Whether you’re a first-time buyer or a seasoned investor, navigating the real estate market requires careful consideration and strategic planning.

Here are our top five property tips to help you on your pursuit for the perfect property:

1 – Financial Arrangements

Whether or not finance is needed, speak to a broker early on in a transaction and preferably before your agent agrees on the main elements of the purchase.

Raising finance once the exchange has taken place, makes for a fraught completion experience for both you and your lawyer.

 

2 – Planning the Completion Date

If you are selling a property to raise money for your purchase, ensure that the completion date of the sale is on or before the completion purchase. This may sound obvious, but it will avoid surcharged rates of SDLT (Stamp Duty Land Tax) being paid at 3% above the standard rates. These rates are paid even where your main residence is being replaced with the Revenue requiring you to claim a rebate once the additional main residence is sold.

You can also avoid the need to use your cash reserves for a deposit, as a deposit held on your sale can be used for your purchase where the property is in England and Wales.

 

3 – Surveyor’s appointment

Appoint a surveyor. They will flag items that you may not necessarily have spotted on your brief viewing, such as issues like dampness, faulty wiring, etc.

By having the Surveyor identify these issues they can help you identify the necessary costs of repair, which can ultimately be used in negotiating the asking price from the seller.

 

4 – Your Lawyer

Make and keep a relationship with a lawyer and update them on your transaction. This is particularly important where you are marketing a property sale, to ensure that deadlines, that you or your agent impose, can be met by buyers. A full sales pack with all title deeds, up-to-date searches, planning and building information can be pulled together.

Plan for exchange well in advance. Weeks of delay can be avoided if all the fact-finding has been completed in advance. Attended exchanges do still occur so be prepared. If there are any title difficulties, these can be addressed in advance.

 

5 – Your Accountant

Take tax advice. You may not be a resident in the UK, you may own other properties worldwide or hold a portfolio of investment property. Early tax advice will be required to work out CGT (Capital Gains Tax) liability on sale and IHT (Inheritance Tax) liability on death.

SDLT matters will be more complicated, where other property is held and often a detailed assessment is required to determine the SDLT rates payable by you. Where your company owns the title to the property, ATED (Annual Tax on Enveloped Dwellings) charges will be made annually and your accountant will need to claim any exemptions in your annual tax return.

Final thoughts:

You may have very specific requirements which must be conveyed to all parties. You may want to access the property you are buying between exchange and completion with architects and builders to obtain quotes or for interior designers to start planning works. The seller may even agree to you commencing limited works to help you move forward with quickly with your plans.

Where you are buying a bolt hole which is a leasehold property, a landed estate owner may own the freehold, for example the Grosvenor or Portman Estate. Do not be surprised when you are asked for onerous references to obtain the landlord’s consent, in lieu of rent or service charge deposit.

If you are buying a turnkey, consider if there are any service charges for the shared estate roads and whether building warranties for any building works are available.

Where you are buying expensive items of furniture, artwork, electrical items, to be left at the property, a full inventory of those items with costings will need to be included. Such items do not attract SDLT but they must be justifiable in their costings.

To find our more about buying or selling your property, contact us here.

Understanding the Basics:

A will is a legal document that outlines how a person’s assets should be distributed following their death. Having a clear and comprehensive will is essential to ensure that your partner is properly taken care of and that your wishes are respected.

In many jurisdictions, if there is no will in place, the law dictates how assets are distributed. In the UK, this falls under the Intestacy Rules. This default arrangement may not align with your intentions, particularly when it comes to non-traditional family structures. Therefore, a will allows you to have control over who inherits your assets, including your partner.

Choosing the Right Executor:

An executor is the person responsible for carrying out the wishes outlined in your will. When selecting an executor, consider someone you trust implicitly, as this role involves handling financial matters and ensuring the proper distribution of assets. It is crucial to discuss this decision openly with your partner and ensure they are comfortable with your choice.

Guardianship for Children:

For couples with children, clearly stating your preferences for guardianship in your will is vital. This becomes especially important for same-sex couples, as legal recognition and protection for non-biological parents may vary. Clearly defining your wishes can prevent potential disputes and ensure the well-being of your children.

Protecting Your Partner:

In many countries such as the UK, marriage equality has granted same-sex couples the same rights as heterosexual couples. However, it is essential to stay informed about local laws and regulations, as they can vary. With global mobility on the increase and many people moving abroad for work or other considerations, this may potentially affect one’s place of relocation. If marriage is not an option or does not provide sufficient protection, legal documents such as a will or power of attorney become even more critical.

Regularly Review and Update:

Life is dynamic, and circumstances change. It is advisable to review and update your will periodically, especially after significant life events like marriage, the birth of children, or the acquisition of new assets. Ensuring that your will reflects your current situation will help avoid complications going forward.

