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Inheritance Act claims and letters of wishes: Managing risk in estate planning

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Even a carefully drafted will does not always bring matters to an end. The Inheritance (Provision for Family and Dependants) Act 1975 allows certain people to apply to the court for financial provision if a will or the intestacy rules fail to make reasonable provision for them. One practical way to reduce the risk of disputes is to use a well-thought-out Letter of Wishes. This article explains how the 1975 Act works, who can bring a claim, and how Letters of Wishes can help provide clarity and context after death.

When a will is not the end of the story

Many people assume that once a valid will is in place, their estate will be distributed exactly as they intended. In reality, that is not always the case. UK law recognises that strict adherence to a will can sometimes produce unfair outcomes, particularly where someone was financially dependent on the deceased or where family circumstances are complex.

The Inheritance (Provision for Family and Dependants) Act 1975 addresses this. It allows the court to step in and adjust how an estate is distributed in certain circumstances. Understanding how the Act operates and how tools such as Letters of Wishes fit into estate planning can help reduce uncertainty and the risk of disputes.

What is the Inheritance (Provision for Family and Dependants) Act 1975?

The 1975 Act applies in England and Wales. It allows eligible individuals to apply to the court for financial provision from an estate if the will, or the intestacy rules, fail to make “reasonable financial provision” for them.

Importantly, the Act can apply whether or not the deceased left a will. This means that even a professionally prepared Will can still be challenged if someone falls within a qualifying category and can demonstrate that reasonable provision has not been made.

Who can make a claim and on what basis?

Not everyone can challenge a will under the 1975 Act. The right to apply is limited to specific categories of people, including spouses, civil partners, former spouses or civil partners who have not remarried, long-term cohabitants, children, those treated as children of the family, and people who were being financially maintained by the deceased.

The court also distinguishes between different types of claimants. A surviving spouse or civil partner can ask for provision that is reasonable in all the circumstances, whereas other applicants are limited to what is reasonable for their maintenance.

Time limits and practical risks for estates

One of the most critical practical points under the 1975 Act is timing. Claims must usually be issued within six months of the Grant of Probate or Letters of Administration being issued. While the court does have discretion to allow late claims, this should never be relied upon.

This time limit creates risk for executors and beneficiaries alike. Executors who distribute an estate too quickly may expose themselves to personal liability, while beneficiaries may face uncertainty if a claim is intimated late in the process.

What is a Letter of Wishes?

A Letter of Wishes is a separate, informal document that sits alongside a will. Unlike a will, it is not legally binding. Instead, it explains the rationale for certain decisions and provides guidance to executors or trustees on how to exercise discretion.

Because a Letter of Wishes does not have to meet the strict formalities of a will, it can be updated more easily. It can include personal or sensitive explanations that a testator may not wish to include in the will itself.

How Letters of Wishes can help in Inheritance Act claims

Although a Letter of Wishes cannot prevent someone from bringing a claim under the 1975 Act, it can still be highly influential. Courts often seek to understand why a testator made particular choices, especially when a close family member has been excluded or left a smaller share.

A well-drafted Letter of Wishes can demonstrate that potential claimants were considered, explain the background to family relationships, and show that decisions were deliberate rather than accidental or unfair. This context can be critical in blended families or where financial provision has already been made during the testator’s lifetime.

What a Letter of Wishes should, and should not, include

For a Letter of Wishes to be effective, it needs to be clear, specific and kept up to date. It should explain decisions calmly and rationally, address any foreseeable disputes, and reflect the testator’s circumstances at the time it was written.

What it should not do is attempt to rewrite the will, make unrealistic demands, or include inflammatory language. An outdated or poorly drafted Letter of Wishes can sometimes do more harm than good.

Limitations and common misunderstandings

It is important to be clear about what Letters of Wishes can and cannot achieve. They do not override a will, they do not bind the court, and they cannot block a claim under the 1975 Act. They are a supporting tool, not a substitute for proper estate planning.

Relying on informal documents alone, without considering the legal risks created by family circumstances or financial dependency, can leave estates exposed to challenge.

Final thoughts: planning for people, not just assets

Estate planning is about more than deciding who gets what. It is about recognising relationships, managing expectations, and reducing the risk of conflict after death. Understanding how the Inheritance (Provision for Family and Dependants) Act 1975 works, and using tools such as Letters of Wishes thoughtfully, can help bring clarity and reassurance for everyone involved.

Regularly reviewing wills and supporting documents as circumstances change remains one of the most effective ways to avoid disputes and protect those you care about.

About the Author

James McMullan is a Partner and also heads up our Private Client team. James started his career as a family lawyer, but over the years, his practice has grown to encompass all aspects of private client law, including estate planning, Inheritance Tax, lasting powers of attorney, lifetime gifts, living wills, mental capacity issues, probate and contentious probate, trusts and, of course, wills.

James prides himself on spending sufficient time with clients at the outset of a matter to fully understand their position, needs, and objectives. He is committed to resolving disputes effectively, frequently using alternative dispute resolution (ADR). Given its costs and uncertainty, court litigation is a last resort.

Transactional documents in a corporate sale: What sellers should know

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Once the majority of the due diligence process has been completed to the satisfaction of both parties and there is mutual agreement to proceed, the focus shifts to the preparation and negotiation of the transactional documents. These documents form the legal backbone of the deal and are essential to ensure the transaction is properly executed and that both parties are protected.

