Insight Article Archives

How to sell a limited company

Posted on June 4, 2019 - 2:13 pm by Penny Dewar

For the founding members of many privately-owned companies, the end game is focused on selling up before moving on to new ventures or sometimes retirement. But many owners underestimate the time involved in making a business market-ready or do not seek advice on the different options before they start, nor the route-map to follow to secure a successful sale.

Ideally, an advisory team should be put together, involving a lawyer and an accountant specialising in company transactions, to guide the limited company on the preparation for sale before any moves are made to seek out buyers. Calling in advisors after a deal has been struck may mean financial or legal pitfalls that can cause a deal to fail in later stages, and the role of the advisory team in this preparatory stage is as important as any work they will undertake in finalising the deal.

Taking your time to get it right and make the business market-ready means that timescales of 12 to 24 months for preparation are not uncommon.

In putting together a detailed exit plan for a limited company, the first question you are likely to be asked is whether you are looking for a share sale or an asset sale, also known as a business sale. The answer may be influenced by personal, financial or legal reasons, which can be explored with the specialists. Still, the final decision will determine the process to be followed and the resulting tax implications for both buyer and seller.

It is worth mentioning before exploring this further that choosing between these two options will apply only to limited companies, where the company is an entity in its own right.

Share sale. The shareholders sell their shares in the limited company that owns the trade and assets of the business.
A share sale is effectively the clean-break option for the shareholders. The buyer is purchasing the whole company, its assets, liabilities and the business as a going concern. There is no need for new contractual arrangements with employees, suppliers, customers, landlords or others, as the corporate entity will continue in its present form; it is simply that the shareholding has been transferred.
Asset sale. The limited company sells some or all of the assets which comprise the business.
Here the seller is the company itself rather than the individual shareholders. Only those assets and liabilities identified and agreed to be transferred are involved in the sale. This can cover both tangible assets, such as property, stock or machinery, and intangible assets, such as intellectual property and goodwill. An asset sale may occur because a seller wants to retain parts of the business that will continue to operate or be sold elsewhere or because the buyer wants to cherry-pick and avoid certain company liabilities. As the business is being transferred to a different corporate entity, third-party contracts with customers and suppliers must be novated or redrafted; commercial real estate requires negotiation with the landlord to agree on an assignment of the lease, and there would have to be employee consultation. A Transfer of Undertakings (Protection of Employment) Regulations 2006 situation is likely to arise, commonly known as TUPE, where employment rights are protected and transferred to the new owner of the business assets.

The tax position is a key factor in the decision-making between these two routes. This is complex and specific to each situation. Still, individual shareholders will generally be better off in a share sale, with a single tax charge on any capital gains arising (which is likely to be reduced to 10% if entrepreneurs’ relief applies). In an asset sale, there is a potential double tax charge, firstly on the company, with corporation tax on the profit made on the sale of assets, and then on the shareholders when they withdraw the sale proceeds from the company.

Whichever of these two routes is finally decided upon, the management team needs to ensure that contracts and policies are all in order and that any disputes or other issues have been resolved. Once the limited company is ready to go on the market, a non-disclosure agreement (NDA) for potential buyers should be in place. Confidential information must be withheld from any interested parties until the NDA has been signed.

Once a deal has been agreed, buyers should be credit checked and their source of funds validated. If those pass the test, then set out the terms at an early negotiation stage. The sale price is important but not the only thing that matters. Getting a clear document setting out the heads of agreement, also known as heads of terms, can influence the way and speed the transaction progresses and means everyone knows what is expected of them. A solicitor should review any heads of terms before they are signed.

This is likely to include a timescale covering aspects such as when contracts will be sent, how long the buyer has to complete due diligence, and when the exchange of contracts and completion will occur. It should clearly define what is being sold and what may be specifically excluded. And while a non-refundable deposit is usual on the exchange of contracts, it is worth considering a deposit on the signing of the heads of terms, as this can protect against a buyer withdrawing without good reason or failing to meet the timescale.

