CILEX Professional Qualification (CPQ) Advanced Stage: Property and Probate Practice Syllabus

On what grounds can a landlord oppose the grant of a new business tenancy under s.30(1) of the Landlord and Tenant Act 1954?

Seven grounds (a)-(g): (a) tenant's failure to repair; (b) persistent delay in paying rent; (c) other substantial breaches; (d) suitable alternative accommodation offered; (e) sub-letting of part where the whole would let for more; (f) landlord's intention to demolish or reconstruct; and (g) landlord's intention to occupy for its own business or residence.

Which of the s.30(1) Landlord and Tenant Act 1954 grounds give the tenant a right to compensation, and how is it calculated?

The 'no-fault' grounds (e), (f) and (g). Compensation is the rateable value of the holding multiplied by a statutory multiplier (currently 1), or twice the rateable value if the tenant (or predecessors in the same business) has occupied for 14 years or more.

How can a business tenancy be 'contracted out' of the security of tenure provisions of the Landlord and Tenant Act 1954?

Before the lease is granted, the landlord serves a warning notice on the tenant, and the tenant makes a declaration (a simple declaration if at least 14 days' notice is given, or a statutory declaration before an independent solicitor if less than 14 days). The agreement to exclude ss.24-28 is then recorded in or endorsed on the lease.

What is the difference between a legal mortgage and an equitable mortgage?

A legal mortgage of registered land is created by a registered charge (charge by way of legal mortgage) and confers the lender's full legal remedies. An equitable mortgage arises, e.g., from an informal/written agreement to grant a mortgage or a mortgage of an equitable interest, and gives only equitable remedies.

What are the main remedies available to a mortgage lender on the borrower's default?

(1) Sue on the personal covenant to repay; (2) take possession of the property; (3) sell the property (power of sale under s.101 LPA 1925); (4) appoint a receiver; and (5) foreclosure (rare). The power of sale arises when the legal date for redemption has passed and becomes exercisable in the circumstances in s.103 LPA 1925.

When acting for both the buyer and the mortgage lender, what is the conveyancer's key duty and how must conflicts be handled?

The conveyancer owes a duty to both clients and must report to the lender any matter that may affect its security (e.g. discrepancies in price, occupiers, or title defects) under the UK Finance Mortgage Lenders' Handbook. If a conflict arises that cannot be managed, the conveyancer must cease to act for one or both parties.

What is the order of application of proceeds when a mortgage lender exercises its power of sale (s.105 LPA 1925)?

(1) Discharge of any prior mortgages/encumbrances; (2) costs and expenses of the sale; (3) the mortgage debt, interest and costs owed to the selling lender; and (4) the surplus is held on trust for the next mortgagee or, if none, for the borrower.

What are the formal requirements for a valid will under s.9 of the Wills Act 1837?

(1) In writing; (2) signed by the testator (or by another in their presence and at their direction); (3) the testator intended by the signature to give effect to the will; (4) the signature is made or acknowledged in the presence of two or more witnesses present at the same time; and (5) each witness attests and signs (or acknowledges) the signature in the testator's presence.

What are the requirements of testamentary capacity (the test in Banks v Goodfellow)?

The testator must understand: (1) the nature of the act of making a will and its effects; (2) the extent of the property being disposed of; (3) the claims to which they ought to give effect (those who might expect to benefit); and (4) no disorder of the mind must poison their affections or pervert their sense of right.

What is the effect of a beneficiary (or their spouse/civil partner) acting as a witness to a will?

Under s.15 Wills Act 1837 the will remains valid but the gift to that witness (or to the spouse/civil partner of a witness) is void. The witness's attestation is still valid, but they forfeit their gift.

What is the difference between knowledge and approval and the presumption that supports it?

A testator must know and approve the contents of the will. Where capacity and due execution are shown, knowledge and approval are presumed - but the presumption does not apply if there are suspicious circumstances (e.g. the will prepared by a major beneficiary), in which case knowledge and approval must be affirmatively proved.

How may a will be revoked?

