Home Improvements – Plan for your next Move

Home Improvements – Plan for your next Move

Home Improvements – Plan for your next Move
Posted on 15th November, 2021

The pandemic has seen record numbers of us undertaking DIY projects or getting tradesmen in to improve our homes. Our enthusiasm shows no sign of abating either, with the waiting list for builders stretching into next year.

Anna Manning, an Associate in our conveyancing team, agrees this trend is likely to continue and adds some words of caution, “Always make sure you get any necessary approvals, or you could run into problems when you come to sell your property.”

Here, she looks at some of the issues and how to ensure your home improvements do not cause problems when you later put your home on the market.

Planning permission, do you need it? 

Not all alterations require planning permission. Generally, you will only need it if your proposed works constitute development. This has a special meaning under planning rules. It includes structural alterations and the sort of work a builder would ordinarily do. Non-structural work to the interior, like repainting the walls or replacing window frames, does not normally need permission, although special rules apply for listed buildings and conservation areas.

If your proposed works fall within the scope of permitted development rights, you will not require permission either. This exception covers some of the most common types of home improvement, such as small extensions and loft conversions. However, permitted rights are subject to conditions and limitations and may not apply in all locations.

Working out whether you need planning permission can sometimes be complicated. However, your solicitor, architect or local authority can help. If there is still doubt, we may suggest applying for a certificate of lawful development. This would give you peace of mind that your improvements are lawful from a planning perspective.

Not obtaining the appropriate planning permission can have serious consequences. The local planning authority could require you to restore your home to its original condition. Buyers will also want to see evidence of compliance as the planning authority could proceed against them, as owners, in the future.

Building regulations

Alterations may need building regulations approval, even if they do not need planning permission. Building regulations cover a wide range of work, for example, the structural integrity of foundations, adequate ventilation, and the safety of any electrical installations. They ensure minimum standards for the design and construction of buildings. Failure to comply could result in the local authority taking enforcement action, including requiring you to remedy any defects.

There are two ways to apply for building regulations approval: a full plans submission and a building notice submission. The former has the advantage of certainty: you know at the outset that if you follow the approved plans and correct procedure, you will get a certificate of compliance on completion of the works. The building notice route is more ad hoc and involves staged inspections.

In either case, it is important to ensure the building inspector signs the work off when finished and you get a certificate of completion. Keep this safe, as your buyer is likely to want to see it.

Restrictions in your title deeds or lease

Your title deeds or lease may contain restrictions, which limit what you can do. For example, they may stop you from building on your land without first getting consent from a third party.

Complying with these types of restrictions can be problematic. For example, you may not know who to approach for consent in the case of a title restriction, particularly where the restriction was created a long time ago. Applying for your landlord’s consent is usually more straightforward, but you will need to factor in the time it will take and the additional cost.

Failure to comply with a restriction risks legal action. For example, if you fail to obtain the required consent from a neighbouring landowner for an extension, the neighbour could seek compensation or its removal. If you breach the terms of your lease, your landlord could seek to end your lease early.

When you come to sell, your buyers will want to be sure there have been no breaches of title restrictions that could affect them when they become owners of the property. So, it is important to obtain any necessary consents and keep them safe. 

What to do when it comes to selling your home

Give copies of any documents relating to the alterations to your solicitor. This includes any consents, guarantees, or warranties. This will help answer the buyer’s pre-contact enquiries promptly and get your sale off to a good start. If necessary, we can usually obtain copies of planning permissions or building regulations notices from the local authority. However, this may slow things down a little, especially if they reveal issues that need further investigation.

Sometimes if you have not obtained consent when you should have, you can apply for planning permission or building regulations approval retrospectively. In any case, if the works are more than four years old, the council cannot usually take enforcement action over a planning breach. For building regulations, the period is one year. So, your buyer may agree to overlook a technical breach.

Unfortunately, there remains a small residual risk of enforcement action, for example, if the council believes there is a serious safety risk. If necessary, a specialist report or suitable insurance cover may provide additional reassurance for the buyer and allow your sale to proceed.

