Legacy Bulletin - February 2021

Date updated: Thursday 25th February 2021

Interpreting legacies to misdescribed charities and how to avoid the pitfalls

The recent High Court case of Knipe v The British Racing Drivers’ Motor Sport Charity and Ors [2020] EWHC 3295 (Ch) (examined below) highlighted the importance of ensuring that the charity a testator or testatrix intends to benefit is clearly identified so as to avoid any future disputes as to the validity of the legacy.

The case centred on two charities which did not exist being named as beneficiaries, with the High Court having to determine what the testator intended when he made his Will.

Discontinued Inheritance (Provision for Family and Dependants) Act 1975 claim permitted out of time - Wickham v Riley & others [2020] EWHC 3711 (Fam)

The recent High Court case of Wickham v Riley & others [2020] EWHC 3711 (Fam) highlights how the court can exercise its discretion when granting permission to bring a I(PFD)A 1975 claim out of time (s.4 I(PFD)A 1975) and as a further claim pursuant to CPR38.7. The case is a useful reminder of the issues a court will take into account when considering whether to grant a claimant’s application to bring a I(PFD)A 1975 claim out of time. A charity should consider each case on its facts when deciding whether it should contest a claimant’s application to issue a I(PFD)A 1975 claim out of time.

Back to basics: Capital Gains Tax

Capital Gains Tax (CGT) is a tax paid on the increase in value of an asset between the date it was acquired and the date it was sold.

When a person dies, their personal representatives (PRs) are deemed to have acquired the estate assets at their date of death value. If the PRs later sell those assets for a gain, there may be CGT to pay on the sale of those assets. Any gain will be calculated using the net value of the assets after deducting the costs of sale.

Meet the team: Luke Watson