(1) By a later will or codicil expressly revoking earlier wills; (2) by a later inconsistent will/codicil (implied revocation); (3) by destruction with the intention to revoke (s.20 Wills Act 1837); and (4) automatically by the testator's marriage or civil partnership (s.18), unless made in expectation of that marriage.

What is the effect of divorce or dissolution of civil partnership on a will?

Under s.18A Wills Act 1837, the former spouse/civil partner is treated as having died on the date the marriage/partnership ended. Any gift to them lapses and any appointment of them as executor takes no effect, but the rest of the will remains valid.

What are the rules on alterations to a will under s.21 Wills Act 1837?

An unattested alteration is invalid unless it makes the original wording no longer apparent (in which case the original is revoked by obliteration). An alteration is valid if it is signed/initialled by the testator and the witnesses in the margin or near the alteration. Alterations are presumed to have been made after execution unless proven otherwise.

What are the doctrines of revival and republication of wills?

Revival (s.22 Wills Act 1837) brings a previously revoked will back into effect by re-execution or by a codicil showing intention to revive (a destroyed will cannot be revived). Republication re-executes or confirms an existing will by codicil, giving it effect as if made on the date of the codicil.

What is the doctrine of dependent relative revocation?

Where a testator revokes a will conditionally - intending the revocation to be effective only if some other outcome occurs (e.g. a new will is validly made) - and that condition is not satisfied, the revocation is treated as ineffective and the original will may stand.

Under the intestacy rules, what does a surviving spouse/civil partner receive where the deceased also leaves issue (children)?

The spouse/civil partner takes: (1) all personal chattels; (2) a statutory legacy (a fixed sum, currently £322,000) plus interest; and (3) one half of the residue absolutely. The remaining half of the residue passes to the issue on the statutory trusts.

Under the intestacy rules, what does a surviving spouse/civil partner receive where the deceased leaves NO issue?

The surviving spouse or civil partner takes the entire estate absolutely. (Since the Inheritance and Trustees' Powers Act 2014, other relatives no longer share where there are no children.)

What is the statutory order of entitlement on intestacy where there is no surviving spouse or civil partner?

The estate passes on the statutory trusts in order to: (1) issue; then if none (2) parents; (3) brothers and sisters of the whole blood; (4) brothers and sisters of the half blood; (5) grandparents; (6) uncles and aunts of the whole blood; (7) uncles and aunts of the half blood; and finally (8) the Crown as bona vacantia.

What does it mean to take 'on the statutory trusts' under intestacy, and what is the survivorship/contingency requirement?

Issue (and certain other relatives) take in equal shares contingent on reaching 18 or marrying earlier, with per stirpes substitution so that the issue of a relative who predeceased take their parent's share equally.

What is the survivorship condition for a spouse/civil partner under the intestacy rules?

The spouse or civil partner must survive the intestate by 28 days to inherit; if they die within that period, the estate is distributed as though they had not survived the intestate.

Who may apply for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975?

A spouse/civil partner; a former spouse/civil partner who has not remarried; a cohabitee of at least 2 years immediately before death; a child of the deceased; a person treated as a child of the family; and any other person maintained (wholly or partly) by the deceased immediately before death.

What are the two standards of 'reasonable financial provision' under the Inheritance (Provision for Family and Dependants) Act 1975?

The surviving spouse/civil partner standard - such provision as is reasonable in all the circumstances, whether or not required for maintenance. For all other applicants, the maintenance standard - such provision as is reasonable for their maintenance only.

What is the time limit for bringing a claim under the Inheritance (Provision for Family and Dependants) Act 1975?

An application must be made within 6 months of the date of the grant of representation, though the court has discretion to extend this period.

What is the difference between a grant of probate and a grant of letters of administration?

A grant of probate is issued to executors named in a valid will. Letters of administration (with the will annexed) are granted where there is a valid will but no able/willing executor. Letters of administration (simple) are granted where the deceased died wholly intestate.

What is the order of priority to a grant of letters of administration on intestacy (NCPR 1987 r.22)?

In order: (1) surviving spouse/civil partner; (2) children of the deceased (issue); (3) parents; (4) brothers and sisters of the whole blood; (5) brothers and sisters of the half blood; (6) grandparents; (7) uncles and aunts of the whole blood; (8) uncles and aunts of the half blood - reflecting the order of entitlement to the estate.