You can also apply retrospectively for consent required under title and lease restrictions, or title insurance could provide a quicker, pragmatic solution. Approaching someone for retrospective consent could make the risk uninsurable, so it is important to discuss your situation with us early on. We can then help you make informed decisions and avoid any unintentional consequences.

We can help

For further information, please contact Anna Manning in the Residential Property team on 01823 362892 or email anna.manning@everys.co.uk.

This article is for general information only and does not constitute legal or professional advice. 

Health and safety at work in Covid-19 times

Health and safety at work in Covid-19 times

Health and safety at work in Covid-19 times
Posted on 1st November, 2021

During the coronavirus (Covid-19) pandemic, employers are obliged to take reasonable steps to protect their employees and workers from harm, including the risk from coronavirus, and that will usually involve carrying out a risk assessment dealing specifically with coronavirus, and reflecting public health regulations and Government guidelines.

Risk Assessment

As part of that risk assessment, the employer must identify any situations or work activities that might cause transmission of coronavirus; consider who might be at risk (including, for example, employees, customers, delivery drivers, outside contractors); decide how likely it is that anyone could be exposed to coronavirus; and identify any steps that could reasonably be taken to reduce the risk.

When carrying out the risk assessment, it is important to remember that not everyone is the same and that you may need to consider things such as your workers’ personal circumstances, background, religious (and other) beliefs. For example, you may have employees who have caring responsibilities for vulnerable children or adults; employees who, for whatever reason, do not wish to be vaccinated against coronavirus; pregnant or disabled employees. Special consideration may be required in respect of these groups, and it is important that no-one within the workplace should feel discriminated against or that their feelings and personal circumstances are not taken into account.

You should consider talking to your employees when carrying out a risk assessment to ensure that any steps you are proposing are realistic, and it may, of course, be the case that your employees have their own ideas about controls that could be put in place to ensure their health and safety in the workplace, or indeed when outside of the workplace (for example, when working from home) on work business.

Steps to Consider Taking

Examples of steps employers could consider taking to prevent the spread of coronavirus include the following:

  • Having good ventilation – open windows and doors if it is safe to do so (remembering that fire doors must be kept closed);
  • Making suitable facilities available for handwashing and sanitising (consider erecting signs reminding employees of the need to wash hands/use hand sanitiser regularly);
  • Keeping the workplace and frequently used work surfaces clean;
  • Consider a hybrid office working/working from home policy that will allow social distancing in the workplace by staggering start/finish times and allowing employees to come into the workplace on different days if your work model allows.

If you employ fewer than five employees, you still need to carry out a risk assessment but do not necessarily need to retain anything in writing, although, of course, it is always advisable to do so.

It is also worth mentioning that it is not simply a case of carrying out a risk assessment and putting controls in place – you should be monitoring the workplace to ensure that the controls are being adhered to and are working as expected.

What to do if Employees are Concerned about going into the Workplace

Firstly, as an employer, you should encourage your staff to talk to you about any concerns they have so that you can try to resolve them together. You should also try to understand the reasons why the employee has these concerns, for example: are they at high risk of catching coronavirus – do they have specific health problems that would make them particularly vulnerable to the virus? Are they disabled? Do they care for someone within the home who is vulnerable or at high risk? Are they pregnant? Do they have children?

The employer should listen to employees’ concerns and take whatever steps are reasonable to ensure their safety at work. If there are “reasonable adjustments” the employer could take for disabled staff, consider putting these in place.

Taking Employees’ Concerns Seriously

Employers should be careful to take concerns raised by employees seriously. Employees and workers are protected by law from being dismissed or suffering detriment if they raise concerns to their employer about a health and safety issue. They are also protected if they reasonably believe that being at work would put them in “serious and imminent danger” and are then dismissed or treated less fairly by the employer as a direct result of raising these concerns. In these circumstances, an employee can make a claim to an Employment Tribunal for unfair dismissal or unlawful detriment under the Employment Rights Act 1996 even if they do not have the two years’ qualifying employment that would normally be required to make an unfair dismissal claim. It is also possible for an employee who believes that their employer has not taken reasonable steps to protect their health and safety and to prevent the spread of coronavirus, to resign and then claim for constructive dismissal. Be aware also that concerns may be reported to the Health and Safety Executive (HSE) to deal with under their powers.