Key Transactional Documents

The primary documents for a share sale is the Share Purchase Agreement (SPA) and for an asset sale an Asset Purchase Agreement (APA), typically drafted by the Buyer’s legal advisers. However, the SPA or APA rarely stands alone, and it is accompanied by several ancillary documents, each serving a specific purpose in the transaction.

1. Share Purchase Agreement

The SPA is the central contract that governs the sale and purchase of shares. Its main functions include:

  • Recording the commercial terms of the transaction (e.g. price, payment structure, completion date)
  • Setting out conditions precedent to completion (e.g. regulatory approvals, financing)
  • Detailing representations and warranties made by the Seller about the target company.
  • Including restrictive covenants, such as non-compete clauses, to protect the Buyer post-completion.

The SPA is heavily negotiated, with each party seeking to protect its interests and achieve the best commercial outcome.

2. Asset Purchase Agreement 

The APA, like the SPA, is the central contract that governs the sale and purchase of assets. Key provisions include: 

  • Recording the specific assets (or liabilities) to be transferred
  • Detailing the consideration, whether it is a combination of cash, shares or loan notes and the timing of payment of the consideration. 
  • Practical mechanics of how the assets are to be transferred, whether by formal transfer, assignment, or delivery

3. Disclosure Letter 

Prepared by the Seller’s legal advisers, the Disclosure Letter is a critical document that qualifies the warranties given in the SPA or APA. It contains:

  • General disclosures (e.g. public records, known facts)
  • Specific disclosures against individual warranties

The purpose of the disclosure letter is to limit the Seller’s liability. If a warranty is found to be untrue but has been properly disclosed, the Buyer may not be able to claim for breach of warranty.

3. Tax Covenant

If not included within the SPA, a separate Tax Covenant may be drafted to allocate responsibility for pre-completion tax liabilities. This is particularly important in deals involving complex tax structures or international elements.

4. Stock Transfer Form(s)

Contrary to common belief, the SPA does not transfer legal title to the shares. The Seller must deliver a duly completed and executed stock transfer form for the target shares. The transfer must then be approved and registered by the target company’s board post-completion.

5. Other ancillary documents

The transfer of ownership of an asset is dependent on the type of asset it is. For example, this could include property transfers or lease assignments, assignments or novations of contracts, and assignments of IP. 

In addition, certain assets that are being sold may be subject to third-party security, such as a debenture, and this will need to be released so that the asset can be transferred. 

6. Security Documents (if applicable)

Where part of the consideration is deferred, or there is a split between exchange and completion, or the buyer wants security for breach of warranty, security documents may be required to protect the party seeking the security. These can include:

  • Debentures over the target company’s assets
  • Charges over shares of both the Buyer and the target company
  • Personal guarantees from the Buyer, the Seller or its directors

Negotiation and Execution

Each document is reviewed and negotiated by the parties and their advisers. Amendments are made to reflect commercial agreements, manage risk, and ensure legal compliance. Once all documents are finalised, the parties proceed to sign and complete the transaction.

Transactional documents are more than just formalities; they are the legal instruments that bring a sale to life. Understanding their purpose and implications is essential for both Buyers and Sellers. With careful drafting and negotiation, these documents help ensure a smooth transaction and protect the interests of all parties involved.

How can we help?

Clear transactional documentation is essential to achieving a clean sale and avoiding disputes later. We guide clients through the negotiation of the SPA or APA and all related documents, including disclosure and tax provisions, transfer mechanics and any required consents. We focus on getting the details right while keeping the process pragmatic and commercially driven. Speak to our head of corporate and commercial, Victoria Holland, today.

About the author

Zarenna Porter is a solicitor in the Corporate and Commercial department. Her work spans a wide range of corporate and commercial matters, including acquisitions and disposals, share buybacks, company reorganisations and the drafting and negotiation of commercial contracts and agreements. She has supported businesses operating across different sectors, tailoring her advice to suit the distinct needs of both sole traders and larger corporate entities.

Planning for the future: What to include in a UK shareholders’ agreement

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UK shareholders’ agreement

A shareholders’ agreement is one of those documents that often feels unnecessary at the outset, when everyone involved is aligned and optimistic about the future. In practice, it can be one of the most important documents a company ever puts in place. A well-drafted agreement sets clear ground rules for how the company is run, how decisions are made, and what happens when circumstances change.

This article examines the key provisions typically included in a UK shareholders’ agreement and explains why they matter.

The role of a shareholders’ agreement

A shareholders’ agreement is a private contract between some or all of a company’s shareholders. It sits alongside the company’s Articles of Association and addresses matters that are often too detailed, too commercial, or too sensitive to include in the Articles. Its purpose is to provide clarity, manage expectations, and reduce the scope for disputes as the business grows or changes.

Company management and governance

Most agreements begin by addressing how the company is managed and how key decisions are made.

Decision-making provisions typically distinguish between matters the board can handle and those that require shareholder approval. Reserved matters often include issuing new shares, selling major assets, borrowing above agreed limits, or changing the nature of the business. It is common for these decisions to require a higher voting threshold, such as a supermajority, rather than a simple majority.

The agreement will also set out how directors are appointed and removed, whether particular shareholders are entitled to nominate a director, and how board seats are allocated. It will often cover director remuneration, service contracts, and decision-making at board level to ensure transparency and consistency.