What is an executor's 'chain of representation' and how does it differ from the executor's year?

The chain of representation (s.7 Administration of Estates Act 1925) means that the sole/last surviving executor's own executor automatically becomes executor of the original estate. The 'executor's year' is the convention that PRs are not bound to distribute the estate before one year from death.

What are the principal duties and powers of personal representatives in administering an estate?

Duties: to collect and get in the real and personal estate of the deceased and administer it according to law (s.25 AEA 1925), pay debts, and distribute to those entitled. Powers include the power to sell, appropriate assets (s.41 AEA 1925), invest (Trustee Act 2000), appoint trustees, and run any business for the purpose of administration.

What is the order in which a solvent estate's assets are used to pay debts and liabilities (s.34 / Sch.1 Pt II AEA 1925)?

Statutory order: (1) property undisposed of by will (subject to retaining a pecuniary legacy fund); (2) residue; (3) property set aside to meet pecuniary legacies; (4) property specifically given for payment of debts; (5) property charged with debts; (6) the pecuniary legacy fund; (7) property specifically devised/bequeathed (rateably); and (8) appointed property.

How is an insolvent estate administered, and what is the order of priority for debts?

Where assets are insufficient to pay all debts, the statutory order applies: (1) reasonable funeral, testamentary and administration expenses; (2) secured creditors; (3) preferential debts; (4) ordinary unsecured debts; and (5) interest and deferred debts - creditors of equal rank abate proportionately.

How can personal representatives protect themselves against unknown creditors and missing beneficiaries?

By advertising under s.27 Trustee Act 1925 in the London Gazette and a local newspaper (waiting at least 2 months), which protects PRs from personal liability to unknown claimants. For missing/uncertain beneficiaries they can seek a Benjamin order, take indemnity, or obtain missing beneficiary insurance.

What is the basic charge to inheritance tax on death, and what is the nil rate band?

IHT is charged at 40% on the value of the death estate above the nil rate band (NRB). The NRB is £325,000; the rate is reduced to 36% where at least 10% of the net estate is left to charity.

What is the residence nil rate band (RNRB) and when is it available?

An additional band (currently £175,000) available where a residence is left on death to direct descendants (children/grandchildren). It is tapered away by £1 for every £2 by which the estate exceeds £2 million, and an unused band is transferable between spouses/civil partners.

How does the transferable nil rate band between spouses and civil partners operate?

On the death of the survivor, the unused proportion of the first spouse's/civil partner's NRB may be claimed and added to the survivor's NRB, potentially giving a combined NRB of up to £650,000 (plus transferable RNRB).

What is the difference between a potentially exempt transfer (PET) and a chargeable lifetime transfer (CLT) for IHT?

A PET is a lifetime gift to an individual that is exempt if the donor survives 7 years, but becomes chargeable if death occurs within 7 years. A CLT (e.g. a gift into most trusts) is immediately chargeable at the lifetime rate of 20% above the NRB, with a further charge if death occurs within 7 years.

How does taper relief reduce inheritance tax on lifetime gifts made within 7 years of death?

Taper relief reduces the tax payable (not the value transferred) on gifts made between 3 and 7 years before death: 0-3 years 0%; 3-4 years 20%; 4-5 years 40%; 5-6 years 60%; 6-7 years 80% reduction in the tax charge.

Name the principal lifetime and death exemptions and reliefs from inheritance tax.

Spouse/civil partner exemption (unlimited transfers between spouses); charity exemption; annual exemption (£3,000 per year); small gifts (£250 per donee); normal expenditure out of income; gifts in consideration of marriage; plus Business Property Relief and Agricultural Property Relief (up to 100% on qualifying assets).

When must inheritance tax on the death estate be paid, and when must the IHT account (IHT400) be delivered?

IHT is generally due by the end of the 6th month after the month of death; interest runs thereafter. The IHT account must be delivered within 12 months of the end of the month of death. Tax on certain assets (e.g. land, businesses) may be paid in 10 annual instalments.