There have been several cases heard by the Employment Tribunal in recent months arising out of such issues and in which judgment has been made in the employees’ favour – the employer was not able to show that a dismissal arising out of an employee’s concerns was unrelated to those concerns being raised and was for a fair reason. It is anticipated that further cases will come through the Employment Tribunal in the coming months. Employers are advised to take employees’ concerns seriously and to do what they can to accommodate them and to make the workplace safe.

If you require any advice on any of the issues above, please contact Nicola Grant at Everys’ Taunton office on 01823 362879.

Do I need a Financial Consent Order when getting a divorce or dissolution?

Do I need a Financial Consent Order when getting a divorce or dissolution?

Do I need a Financial Consent Order when getting a divorce or dissolution?
Posted on 12th August, 2020

This is a question that I am asked many times and one where the consequences of not obtaining one can be devastating. The simple answer to this question is yes.

It is often a misconception that once you are divorced or your civil partnership is dissolved, your ex-husband/ex-wife cannot make any claim against your assets. This will only be the case if you are divorced/have a dissolution, and you have a Financial Consent/Remedy Order.

The best way to explain this is in a real-life scenario that I often see:

A husband and wife get a divorce without any legal advice. They share a house together but decide that one party will carry on paying the mortgage for the time being and they will sort out the equity in the property at a later date. Years go by, and perhaps both parties now have other partners. One party then decides that they would like the property sold so their equity can be released. The other party does not want the property sold. They both, at that stage, seek legal advice. There is a risk that the parties cannot agree, in which case they will then need to attend Court, despite it being many years later after their divorce.

In this scenario, both parties have left themselves wide open to financial claims against each other’s assets. Yes, they only have one joint asset but, by this point, one party may have bought another property, the parties may have considerably increased their pensions, they may have significant savings, or they may have received an inheritance. All of this would be open to a claim being made by their ex-wife/ex-husband because they did not have a Financial Consent Order. Further, their new partner’s assets may be taken into account in proceedings.

The only way to have security over your assets in divorce/dissolution is to have a Financial Consent Order as well. There are many ways in which this can be obtained and there doesn’t have to be huge expense or Court hearings.

If you would like further advice, please do not hesitate to contact the Family team for a one-hour appointment, at a reduced fixed fee of £125 plus VAT.

 

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Wills

The Overhaul of Divorce Proceedings

The Overhaul of Divorce Proceedings

The Overhaul of Divorce Proceedings
Posted on 14th July, 2020

Divorce proceedings can often be portrayed as being lengthy, costly and contentious. This certainly is not the case for everyone, but, unfortunately, this can be the reality for some. I, for one, am extremely welcoming of the new legislation, Divorce, Dissolution and Separation Act 2020.

When will it be implemented?

The Royal Assent was received in June 2020, but this doesn’t quite mean it is law yet. Receiving Royal Assent means that the Bill has passed through the required stages in Parliament and has now passed the formality in which the Queen agrees it can be law. The Government is now working on the implementation and, therefore, it is expected that it will become law in autumn 2021.

[UPDATE JUNE 2021: The Ministry of Justice is now working on a commencement date of 6th April 2022 after the government admitted it is unable to meet its target of autumn 2021. Read the article in the Law Gazette here.]

How does the divorce process work under the current law?

The current process for divorce is that you must show that your marriage has irretrievably broken down by evidencing this with one of five facts: adultery, unreasonable behaviour, desertion, a two-year separation with consent, or a five-year separation without consent. Not all situations fit into one of these categories and, therefore, if you want to begin your divorce before two years of separation, adultery or unreasonable behaviour are often used. These are both used by asserting blame to one party for the breakdown of the marriage. Placing blame on one party’s behaviour can cause bad feeling from the very beginning which then sets the tone for the rest of the proceedings and can often cause contested, costly and lengthy proceedings.

How will the new law change the way divorce is dealt with in the future?