Share ownership and transfer of shares

Rules governing share ownership and transfers are at the heart of most shareholders’ agreements.

Restrictions on transfers are used to prevent shares from being sold to third parties without the consent of the existing shareholders. Pre-emption rights are fundamental, giving existing shareholders the first opportunity to purchase shares offered for sale or newly issued, helping to prevent unwanted dilution or changes in control.

Drag-along and tag-along rights are also common. Drag-along provisions allow the majority shareholders to compel minority shareholders to sell their shares on the same terms as the company’s sale. Tag-along rights protect minority shareholders by enabling them to join a sale and exit on equivalent terms.

Leaver provisions address what happens when a shareholder leaves the business due to resignation, retirement, death, illness, or insolvency. These clauses often distinguish between good leavers and bad leavers, with different valuation outcomes depending on the circumstances. Closely linked to this are valuation mechanisms, which set out how shares will be valued in various scenarios, helping to avoid disputes at a difficult time.

Financial arrangements

Financial provisions help ensure that everyone understands how the company will be funded and how returns are distributed.

Funding clauses set out how additional capital will be raised, whether shareholders are obliged to contribute, and what happens if someone cannot or will not do so. Dividend policy provisions specify when profits may be distributed and whether profits are likely to be retained for growth.

In some companies, particularly those with external investment, liquidation preference clauses may be included. These clauses determine who is paid first and in what order if the company is sold or wound up.

Protecting shareholders

A shareholders’ agreement often includes specific protections for minority shareholders. These may include veto rights over certain key decisions, enhanced voting rights, or additional consent requirements to prevent unfair prejudice.

Information rights are another essential protection. These provisions ensure that shareholders receive regular financial information, management accounts, and updates on the company’s performance, even if they are not involved in day-to-day management.

Restrictive covenants

Restrictive covenants are designed to protect the business if a shareholder becomes involved with a competing venture. Non-compete and non-solicit clauses may apply during a shareholder’s ownership and for a defined period after the shareholder exits. These clauses must be carefully drafted to ensure they are reasonable and enforceable under UK law.

Dealing with disputes and deadlock

Even with the best intentions, disagreements can arise. Deadlock provisions are critical when shareholdings are evenly split. These clauses set out mechanisms for resolving impasses, such as escalation procedures, mediation, or structured buy-out options.

Many agreements include alternative dispute resolution clauses that require mediation or arbitration before court proceedings can begin. This can save time, reduce costs, and prevent damage to business relationships.

Why taking the time matters

A well-structured shareholders’ agreement can prevent disputes before they arise, protect investments, and provide a clear framework for addressing exits and unexpected events. It allows shareholders to agree the rules of engagement while relationships are strong, rather than trying to resolve issues in the heat of a dispute.

Because every business and shareholder group is different, shareholders’ agreements should be tailored to the specific company and its objectives. Anyone considering putting one in place or reviewing an existing agreement should consult their solicitor to ensure the document accurately reflects their interests and is consistent with the company’s Articles of Association.

Understanding Court of Protection applications in England and Wales

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Court of Protection

When someone can no longer make decisions for themselves and has not put a Lasting Power of Attorney in place, the Court of Protection can step in. Applications to the Court of Protection allow decisions to be made about a person’s finances, property, health or welfare, either on an ongoing basis through a deputyship or for a specific, one-off issue. This article explains what the Court of Protection does, when an application may be needed, and what the application process entails.

What is the Court of Protection?

The Court of Protection is a specialist court in England and Wales. It makes decisions for adults aged 16 and over who lack the mental capacity to make certain decisions for themselves. Mental capacity is assessed in accordance with the Mental Capacity Act 2005, which sets out the legal framework for decision-making on behalf of vulnerable adults.

The Court’s role is not to take control unnecessarily, but to ensure that decisions are made lawfully, proportionately, and in the individual’s best interests. The person at the centre of proceedings is referred to as “P” in court documents.

When might an application be necessary?

An application to the Court of Protection is usually a last resort. In many cases, it can be avoided if the individual made a valid Lasting Power of Attorney while they still had capacity. Where no such arrangements exist, the Court can step in to provide authority and clarity.

Applications are commonly made where decisions are required about:

  • Mental capacity, for example, where there is disagreement about whether P can make a particular decision.
  • Property and financial affairs, such as managing bank accounts, paying bills, or selling a property.
  • Health and welfare, although these deputyships are less common and usually limited to specific circumstances.
  • One-off decisions, including statutory wills, large gifts, or authority to complete a particular transaction.
  • Urgent or emergency situations, such as time-sensitive medical treatment or safeguarding concerns.
  • Disputes, where family members or professionals cannot agree on what is in P’s best interests.

Who can apply to the Court of Protection?

Anyone aged 18 or older can apply to be a deputy, although most applicants are close family members or trusted friends. In some cases, particularly where finances are complex or there are disputes, a professional deputy, such as a solicitor, may be appointed.

Whoever applies must be suitable for the role and willing to take on the responsibilities that come with acting under the Court’s authority.

The application process explained

Applying to the Court of Protection involves several formal stages and can take several months from start to finish.

Preparing the application

The application begins with completing the relevant court forms. These usually include:

  • COP1, the main application form.
  • COP3, a capacity assessment completed by a medical professional or other suitably qualified person.
  • COP4, the deputy’s declaration, confirming their understanding of the role and duties.