Conclusion:

In the pursuit of love and happiness, legal matters should not be overlooked. Same-sex couples, like any other, can benefit greatly from thoughtful will and succession planning. By taking the time to understand and navigate these essential legal steps, you not only safeguard your partner’s future but also ensure that your wishes are respected and your legacy is preserved.

Sherrards is part of an international alliance of legal and accountancy firms, Alliott Global Alliance, represented in 96 countries and we can connect you with advisers if you are looking to move abroad.

To find out more, contact Nicole Marmor. 

All of this may prompt a pick-me-up for deal activity in both the commercial and residential sectors. There will also be a number of regulatory changes to keep up with in 2024, but with a general election on the cards, making accurate predictions of what will happen in the sector and what the legislation will end up looking like is probably best avoided.  What we can safely do is provide a rundown of some of the more significant developments in property law expected in 2024, with the finer details to be fought over in Parliament.

Leasehold and freehold reform

The Leasehold and Freehold Reform Bill will enable leaseholders to extend leases to up to 990 years, abolish marriage value and also limit ground rent. These changes will make it cheaper and easier for leaseholders to extend leases or buy the freehold or share of the freehold.

Renters reform

The Renters Reform Bill is likely to come into law this year, and it will make significant changes to the way in which landlords let properties to tenants.  This is the one promising the abolition of so called “no fault” evictions, but the reforms have been delayed due to the lack of a framework for the courts to deal with the proposed new eviction process.

Ending of lower residential stamp duty

The increase of the residential nil-rate tax threshold from £125,000 to £250,000 will end on 31 March 2025.  This means that buyers will go back to paying the full amount of stamp duty next year.  This may result in an increase in transactions towards the end of 2024 and the beginning of 2025, before the lower rate ends.

Building safety

The Building Safety Act 2022 brought in several measures intended to make buildings and residents safer, in light of the Grenfell tragedy.  In October, a number of measures were brought into law, which now relate to all projects, not just high-risk buildings.  The regime is complex and specialist advice should be sought when building or re-developing property.

Biodiversity net gain

Intended to ensure that development has a measurably positive impact, or “net gain” on biodiversity, developers must deliver a BNG of 10%. This means a development will result in a better quality natural habitat than there was before development. New BNG rules came into force for most new developments from January 2024. Draft regulations and government guidance were published at the beginning of December.          

To find out more, contact Chris Piggott or get in touch with law@sherrards.com. 

Moving job should be a straightforward matter, but more often than not employees either don’t have a copy of their most recent employment contract or, if they do have copy, don’t look at it for myriad reasons.

When an employee leaves, a good employer will typically arrange an exit interview with a leaver. This is an opportunity for the employer to run through a checklist of items that a leaver needs to deal with before they depart e.g. returning company property, handover of work. Employers should also use that meeting as an opportunity to remind a departing employee of their ongoing obligation of confidentiality and any restrictive covenants they are subject to. Collectively these obligations are commonly referred to as post-termination obligations.

However, so often when we are instructed, we discover that this has not happened, meaning that employee may be about to blithely embark on a new role with a direct competitor, may be setting up themselves in competition, may be contacting clients and contacts that are protected or contemplating poaching former colleagues. However, even if an exit interview does take place, an employee may have their own plans regardless.

Post-termination restrictions to watch out for

A well drafted employment contract will typically contain the following suite of post-termination restrictions:

• Non-compete – these clauses are inserted to prevent the employee from working for a direct competitor of their employer. A well drafted clause will normally home in what is meant by a direct competitor. These clauses may even go further and say that an employee cannot set up on their own and work in competition. (Check out the government website for more details) 
• Non-solicitation – a clause of this type will be included in the employment contract where the employer wishes to protect against its clients and contacts from being enticed away to work with the employee somewhere else.
• Non-poaching – this clause is designed to deter the employee from encouraging their former colleagues to leave their employment.
• Non-dealing – this restriction is sometimes inserted to widen the effect of the above covenants, so that a departing employee is prevented from soliciting or poaching, but also that they cannot even deal with / have contact with the people defined in those clauses.
• Confidentiality – this is an ongoing restriction that carries on in perpetuity. If well drafted, the clause will contain a concise list of information that is considered to be confidential and should not be utilised in any way by the employee.

Action points for employers and employees

If you’re an employer, ensure you have an exit interview/meeting with a departing employee. Make it clear to them what restrictions are going to apply to them after they leave and confirm it in writing to the employee.

Review your existing employment contracts and check that they contain appropriate and properly drafted post-termination obligations.

