Achieving vacant possession for our client.
Sherrards’ Real Estate Litigation and Residential teams worked together to help our client to get vacant possession.
Vacant possession means the property must be empty on the day you complete your purchase or sale of it.
The £5million property in Kensington had been sold subject to contract, however, there was a tenant in the property who was refusing to leave which was jeopardising the sale.
Proceedings were issued in the High Court.
Michael Lewis and his team worked hand in hand with our Residential Real Estate department in order to provide vacant possession and a successful outcome for our client and the sale of their property.
The case of the stolen multi-million-pound yacht
The deceased was accused of professional negligence and being part of a conspiracy to defraud in relation to the sale and purchase of a multi-million-pound yacht.
The Sherrards Dispute Resolution and Fraud department successfully challenged the claim, which was rightfully dismissed.
There was no suggestion of any wrongdoing on the part of the deceased, whose reputation was and remains protected.
The team defended this multi-million-pound fraud matter.
To find out more, please contact Paul Marmor.
Buying Real Estate in the UK
The first stage for an investor or owner occupier will be ascertaining the area to invest in and ultimately locating the property to purchase.
When viewing properties in the UK, you should be aware of the legal way in which you are able to hold a property. You will either obtain the freehold of the property, which includes the whole of the building and will allow you the freedom (subject to any landed estate retaining restrictions over the property and any local council requirements) to make alterations and improvements as you so wish.
The alternative way of holding a property by way of leasehold interest, either a new lease will be granted to you (usually on a new build property) or assigned over to you from the existing owner. The terms of leases are usually 99 years, 125 years or 999 years and the balance of the term will be transferred to you. This will mean that although you have a long-term interest in the property, you do have a landlord who owns the freehold building. You will be subject to service charges and ground rents, paid to the landlord and it is imperative that your advisor provides you with such details of not only current expenditure but planned future expenditure. These are additional charges that should be borne in mind, particularly when viewing an up market and exclusive development with shared facilities such as a gymnasium or swimming pool. You also need to investigate whether the building is properly managed.
If you are purchasing a leasehold property, when you view the property you need to look out for any improvement works required to the building as a whole, as you will be responsible via your service charges to contribute towards the cost of these items. If the internal elements of the property require internal upgrading, then depending on the terms of the lease, landlord’s consent may be required. In addition, the alteration works will require consent from the local council.
Tax advice should be obtained at the outset, to consider the most tax efficient purchasing vehicle due to the additional SDLT and ATED charges in place. Consideration of personal tax structures and whether the individual is to be based offshore will be required.
It is prudent to consider any requirements in respect of timings and when a seller will require you to commit to a contract and then legally complete. It is increasingly the norm for exchange to be required quickly and a non-refundable deposit payable to ensure exclusivity, with completion to take place soon thereafter. This may impact on financing arrangements and the speed of which funds can be transferred and lending facilities put in place.
What is clear is the greater the value of the asset, the greater the need for sound real estate and tax advice. Please do contact us so that we can assist you with your needs in the UK residential market.
To find out more, click here to speak to Residential Property Partner Caroline Vernon.
The Trust Register-Do you know your duties if you are dealing with the administration of an estate?
In October 2020, amendments to the Money Laundering Regulations came into force introducing new rules extending the scope of The Trust Register (TRS) so that it applies to a wider range of trusts, both based in the UK and some non-UK Trusts regardless of whether or not the trust is liable to pay tax.
Relevant trusts must register with TRS if they are liable to UK taxation in any year.
Although estates themselves are not subject to registration, in some instances Personal Representatives will need to register the estate, for example, if they are selling property worth £500,000 or more. Bearing in mind local property prices, many Personal Representatives may be caught and may be unaware of their obligations.
There are deadlines for registration of new and existing trusts; for existing non-taxable trusts that have not yet been registered this is 1 September 2022.
Trustees are also required to ensure the TRS is kept up to date, and again there are deadlines for doing so.
Types of trusts
The most common type of trust that needs to be registered is an “express trust”. These include bare trusts, discretionary trusts, interest in possession trusts (if created on death they are excluded from registration for two years as with other will trusts), protective trusts, pilot trusts (often set up to receive pension benefits) created before 6 October 2020 containing more than £100, and pilot trusts created after 6 October 2020 regardless of amount held.