For property and financial affairs applications, additional financial information is required using COP1A, which details P’s assets, income, and liabilities.

Submitting the application and paying the fee

Once the forms are completed, they are submitted to the Court, along with the application fee. The fee is currently around £400, although fee reductions or exemptions may be available, depending on P’s financial circumstances.

Notifying P and others

After the Court issues the application, the applicant must formally notify P and at least three other people with an interest in P’s welfare. This is a key safeguard, allowing those notified to raise concerns or objections within a set period, usually 14 days.

Court consideration and possible hearings

Once the notification period has passed, the Court reviews the application. In straightforward cases, a decision may be made on the papers. If there are objections, complex issues, or disputes, the Court may request further information or schedule a hearing.

The court order and security bond

If the application is approved, the Court issues an order setting out what the deputy is authorised to do. Before the order becomes final, the deputy may be required to arrange a security bond. This serves as insurance to protect P’s finances against misuse or mismanagement.

Responsibilities after appointment

Once appointed, a deputy must always act in P’s best interests and within the limits of the Court order. The Office of the Public Guardian supervises deputies and must submit annual reports explaining their decisions and how P’s money or welfare has been managed.

The role carries significant legal responsibility, and deputies can be held accountable if they fail to fulfil their duties.

Court of Protection applications are detailed, document-heavy, and tightly regulated. Errors or omissions can lead to delays, additional costs, or the application being refused. For that reason, many applicants choose to work with a solicitor experienced in Court of Protection matters.

A solicitor can advise on whether an application is necessary, help prepare the paperwork, manage the notification process, and guide deputies on their ongoing responsibilities. If you are considering an application, speaking to your solicitor at an early stage can clarify the process and make it more manageable.

About the Author

James McMullan is a Partner and also heads up our Private Client team. James started his career as a family lawyer, but over the years, his practice has grown to encompass all aspects of private client law, including estate planning, Inheritance Tax, lasting powers of attorney, lifetime gifts, living wills, mental capacity issues, probate and contentious probate, trusts and, of course, wills.

James prides himself on spending sufficient time with clients at the outset of a matter to fully understand their position, needs, and objectives. He is committed to resolving disputes effectively, frequently using alternative dispute resolution (ADR). Given its costs and uncertainty, court litigation is a last resort.

Warranties and indemnities: Key protections in share and asset sales

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Warranties and indemnities

When a Buyer identifies potential risks during due diligence, they often seek additional contractual protections. These protections typically take the form of warranties and indemnities, which are key provisions in a Share Purchase Agreement (SPA) or Asset Purchase Agreement (APA).

What is the difference between warranties and indemnities?

A warranty is a statement of fact about the company, or an asset given by the Seller whereas indemnities are specific promises to reimburse the Buyer pound for pound for a known risk. 

Therefore, the inclusion of an indemnity offers a more direct and certain remedy without the Buyer needing to prove causation and loss. 

For a Buyer to bring a successful breach of warranty claim they will need to show that the statement made the Seller was untrue, that the Seller did not make an adequate disclosure as such there has been a breach and that the breach directly caused a specific financial loss or reduction in value in the shares or assets. The Buyer will also need to demonstrate mitigation of loss. 

Therefore, you can see that buyers prefer indemnities over warranties.

Common areas of warranty protection

As the Buyer solicitor usually produces the draft SPA or APA, following due diligence and consultation with the Buyer, the solicitor will be able to tailor the warranties accordingly. For example, if a company or business has no IP, a single warranty confirming this may suffice as opposed to pages of irrelevant IP warranties. 

The following non-exhaustive list is areas likely to be covered in most acquisitions:

  • Accounts: the Buyer will want to see the latest audited accounts and will want the Seller to confirm that the audited accounts give a true and fair view. 
  • Financing and banking: Buyers will also require appropriate warranties concerning the target’s banking facilities, security documents, bank accounts and compliance with existing loan agreements.
  • Real property: the approach to property warranties depends on the bargaining power of the parties. Buyers can opt to fully investigate the properties and accept limited warranties from the Seller, or have a limited investigation into the properties and expect the Seller to provide many warranties. 
  • Commercial Contracts: the issues to be addressed include requiring the Seller to disclose all material contracts, whether contracts are terminable as a result of the change of control or that no notices have been received purporting to terminate any material contracts. 
  • Insurance: typical warranties require that all assets have, at all material times, been insured in accordance with industry practice and at their usual replacement value. That there are no outstanding insurance claims and that there is no reason any insurance cover might be avoided. 
  • IP: this depends on the nature of the business or the assets and what risks may arise should the Buyer not acquire the IP it needs. 
  • Tax: SPAs in particular tend to include extensive tax warranties. On an asset sale, the tax warranties tend to be more limited as the Buyer is not assuming the Seller’s ongoing corporation tax liabilities. 

Limiting liability

Sellers generally seek to limit their exposure under warranties and indemnities, often invoking the principle of caveat emptor (“buyer beware”). Common limitations include:

  • Financial Thresholds:
    • De Minimis: this is a Sellers way to exclude very small claims to avoid disruption.
    • Basket: requires the aggregate claims to exceed a minimum threshold before action can be taken.
  • Caps: Sellers often cap liability at or below the purchase price. It is unlikely that a Seller will agree for its exposure to exceed this.
  • Time Limits: Restrictions on how long claims can be brought after completion.