If you’re an employee, familiarise yourself with the terms of your contract and understand what you can and cannot do after leaving employment. If you are unsure, you could either take pre-emptive legal advice or seek clarification from your employer. Ensure that any clarification is in writing, so you can rely on it later if needs be.

If you’re an employer and you’ve discovered that an employee has left and is now acting in breach of their contract or you’re an employee that’s now being pursued by your former employer, please contact Aaron Heslop for a no obligation discussion.

Furthermore, if you’re looking to review your existing employment contracts, we would recommend a discussion with our Employment Team.

We took action to ensure that the Judgment was set aside and a solution reached, ensuring that the child was protected in terms of pastoral care and reputation of the child and the family more generally.

Sherrards acts for a number of schools, colleges, academies and academic institutions, including in relation to commercial, property and contentious matters as required.

For more information contact Paul Marmor, Head of Litigation & Dispute Resolution, or Jean-Paul da Costa, Head of our Commercial and Charities team.

The Rugby club, known for its facilities, faced a Covid-era-related dispute with another party regarding the maintenance of its facilities. This case, typical of pandemic-related claims, involved contractual obligations, cost accumulation, and force majeure considerations.

To find our more, or how our Dispute Resolution team can help you, contact Paul Marmor. 

What are the key take away points from the new Carer’s Leave Regulations?

 An employee will be entitled to take one week of unpaid carer’s leave in any 12 month period, where they have a dependant with a long-term care need and want to be absent from work to provide or arrange care for the dependant.

• Importantly, the right will be a Day one employment right. 
• Employees will have the option to take the carer’s leave on consecutive days, non-consecutive days, half days or full days.
• Employees must give written notice of their intention to take carer’s leave, confirming their entitlement to take it. The notice requirement will be at least twice as many days as the period of leave requested.
• Employers will have a right to postpone a request if they reasonably consider that the operation of the business would be unduly disrupted. The employer must give notice of the postponement before the leave was due to begin and must explain why the postponement is necessary. The employer must then permit the employee to take carer’s leave (of the same duration) on a date determined by the employer after consulting with the employee, which must be within one month of the start date of the leave originally requested by the employee.
• Employees will be protected from detriment and dismissal because they choose to take, or seek to take, carer’s leave (or the employer believes they are likely to do so).

To find out more, contact the Employment team or Head of the Department, Mark Fellows.

 

Paul Marmor, Partner and Head of Dispute Resolution & International, and Laurel Zhang, Head of China and South East Aisa Desk, recently met with Senior Partner Alex HY Leung of Leung and Co as part of the Alliott Global Alliance (AGA) international collaboration. This meeting was kindly hosted at the AGA offices in Convent Garden.

The meeting also included esteemed figures such as Giles Brake, CEO of the Alliott Global Alliance, and Qi He of Alliotts LLP.

Sherrards continue to attend and host meetings with our international partners through the Alliott Global Alliance and International Bar and American Bar Association as part of our commitment to establishing our global presence as well as highlighting our top-notch legal services that cross borders.

For more information, please contact paul.marmor@sherrards.com

The event was organised by Laurel Zhang, Head of China & Southeast Asia Group, and her connections with the Chinese Tax Specialists. Laurel is part of the Corporate & Commercial team, based in London and she speaks fluent Mandarin and English. She commented, “We provide a lot of support to companies looking to do business in the UK coming in from China, Hong Kong and across Asia and one of the key benefits we can provide is cultural and language support as well as plenty of experience operating in the region and discuss our experience with the delegation.”

The event began with an introduction from Paul Marmor, Head of International and Dispute Resolution, who introduced Sherrards, its history and each spokesperson from Sherrards for the morning. Paul then discussed the amazing history and importance of ‘The Honourable Society of the Middle Temple’ and how legal practitioners are split into Solicitors & Barristers within the UK. He informed the audience of how Sherrards is a member of the American Bar Association (ABA), the International Bar Association (IBA) and the Alliott Global Alliance (AGA) with Sherrards having individual desks for Germany, China, France, USA, and eastern-Europe. A truly global law Firm.

Jean-Paul da Costa, head of Corporate and Commercial, was the first to present to the group. He discussed the ways the Government use incentives like tax to influence the UK’s economy and how the government have several tax incentive schemes to influence investors such as the Seed Enterprise Investment Scheme (SEIS), the Enterprise Investment Scheme (EIS) and the Venture Capital Trusts Scheme (VCT). Jean-Paul also covered Tax breaks a tool to influence UK business activity. This included the Entrepreneurs Relief (Business Asset Disposal Relief) scheme, small businesses not being charged for VAT for the first £85,000, and the Corporate Venturing Scheme (CVS). He then discussed the methods the Government use to boost the economic activity of employees such as the Enterprise Management Incentives (EMI), Share Incentive Plans (SIPs) and the Employee Ownership Trusts (EOT) programs. The final area Jean-Paul spoke about was presenting a global perspective to show in what ways that UK economy is unique worldwide. He commented, “Much of Sherrards’ work is related to FDI (Foreign direct investment) to the UK with specialist teams focussing on IP (Intellectual Property), corporate & property (real estate) structures as well as litigation and we were only too happy to share our knowledge with the delegation”.