It is often difficult to look at how a new law will work until it is in practice. However, we do know that the new legislation will remove the five facts that are currently relied upon, so that you will simply need to show, by way of a statement, that the marriage has irretrievably broken down. This means that in situations where the parties are in agreement their marriage has broken down but do not want to have to assert blame, they can begin their divorce process immediately, rather than waiting for two years. Further, parties will be able to make a joint application for divorce to show that they are both in agreement.

The new law has been known within the media as the “no-fault divorce”. The idea is that the new law will encourage and enable parties to focus their attention on the financial settlement and the children, rather than asserting blame on the breakdown of the marriage. If there are children within the marriage, it is extremely important that the relationship as parents is not affected, so that the children are protected from the divorce proceedings and a no-fault divorce will aim to assist with this.

As a Solicitor and member of Resolution, my priority is to settle matters for my clients as effectively as possible. I am sure the new legislation will have its initial teething problems like all new processes, but I welcome any amendment that will look to reduce conflict and confrontation for my clients.

If you have a matrimonial query, please do not hesitate to contact me for advice.

Lisa Miller

 

 

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Family Law

Can an estate be diverted to someone else?

Can an estate be diverted to someone else?

Can an estate be diverted to someone else?
Posted on 6th July, 2020

Read time: about 8 – 10 mins

A wife (W) has died, leaving her entire estate of £700,000 to her husband (H), which includes the family home and a rental property from which she received an income. However, H believes that W would have preferred to leave her estate to her childhood friend (F). H is trustee and executor of W’s will so what options could he use, in his capacity as beneficiary of W’s will, to divert the estate to F?

First of all, caution should be exercised by the adviser here: a full understanding of the circumstances surrounding the matter is required.

We would need to satisfy ourselves that H wishes to give the gift freely and is not under any undue influence from F and that he has the requisite mental capacity to gift the assets.

An understanding of why H believes that W had wished to gift the asset should also be considered as well as knowledge of the circumstances in which W’s will was drafted.[1] Any letter of wishes or other accompanying documents should also be taken into account to obtain a clear understanding of H’s motivation.

Financial advice would clearly need to be sought by H. Consideration should also be given as to whether he is likely to require care from the local authority in the not too distant future.[2]

Should the adviser be satisfied that H has the ability to make the gift, having taken all the circumstances into account, then the following options would be available to H as beneficiary:

Deed of Variation

1) An absolute gift of assets held in the wife’s sole name

H can vary the provisions of W’s will at any time. If H signs an instrument of variation within two years of W’s death, then special tax treatment of the disposal should apply so that any disposal is treated as being a disposal directly from the deceased rather than the donor of the gift.[3]

Such a variation could include some or all of the assets that H is due to inherit from his late wife’s estate.

The benefits of a deed of variation are that H can direct to whom W’s estate will pass.

The negative impact of a gift by variation however would not only be the financial consequences for H (since his estate would be greatly reduced by the gift) but this could also have several negative consequences for tax purposes both for H and F.

Under the present arrangement, all W’s assets will pass to H free of inheritance tax regardless of the value, assuming that they are both UK domiciled. H’s estate will also be able to benefit from W’s transferable nil rate band (providing it has not been used up in her lifetime) and benefit from W’s unused residence nil rate band, assuming the property on his death passes to direct descendants and their joint estates are not over £2 million, in which case the residence nil rate band element is reduced by £1 for every £2 above the threshold.[4]

Should H wish to direct any portion of his beneficial interest to F, his transferable nil rate band will be eaten into and his estate will have a percentage available allowance depending on the value of the gift that has been passed to him.[5] Depending on the value of the gift, there might also be an immediate charge to inheritance tax.

Any gift through a deed of variation though, as long as H reserves no benefit from it once gifted, will reduce H’s taxable estate accordingly.

2) An absolute gift of assets passing by survivorship to the husband

Should H have inherited any assets through survivorship then he will be able to sever the joint tenancy post death and redirect W’s share of the asset to F should he wish.