These thresholds and caps are heavily negotiated between the parties.

Securing for breach of warranty

Warranties and indemnities can be powerful tools for Buyers, but they are only as valuable as the party giving them. If a Buyer is concerned about a Sellers ability to meet claims or make enforcement difficult or impossible, a Buyer may wish to ask for security.

It is likely that any security sought would have been discussed and agreed between the parties at the Heads of Terms stage, and a Seller may be reluctant to agree to provide security at this point in the transaction. 

Some typical methods of security (which are like those taken by sellers to secure instalments of deferred consideration):

  • A bank guarantee or a guarantee from the seller’s parent company
  • Escrow account or retention.
  • Set-off 

Summary 

Warranties and indemnities are critical in share and asset sales. Sellers must understand the scope and implications of the warranties they provide, while Buyers should ensure these protections align with identified risks.

How can we help?

Warranties and indemnities are often where risk allocation is negotiated in detail. We advise on drafting, negotiating and structuring these protections so they align with the due diligence findings and the commercial position of the parties, including limitations on liability and, where appropriate, options for security. Our aim is to ensure the protections are clear, proportionate and enforceable in practice. Speak to our head of corporate and commercial, Victoria Holland, today.

About the author

Zarenna Porter is a solicitor in the Corporate and Commercial department. Her work spans a wide range of corporate and commercial matters, including acquisitions and disposals, share buybacks, company reorganisations and the drafting and negotiation of commercial contracts and agreements. She has supported businesses operating across different sectors, tailoring her advice to suit the distinct needs of both sole traders and larger corporate entities.

Dilapidations explained: What commercial tenants and landlords need to know

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commercial lease document

Dilapidations are a common source of dispute at the end of a commercial lease. They can involve significant sums of money and often come as an unwelcome surprise to tenants who believed they had left a property in reasonable condition. Understanding what dilapidations cover and how claims are assessed is essential for both landlords and tenants navigating the end of a lease.

At their core, dilapidations are about whether a tenant has complied with their lease obligations regarding the property’s physical condition. What a landlord can legitimately claim, and what a tenant is required to put right or pay for, depends almost entirely on the wording of the lease.

What Are Dilapidations?

Dilapidations are breaches of a tenant’s repairing, decorating, reinstatement, or statutory compliance obligations under a commercial lease. These breaches are usually identified when a lease is nearing its end or has already expired, although interim claims can sometimes be made during the term.

A landlord may either require the works to be carried out by the tenant before the lease ends or recover the cost of carrying out those works themselves once the tenant has vacated.

Repair Obligations Under the Lease

Most commercial leases require the tenant to keep the property in repair. The extent of that obligation can vary widely. Some leases impose a full repairing obligation, meaning the tenant must put the property into good repair and keep it in good repair, regardless of its condition at the start of the lease. Others limit the obligation by reference to the property’s initial condition.

Repair does not only relate to major structural issues. It can also include worn flooring, damaged ceilings, broken fixtures, defective services, or deterioration due to lack of maintenance. Whether something constitutes disrepair rather than fair wear and tear is often a key point of dispute.

Redecoration Requirements

Commercial leases commonly require tenants to redecorate the property at specified intervals and again at the end of the lease. These obligations may apply only to internal areas or extend to external areas of the building, depending on the lease terms.

Failure to carry out required redecoration works can form part of a dilapidations claim, even if the property is otherwise in reasonable condition.

Reinstatement of Alterations

Tenants frequently carry out alterations to suit their business needs, such as installing partition walls, additional cabling, signage, or kitchen facilities. Leases often require the tenant to reinstate the property to its original layout at the end of the tenancy.

Where alterations were carried out under a licence for alterations, that document will usually set out specific reinstatement obligations. If reinstatement is required but not carried out, the landlord may include the cost of those works in a dilapidations claim.

Compliance With Statutory Requirements

Many leases place the responsibility on the tenant to ensure the property complies with relevant statutory requirements throughout the term. This can include obligations relating to fire safety, asbestos management, electrical testing and other health and safety regulations.

If compliance has not been maintained, remedial works or investigations may be included in a dilapidations schedule, even if the tenant was unaware of the issue during occupation.

The Dilapidations Process in Practice

The process typically begins with the landlord or their surveyor preparing a schedule of dilapidations. This document sets out the alleged breaches of the lease and identifies the remedial works required and may also include estimated costs.

If the tenant fails to complete the works before the lease ends, the landlord may pursue a monetary claim for damages. This is often referred to as a quantified demand and may include the cost of the works, professional fees, and, in some cases, loss of rent.

Limits on a Landlord’s Claim

The law places an essential restriction on dilapidations claims for disrepair. Under section 18(1) of the Landlord and Tenant Act 1927, damages are capped at the amount by which the disrepair has reduced the value of the landlord’s interest in the property.

This means a landlord cannot automatically recover the full cost of repairs if the works would not increase the property’s value. For example, where a building is to be redeveloped or substantially altered, the impact of disrepair on value may be minimal.

The Importance of a Schedule of Condition

One of the most effective ways for tenants to limit dilapidations exposure is to agree a schedule of condition at the start of the lease. This is usually a photographic record of the property’s condition at the commencement of the lease.

When properly incorporated into the lease, a schedule of condition can limit the tenant’s repairing obligations, so the tenant is not required to put the property into a better condition than it was at the outset.

