number of points before being allowed to work in Britain. These points are awarded only if a person can prove they will be doing skilled work, speak a good standard of English, and are earning more than £24,000, or have a decent qualification. Employers will need a licence from the UK Border Agency to offer jobs to skilled workers.”
There are strong financial sanctions against employers who fail to comply with the new system. Within three months of Tier 1 being introduced at the end of February, 137 businesses had been issued with Notices of Potential Liability amounting to almost half a million pounds. There were only 11 successful prosecutions throughout the whole of last year under the previous system.
Road accident victim awarded £421,073 compensation
A woman whose marriage broke down following an accident in which she suffered neck and back injuries has been awarded more than £400,000 in compensation.
The woman was 29 at the time of the accident and had two children. She was in her car when it was hit from behind by another vehicle. The other driver admitted liability.
Before the accident the woman was very active and enjoyed competitive horse riding, bike riding and skiing. She worked as a cleaner and child minder. After the accident, however, her ability to walk and stand was limited and she had to use a stick for support.
She underwent several courses of treatment to relieve the pain from her neck and back injuries but to little effect. She went on to suffer from depression which eventually led to the break-up of her marriage.
The woman was awarded a total of £421,073 compensation. The figure included £40,000 for her suffering and loss of amenity, £248,603 for future loss of earnings and £108,840 for miscellaneous expenses including child care, cleaning and travel expenses.
Anyone who suffers injury as a result of someone else’s negligence is entitled to claim compensation. Please contact us if you would like more information.