If the family home was held as joint tenants and H severs the joint tenancy so that it is held as tenants in common and then gifts a half share (or other portion) to F he should consider this position carefully. If H wanted to sell the property, then he would need to have F’s consent. Problems can also arise between joint owners as far as maintenance of the property is concerned. If H wants to proceed with this option then a Declaration of Trust outlining the duties and responsibilities of the owners of the property in detail would be advisable. Separate legal advice would need to be sought by each party.[6]

If there is a charge on the property, then consent from the lender might be required for any change in ownership and it might be a requirement for F to become party to the mortgage.

In addition, the same impact for inheritance tax purposes will apply here where assets are passing to F as a non-exempt beneficiary.

There might also be capital gains tax implications on a disposal of the family home on F’s share if it is a second home for him.

3) A variation onto discretionary trust

H can opt to settle some or all of W’s estate onto discretionary trust through an instrument of variation.

In this case the Trustees would exercise their discretion over the trust assets, but discretionary payments of income or capital could be paid to a number of potential beneficiaries.

Here, both F and H could be potential beneficiaries as well as any other relevant beneficiaries perhaps as outlined in W’s will.

The flexibility of this arrangement could be beneficial for all parties since it might provide H with some financial security should he need it in the future and F with some benefit if this is in accordance with W’s wishes, subject to Trustees’ agreement to make distributions.

Inheritance tax will be payable on trust assets over the nil rate band and exit charges will apply.

It is unlikely to be desirable for H for the family home to be put into discretionary trust since the Trustees would need to exercise their discretion in relation to H’s occupation of it. If he wishes to continue to reside there then a market rent should be payable in relation to the portion held in the discretionary trust otherwise it risks being treated as a sham.[7]

It may however be favourable for H to consider this option for some of the assets. The same IHT treatment will apply for H’s estate in that it will affect his estate’s available transferable nil rate band, but the trust assets should be outside of his estate for IHT purposes on his death.

On trust income over £1,000 the trust assets will be charged at 38.1% on dividend income and at 45% on all other income which is pertinent for the income that will be received from the rental property[8].

Capital gains tax will also apply to trust assets, but holdover relief should be available.

4) A variation onto a life interest

Another option would be for H to vary his entitlement so that it passes onto a life interest for him with the future capital interest passing to F.

In this scenario H would be entitled to the income from the trust for life and would be able to benefit from any interest or dividends from cash savings as well as the income from the rental property. On H’s death the capital value would pass to F.

For IHT purposes the value of the life interest would be aggregated with H’s free estate but his estate would be entitled to benefit from any available transferable nil rate band (and RNRB if applicable) on death.

This type of trust is more rigid, and the default position is for income only payments to be made to H[9]. It may however mean that the capital value of the trust would not be taken into account as far as his financial assessment is concerned should he have the need for care in the future.[10]

An ability to distribute capital to H during his lifetime (or to F) could be included in the trust instrument to allow more financial flexibility for the beneficiaries but any capital payments would be subject to the Trustees’ agreement.

The income tax position would be more favourable here as dividend income will be taxed at 7.5% and all other income at 20%[11].

If there is a lifetime termination of the interest then it will be treated as a potentially exempt transfer (‘PET’) (see below) and CGT may apply.

Lifetime gift

As mentioned above, any gifts through variation passing to non-exempt beneficiaries will affect the amount of transferable nil-rate band available for H’s estate and might incur an immediate IHT liability. H could consider making a lifetime gift of assets passing to him from W’s estate to F.

This would be treated as a PET for inheritance tax purposes and therefore he would need to have survived seven years from the date of the gift for its value to be outside of his estate for inheritance tax purposes[12]. Reducing rates apply where H has survived the gift for between four and seven years.

Any gift over the nil rate band through variation would create an immediate liability to inheritance tax which a lifetime gift by H could avoid.

It should be ensured that no benefit of the gift is reserved by H to ensure that his estate is reduced for IHT.[13]

Disclaim

H could disclaim a gift due to him under W’s will.[14] But it is not possible to disclaim in favour of someone i.e. to re-direct the gift so if H disclaims any part of his inheritance then it will pass in accordance with the next entitled under the will or the intestacy rules.[15] If F was the next entitled under the provisions of W’s will then this might satisfy H’s wishes to surrender the entire estate. If this is not the case, then this course of action will not meet H’s objectives.