Managing Risk and Avoiding Disputes

Dilapidations are highly technical and often require both legal and surveying expertise. Early engagement, careful review of lease obligations and realistic negotiation can make a significant difference to the outcome.

Whether acting as a landlord or a tenant, obtaining advice from a solicitor at an early stage can clarify obligations, assess risk, and avoid unnecessary costs and disputes as a lease comes to an end.

About the author

Brinda Granthrai joined RIAA Barker Gillette (UK)’s commercial real estate team in May 2025. She brings over 15 years of experience advising high-net-worth individuals, private companies and international investors on complex real estate transactions. She works closely with the team to deliver commercially focused, pragmatic solutions across the full property lifecycle.

The role of due diligence in corporate transactions

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magnifying glass and papers

In the world of corporate transactions, the term due diligence is frequently used, but its meaning and importance can sometimes be overlooked. Due diligence is a critical phase that typically follows the agreement of Heads of Terms between the Buyer and Seller. It is the Buyer’s opportunity to investigate the target company or its assets in detail before committing to the purchase.

What is due diligence?

Due diligence is essentially an information-gathering exercise conducted by the Buyer to assess the true state of the target’s business or its assets. The goal is to verify whether the agreed purchase price accurately reflects the company’s or the assets’ financial health, legal standing, operational risks, and future prospects.

This process allows the Buyer to uncover any hidden issues that could affect the value or viability of the deal.

The Seller’s role in due diligence

While due diligence is led by the Buyer, the Seller plays a crucial role. The Seller must provide comprehensive and accurate documentation to support the Buyer’s review. This typically includes:

  • Financial records (e.g. audited accounts, management accounts, forecasts)
  • Legal documents (e.g. articles of association, shareholder agreements)
  • Material contracts (e.g. supplier, customer, lease agreements)
  • Employment information (e.g. contracts, benefits, disputes)
  • Intellectual property and compliance records
  • Real estate (e.g.  leases and title to property)

These documents are usually uploaded to a secure online data room, where the Buyer’s advisers can access and review them systematically.

The duration of due diligence can vary depending on the complexity of the target business and the responsiveness of the Seller. Delays in providing requested documents or resolving identified issues can extend the timeline, so early preparation is key.

Common issues uncovered during due diligence

Due diligence can reveal a range of issues, such as:

  • Undisclosed liabilities (e.g. pending litigation, tax exposures)
  • Outdated or non-compliant employment contracts
  • Inconsistencies in financial reporting
  • Missing or invalid intellectual property registrations

Identifying these risks early allows the Buyer to mitigate exposure, either by renegotiating the deal terms or requesting specific protections. 

How Buyers respond to findings

If the Buyer uncovers concerns during due diligence, they may:

  • Renegotiate the purchase price; or
  • Request indemnities to cover specific risks; or
  • Seek additional warranties in the Share Purchase Agreement (SPA) or Asset Purchase Agreement (APA).

These protections are designed to shift risk back to the Seller if certain issues materialise after completion.

The outcome of due diligence

Once the Buyer and their advisers are satisfied with the information provided, the transaction can progress to the next stage of finalising the SPA or APA. However, it is important to note that disclosure is an ongoing process. New information may continue to emerge and be addressed right up until the agreement is signed and if the Seller becomes aware of anything during the process which it thinks ought to be disclosed, such as pending litigation, it should make the Buyer aware. 

Due diligence is not just a formality; it is a vital safeguard for Buyers and a test of transparency for Sellers. A well-managed due diligence process can build trust, clarify expectations, and lead to a smoother and more successful transaction. For Sellers, being organised and proactive can help maintain momentum and avoid unnecessary renegotiations or delays.

How can we help?

Due diligence works best when it is well planned, well managed and properly interpreted. We support Buyers in scoping enquiries, reviewing findings and assessing how issues should be reflected in the deal terms. We also support Sellers in preparing for disclosure, running an efficient data room process and responding to enquiries in a way that maintains momentum and reduces the risk of late-stage renegotiation. Speak to our head of corporate and commercial, Victoria Holland, today.

About the author

Zarenna Porter is a solicitor in the Corporate and Commercial department. Her work spans a wide range of corporate and commercial matters, including acquisitions and disposals, share buybacks, company reorganisations and the drafting and negotiation of commercial contracts and agreements. She has supported businesses operating across different sectors, tailoring her advice to suit the distinct needs of both sole traders and larger corporate entities.

Love in later life and the inheritance tax trap

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January is traditionally a busy month for family lawyers, a time when couples often resolve to start the new year by breaking up, but it’s a pattern no longer confined to younger couples. Divorce among over-60s – often referred to as silver splitters – has become an established trend, reflecting longer lives and changing expectations in later life.

Figures from the Office of National Statistics (ONS) show that divorces amongst those aged 65+ increased by 46% between 2004 and 2014.  And while ONS no longer tracks the ages of divorcing couples, recent research by Legal & General shows that one in three divorces now involve somebody over the age of 50.  

But relationships in older age are not just about separation and endings; they are also about the opportunity for new beginnings, and for many, that means living with a new partner.

The latest ONS figures highlight just how widespread cohabitation has become. Around 22.7% of couples in England and Wales were cohabiting in 2022, up from 19.7% a decade earlier, while the proportion of people who are married or in a civil partnership has fallen below 50%. 