Aleksandra Rychlewska, Legal Assistant in the Litigation department, then gave a thorough explanation of the UK’s Legal System, informing the delegation of the four factors that make the UK legal system an attractive choice for international parties to resolve their commercial disputes. These included the expertise, specialisation, and independent judiciary that the UK possess, the tradition of the Common Law, the Enforceability of Judgements across jurisdictions and alternative dispute resolution options.

Guy Morgan, Partner in our Commercial Property department then gave a detailed description of the Commercial Property market in England with a summary of concepts in English Property law and the challenges that the UK economy face post-pandemic and with the economic and political climate, including issues like climate change & technological change. Guy then gave an overview of key property taxes such as the Stamp Duty Land Tax (SDLT) and Value Added Tax (VAT) to inform the audience on the UK’s tax system. Guy concluded his presentation with a ‘glimpse into the future’, which addressed the possible changes that 2024’s General election will bring to the UK.

The final spokesperson from Sherrards was Greg Pooler who gave a presentation on Disclosure and cross-border data transfers. He explained what disclosure is and its importance in law, along-side the Civil Procedure Rules (CPR) and how it influences legal practice in the UK. This was followed by examples of Sherrards past experiences with disclosure across jurisdictions including how Sherrards were advised on the Chinese regime and it’s three pillars – Data Security Law, The Personal Information Protection Law, and State Secrets Law. Greg then listed key UK laws and their influence; Data Security Law (Article 36), Personal Information Protection Law (Article 41) and the Securities Law (Article 25).

The event finished with a visit to the “Great Hall” and networking.

 

Inheritance tax

As a general rule assets of a deceased over the value of the nil rate band (currently £325,000) are chargeable at 40% inheritance tax.

The Acceptance-in-Lieu scheme (“AIL”)

Since 1910 the UK government has encouraged those administering estates, responsible for ensuring that the tax is assessed and paid, to consider offering works of art and important heritage objects to the nation in lieu of inheritance tax.

In addition to the advantage of being able to meet a tax liability in kind, the scheme offers a financial sweetener (known as the douceur) to provide an even greater incentive to make use of the scheme.

The criteria

The art or objects must be ‘pre-eminent’: in other words, of particular historic, artistic, scientific or local significance, either individually or collectively, or associated with a building in public ownership. A very wide range of objects is accepted each year as may be seen in the annual reports published by the Arts Council.

The art or objects must be in an acceptable condition.

The process

Offers must be made to the Heritage Team at HMRC. Those offers must be approved by the Secretary of State for Digital, Culture, Media and Sport (or the appropriate Minister in the devolved governments in Scotland and Wales) who is advised by Arts Council England’s AIL Panel. The AIL Panel consists of independent experts who seek specialist advice on the art or objects offered.

Key elements of any offer will be a valuation and justification for that valuation (generally independent opinion from more than one source is helpful); an explanation of why the object is considered pre-eminent; digital images and details of where the object can be inspected; evidence that the offeror has good legal title to the object (and details of its ownership between 1933-1945).

The douceur

In order to attract some of the finest works into national ownership the government offers a financial incentive to those administering estates. The sweetener consists of a 25% “cash-back” calculated against the inheritance tax that would normally have been due.

Example: Mr Gombrich’s estate contains an important Modern British work on paper. At date of death the piece was valued by an independent expert at £100,000. Mr Gombrich’s son is the sole residuary beneficiary and executor and decides to offer the painting in lieu of the inheritance tax liability of £40,000. The AIL Panel confirm the piece to be pre-eminent and agree a value of £100,000. The douceur is calculated as 25% of the inheritance tax due on the painting: 25% x £40,000 = £10,000. Gombrich junior receives £70,000 for the piece, the tax liability is cleared and the nation gains a pre-eminent work for the public to enjoy.

Conclusion

Every case will be different. The scheme offers an opportunity to make a not-insignificant tax saving whilst also having the benefit making the item(s) available for the appreciation of the general public. At the same time do bear in mind that there will be occasions when an item might achieve a better overall result (tax liability included) when sold on the open market (or indeed by a private sale). If you are considering your options I would be very pleased to advise.