It should be noted that H cannot disclaim W’s share of property passing to him by survivorship and any joint tenancy cannot be severed by H post-death so that he can disclaim.

Should H choose to disclaim his share of the estate passing to him from W then there would be an immediate inheritance tax charge payable, subject to any applicable reliefs.

Will

It may be that H’s objectives could be achieved by a gift in his will to F. An understanding of his circumstances would be required to take into account any competing claims under the Inheritance (Provision for Family and Dependents) Act 1975.

Such a gift would not have the same negative impact on his transferable nil rate band, nor would it incur an immediate IHT charge on W’s death. Furthermore, it would allow H financial security for his lifetime, but it would mean that F’s beneficial entitlement would be postponed until H’s death.

 

Notes:

[1] A Larke v Nugus ([2000] WTLR 1033) letter may be required

[2] See Care Act 2014 and deliberate deprivation rules

[3] S142 Inheritance Tax Act 1984 and s62 Taxation of Chargeable Gains Act 1992

[4] Sections 8D-M and s18 of the Inheritance Tax Act 1984

[5] Finance Act 2008 Schedule 4

[6] Solicitors Regulation Authority Code of Conduct Version 21 Chapter 3 and 4

[7] Rahman v Chase Bank Trust Co (CI) Ltd. (1991) JLR 103

[8] See Finance Act 2019 and Income Tax Act 2007

[9] Statutory powers of advancement will apply, subject to contrary provision in the trust instrument

[10] This might also be applicable to some of the other options listed

[11] See Finance Act 2019 and Income Tax Act 2007

[12] s3A Inheritance Tax Act 1984

[13] See HMRC Manual IHTM14333

[14] See RE Stratton’s Disclaimer [1958] Ch 42, [1957] 2 All ER 594

[15] re Scott, Widdows v Friends of the Clergy Corporation [1975] 1 WLR 1260 [1975] 2 ALL ER 103

International Surrogacy – What to expect

International Surrogacy – What to expect

Embarking on a surrogacy arrangement abroad can be daunting for any couple wishing to engage in the process.  There are lots of things that the intended parents need to consider to ensure that the process runs smoothly.

As it currently stands, there is no single legal process for parents wishing to engage in an international surrogacy arrangement.  With every case, careful attention and legal planning is required to ensure that parents are able to engage in the process without the pitfalls.  It is vital that all intended parents plan properly and consider using countries that are well-established in the surrogacy field.

There are many countries across the world that welcome the process of surrogacy and it can be seen that North America, particularly California and Canada, is very popular because of its experience and laws in this specific area.  For children born in Canada or the United States, they are recognised as Canadian or American citizens and parents from the UK can obtain a passport within a three month period.  It is normal to expect that the majority of those parents engaged in this process travel back to the UK with the child’s/children(s) foreign passport.  Parents must be aware that there is no guarantee that they will be admitted with their child/children to the United Kingdom because of visa complications, and so careful planning is required.  Intended parents can, of course, apply for a British Passport or an entry clearance visa stamp in the United States prior to travel to eliminate any issues.  However, parents must be aware that this can take time.

A British passport is generally only available immediately if the surrogate is unmarried and the British biological father is registered on the child’s birth certificate in the United States (for particular states).  The alternative is that the child/children will be registered as a British Citizen or will have to apply for an entry clearance visa.

For other countries that are perhaps not as well-established as the United States or Canada, such as Thailand, Russia, Georgia, Ukraine and India, there are multiple options to consider.  It is vitally important that intended parents undertake as much research as possible to eliminate any possible pitfalls.

Intended parents are able to obtain a British passport for their child/children if he or she is born British or successfully registered as a British Citizen.  Parents can apply for an entry clearance visa, which is granted on a discretionary basis where intended parents can undertake to apply for a parental order.

A visa either takes the form of a stamp in a foreign passport or a free-standing travel document if the child has no passport.

Planning is vital and parents must be prepared to stay in the birth country for a period of 4-5 months.

For more information, or a preliminary, confidential discussion contact our Fertility expert Anne-Marie Hamer.