Increasingly, lawyers are seeing couples who have chosen to live together rather than marry, sometimes for many years, without fully appreciating how differently the law treats them, particularly when it comes to inheritance tax and financial protection on death.

Explained inheritance specialist James McMullan: “What many couples don’t appreciate is that the law draws a sharp distinction between spouses and cohabiting partners when it comes to inheritance. There is no such thing as a ‘common law spouse’ for tax purposes, and the financial impact can be huge for the survivor in a couple.”

Under current rules, assets left to a husband, wife or civil partner pass free of inheritance tax, regardless of value. By contrast, an unmarried partner may face a 40% tax charge on anything above the £325,000 nil-rate band. For homeowners and long-term partners, that can translate into a significant and unexpected bill at an already difficult time.

Alongside tax, pension entitlements can also differ, with some occupational schemes paying survivor benefits only to spouses or civil partners.

The issue often only comes to light at a late stage, sometimes when one partner is seriously ill, and for some it may mean a rushed, last-minute wedding, with figures showing a steep rise in so-called ‘deathbed marriages’.  The General Registrar’s Office recorded 836 such licences in the 12 months to the end of June 2025, a 49 per cent increase on the 561 permits issued ten years earlier in the year to June 2015.  

“While marriage is not the right choice for everyone, having a full understanding of the legal and tax consequences of cohabitation is essential, particularly for older couples with property, savings or pensions, and potentially two sets of children each looking to their inheritance,” added James. 

“It’s about planning. Whether married, cohabiting or recently separated, taking early advice on wills, estate planning and financial protection can help couples avoid unpleasant surprises and ensure that personal choices don’t carry unintended tax consequences later on, which may be particularly hard on the survivor.”

About the Author

James McMullan is a Partner and also heads up our Private Client team. James started his career as a family lawyer, but over the years, his practice has grown to encompass all aspects of private client law, including estate planning, Inheritance Tax, lasting powers of attorney, lifetime gifts, living wills, mental capacity issues, probate and contentious probate, trusts and, of course, wills.

James prides himself on spending sufficient time with clients at the outset of a matter to fully understand their position, needs, and objectives. He is committed to resolving disputes effectively, frequently using alternative dispute resolution (ADR). Given its costs and uncertainty, court litigation is a last resort.

Understanding Heads of Terms in corporate transactions

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The beginning of any corporate transaction is a critical phase where parties outline how they intend to structure the deal. At this stage, it is common for parties to engage legal and financial advisers to help articulate the key commercial and legal principles that will underpin the transaction. These principles are typically captured in a document known as the Heads of Terms (also referred to as a Term Sheet or Memorandum of Understanding).

While not usually legally binding (except for certain provisions like confidentiality and exclusivity), Heads of Terms serve as a roadmap for the transaction and help ensure alignment before detailed documentation begins.

Key elements in a sale

In a sale, the Heads of Terms will often include the following core components:

  • Consideration: This refers to the price the Buyer is willing to pay, and the Seller is willing to accept, for the shares or each asset. It is essential to agree on whether the consideration is fixed or subject to adjustment (e.g., based on net asset value or earn-out mechanisms).
  • Form of consideration: The deal may involve:
    • Cash only, which is straightforward.
    • Cash and shares, where the Buyer may offer shares in its own company as part of the payment. This can be attractive to Sellers who wish to retain an interest in the combined entity or benefit from future growth.
  • Payment structure: Parties must decide whether the full consideration will be paid at completion or if there will be deferred payments, such as instalments or contingent payments based on future performance of the target company.
  • Conditions precedent: These are requirements that must be satisfied before the transaction can complete. Common conditions include:
    • Buyer securing financing.
    • Regulatory approvals.
    • Satisfactory due diligence outcomes.
  • Timetable: A clear timeline for key milestones such as signing, completion, and any interim steps helps manage expectations and resources.
  • Exclusivity: Sellers may agree not to negotiate with other potential Buyers for a defined period. This gives the Buyer confidence to invest time and money in progressing the deal. However, exclusivity is often conditional; for example, if the Buyer fails to secure financing by a certain date, the Seller may then be free to engage with other parties.
  • Costs and responsibilities: The Heads of Terms should clarify who bears the costs of advisers, due diligence, and transaction documentation. Typically, each party pays its own costs, but exceptions may apply.

Why Heads of Terms matter

Although not binding in full, Heads of Terms play a vital role in:

  • Reducing misunderstandings by documenting agreed principles early.
  • Facilitating smoother negotiations of the final sale and purchase agreement.
  • Providing a framework for advisers to begin due diligence and drafting.

For both Buyers and Sellers, understanding and negotiating Heads of Terms is a strategic step in any corporate transaction. It sets the tone for the deal and can significantly influence its success. Parties should approach this stage with clarity, professional advice, and a focus on long-term objectives.

In summary, Heads of Terms are a vital first step in any corporate transaction. They help align expectations, reduce misunderstandings, and provide a foundation for the legal documentation that follows. Sellers should approach this stage with clarity and professional support to ensure their interests are protected from the outset.

How can we help?

Early-stage decisions can shape the entire transaction. At RIAA Barker Gillette (UK), our Corporate and Commercial team advises Buyers and Sellers at the Heads of Terms stage to help ensure key commercial principles are clearly agreed, risks are identified early, and negotiations start on a solid footing. We work closely with clients and their advisers to support transactions that are well structured from the outset and capable of progressing smoothly. Speak to our head of corporate and commercial, Victoria Holland, today.