Charitable trusts and Child Trust Funds do not have to register. Bereaved minor trusts and statutory trusts (created on an Intestacy) do not have to register as an express registrable trust but may have to register if they have a UK tax liability.
For trusts relating to land, eg where two or more people have bought a property together, where the Trustees and Beneficiaries are the same people, there is no requirement to register. However, if there is a Declaration of Trust in place and the Trustees/Legal Owners of the property are not the same as those with a beneficial interest then the trust is required to register.
This may occur where a third party has lent monies to assist with a property purchase and wishes to protect their investment, or, for example, children have assisted their parents to purchase a property under the Right to Buy Scheme.
Trusts for retirement policies are excluded from registration during the lifetime of the person assured provided that the policy only pays out on their death, terminal illness, critical illness or permanent disablement, or to meet the cost of healthcare services.
The information required by the TRS can be submitted online and the type of information required depends on whether the Trustees and Settlors (the person or people creating the trust) are individuals or a business or organisation, such as a charity.
Trusts with a UK tax liability need to provide more extensive information, including details of the trust assets as part of the annual tax return.
There are penalties for failing to provide the information required by the appropriate deadlines. However, given difficulties with both registering new trusts and updating the register, and a recognition that the last tax year was the first year that trustees have been able to meet their obligations, HMRC had indicated that they will not automatically be charging penalties. However, it is not clear how long this honeymoon period will last.-HMRC has certainly not been lenient on penalties in relation to late reporting of capital gains on UK properties.
If you are the Trustee or Settlor of a trust created at any time or you are dealing with an estate especially one where there is a property to be sold, and you are uncertain as to whether the new rules apply to you, please contact Sherrards and our trust experts will be happy to guide you in the right direction.
To find out more, please contact Private Client Partner Nicole.
Top tips when buying property
Here are our top five tips to help you:
Whether or not finance is needed, speak to a broker early on in a transaction and preferably before your agent agrees the main elements of the purchase. Raising finance once 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 of the purchase. This may sound obvious but it will avoid surcharged rates of SDLT 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. He or she will flag items that you may not necessarily have spotted on your brief viewing and may even give some bargaining power and leverage on the price.
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 for 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 in advance.
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 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 your 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.
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 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 a rent or service charge deposit.
If you are buying a turn key, 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.
Sherrards Recruitment team help client with breach of restrictive covenant battle
The team issued High Court proceedings with an injunction hearing which was successful.
Barney Laurence and his team were able to secure default judgment avoiding significant expenditure for ongoing legal proceedings for our client which they would have stood little to no prospects of recovering from the former employee.
Sherrards support New York law firm with a Commercial High Court Claim
The Court found that materials produced in the course of discovery (following an order in the States), could be used in an arbitration being held in London against Dreymoor Fertilisers Overseas PTE Ltd. Discovery had been obtained in order to assist the claimants in pursuing proceedings in multiple jurisdictions.
The judgment paved the way to allow the discovery to be put into evidence.
Click here for the full Judgment.
Sherrards Residential Real Estate team complete £5.4m London purchase
The team advised on a statutory lease extension request, with retrospective licence for alterations as well as other leasehold complexities. They also dealt with a third-party lender’s solicitors which was all dealt with and exchanged in a narrow timeframe for our client.
Mr and Mrs K said “A Great Move. The residential team worked very effectively to unwind a difficult set of circumstances to complete a tricky house purchase”.
Sherrards advise European logistics company with an international boardroom dispute
One of the founders and principal shareholders sought to declare unilateral independence and break away from the company. They were in breach of all covenants, restraint of trade and the shareholder agreement, to set up a rival organisation and attempt to take over a number of the company’s overseas offices, staff and clients.
This led to High Court proceedings supported by injunctive relief on a global scale. The team were successful and the case was settled in our clients favour and their client base was protected.
To find out about more similar case, please contact Paul Marmor.
OneSky Flight acquires helicopter booking service
OneSky Flight has a large aviation portfolio providing the industry’s leading private jet travel solutions. The deal allowed our client to expand its airline booking service into helicopters as a complimentary business providing their customers with a complete aircraft travel solution.
To find out about similar cases, please contact Leigh Head.