About the author

Zarenna Porter is a solicitor in the Corporate and Commercial department. Her work spans a wide range of corporate and commercial matters, including acquisitions and disposals, share buybacks, company reorganisations and the drafting and negotiation of commercial contracts and agreements. She has supported businesses operating across different sectors, tailoring her advice to suit the distinct needs of both sole traders and larger corporate entities.

Flexible working requests: A guide for employers and employees

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Flexible working is now a central feature of the employment landscape. When managed well, it benefits both employers and employees, supporting operational efficiency, employee engagement and evolving workplace norms.  This guide explains the statutory process for flexible working requests, outlines employer obligations and shares best practices to help navigate requests effectively.  

What is a statutory flexible working request?

A statutory flexible working request is a formal application by an employee to change their contractual terms relating to when, where, or how much they work.  Common examples include adjusting working hours, or start/finish times, working remotely or adopting hybrid arrangements and job-sharing or compressed hours.  ACAS guidance explains that the aim is to balance business needs with employee circumstances.  

From 6 April 2024, all employees can make a statutory request from day one of their employment. There is no longer a required minimum period of service before they can make a request, and they can now make up to two such requests in any 12-month period. 

Dealing with a statutory request 

Employees wishing to make a statutory request should meet the requirements to ensure the request is valid and correctly processed. Employers must deal with statutory requests in a “reasonable manner” in accordance with the Employment Rights Act 1996 and the updated ACAS Code of Practice.

1. Review the request

Ensure the request has been validly made.  Acknowledge the request and assess the feasibility, ensuring a response within two months, unless an extension is agreed in writing.

2. Consultation and decision

If the employer intends to refuse the request, the law now requires them to consult with the employee first.  This discussion should explore alternatives and demonstrate fair consideration.  

The decision must be communicated clearly, and the acceptance or refusal must be confirmed in writing. If accepted, update the employment contract within 28 days.  If refused, it is vital to state the business reasons(s) and inform the employee of any appeal process.  

3. Permitted business reasons for refusal

An employer may only refuse a statutory request based on one or more of the eight permitted business grounds outlined in legislation and the ACAS Code. These include:

  • The burden of additional costs;
  • The inability to reorganise work amongst existing staff;
  • The inability to recruit additional staff;
  • A detrimental impact on quality or performance;
  • A detrimental effect on the employer’s ability to meet customer demand;
  • Insufficient work for the periods proposed;
  • Planned structural changes to the business.

When refusing, the employer should clearly state the business reason(s) in writing and inform the employee of their right to appeal (if an internal appeal process exists). The employer must demonstrate that the request has been properly considered and so it is important to document the reasoning carefully.  Employment tribunals will consider whether the ACAS Code was followed. 

Informal (non-statutory) requests

Even if the employee is not eligible to make a statutory request (for example, because they are not classified as an “employee” under employment law), they can still request flexible working informally. In such cases, the employer is not strictly obliged to follow the statutory procedure or to give business-justified reasons, but good practice suggests that they should give proper consideration.

Rights and protections for employees

  • Employees have the right from their first day of employment to make a statutory flexible working request. 
  • An employer must not subject the employee to a detriment or dismiss them because they have made (or proposed to make) a statutory request. 
  • Where a request relates to a disability or caring responsibility, this may trigger employer obligations under the Equality Act 2010. 

Why flexible working matters

Beyond compliance, flexible working offers strategic benefits to employers which will include improved recruitment and retention, enhanced employee engagement, greater inclusivity, and a better work-life balance for staff. 

For employees, having the opportunity to work flexibly can reduce commuting time, support caring responsibilities, improve well-being, and enable a better balance between work and other life commitments. The key is for the arrangement to be workable for both parties.

Practical tips for employers

  • Ensure you have a clear and accessible flexible working policy and procedure, even though informal arrangements are allowed.
  • Respond to statutory requests within two months or agree to any extension with the employee in writing.
  • If you plan to refuse, conduct a consultation meeting with the employee before reaching a decision.
  • If rejecting a request, clearly outline the business reason(s) in writing and inform the employee of any internal appeal process.
  • Record the decision, update contracts if applicable, and communicate clearly whether an arrangement is accepted (in full or in part) or refused.
  • Follow the ACAS Code of Practice in spirit – tribunals may consider whether the employer adhered to the Code.

Reaching the Right Balance

The statutory right to request flexible working is now more accessible than ever. Employees can make a request from day one, may submit up to two requests a year, but can only have one active request at a time. Employers must act reasonably and promptly, consult with the employee before refusing, and provide genuine business reasons if they reject the request. By approaching flexible working requests constructively and collaboratively, both employers and employees can reach agreements that promote productivity, flexibility, and well-being. For more detailed guidance, check out the ACAS Code of Practice on requests for flexible working and the official government guidance on requesting flexible working.

About the author

Karen Cole is a Partner and Head of the Employment team at RIAA Barker Gillette. She has a range of expertise based on her employment law, dispute resolution, and litigation background. Karen provides employment law advice to businesses and individuals, whether contentious or not. She is a member of the Employment Lawyers Association (ELA) and the Association of Regulatory and Disciplinary Lawyers (ARDL).

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