At each stage, the most important thing is that all members of your advisory team are working with each other in a seamless way throughout the process, as well as directly with you. Where the ground shifts, as it inevitably will, they must remain focused on your vision for the company sale and work with you to achieve the best possible outcome in changing situations.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Asking to see your medical records

Posted on May 28, 2019 - 10:05 am by Penny Dewar

The simple answer is yes, you do have the right to see them. Under data access laws, you can ask to see your medical notes anytime. Practices up and down the country have reported a marked increase in the number of requests since the introduction of GDPR in May 2018 by patients who want to know exactly what notes are being kept by their doctors.

Why would you want to look at your notes?

Fundamentally, what happens to your body or your mental health is your affair. You have every right to know what your medical team has recommended, what notes are being kept and how those notes affect how your health is managed by your GP, medical professionals or mental health experts. The UK Information Commissioner’s Office has issued a set of advisory notes to help ordinary people understand their access rights and whether your GP can refuse to let you see your medical records.

The ICO’s advice in brief

A GP cannot query your reason for requesting access to your personal medical records and cannot refuse access to your information. However, they can ask you or your representative to clarify the information you want to access and only show you information relevant to your specific request. So, for example, if you have been diagnosed with cancer, you can ask to see all the notes pertaining to the diagnosis and treatment of your condition.

Most records are kept online, so medical professionals can allow the patient digital access to their records through an online portal if requested. That information must be safeguarded so that it cannot be ‘hacked’ by using digital encryption, for example.

What if the notes are for someone else?

To stop anyone from getting unauthorised access to confidential patient notes, there are certain safeguards in place, and medical professionals will be cautious about giving out any information unless it’s to the patient themselves. However, a patient can ask a close family member or legal representative to act on their behalf. The GP may ask for clear evidence that the patient has given their representative the right to access their records. They will refer back to the patient if they believe that more information than necessary is being requested.

Suppose they are still concerned about the level of access the patient’s representative is requesting. In that case, GPs can choose to provide the patient with the information directly rather than giving it to the representative. The patient can then decide for themselves just how much of that data they pass on to their representative.

Medical professionals have the right to refuse a request if they believe it could cause serious physical or mental harm to the patient or if the information you requested relates to someone else. You do not have their expressed permission to access the data.

If you have asked for medical data and your GP has refused, you can then pursue the matter further, either through the practice manager or by making a complaint to the Information Commissioner.

Often, medical information is requested by a patient who may feel that the treatment they have received has contributed to a deterioration of their condition or by a relative who may have questions as to how a member of their family is being treated.

Suppose you want to see your medical records and are being denied access by your medical care professionals. In that case, you may have to consider talking to a lawyer to help you resolve the situation.

Contact James McMullan today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Nine smart ways to build staff loyalty

Posted on May 15, 2019 - 8:10 am by Penny Dewar

The positives are well documented. Higher staff engagement and greater retention generally increase productivity, customer loyalty and profitability. On the flip side, if an organisation has problems retaining and motivating staff, it can have several negative impacts on the business, for example, the added cost of recruiting replacement staff and paying agency temps.

Step one: find out why

Perhaps the most simple and effective way to improve staff loyalty and retention is to focus on the reasons for voluntary staff departures. Why are people choosing to leave? Identify common causes of dissatisfaction across the workforce or explore reasons specific to particular sections of the organisation – then form an action plan.

Step two: take action

Once you know why employees might leave your organisation, you can choose how to respond. There are countless retention initiatives you could undertake. For instance:

Improve recruitment and selection practices.

It may seem obvious that a business would only recruit the right people for the role. Still, if employees leave within the first six months of joining, your organisation is not hiring the most suitable candidates. To find the right people, you’ll need to develop relevant job-related selection criteria, attract a pool of potentially suitable candidates, give recruits a realistic job preview, and use competencies and other selection tools to find the most appropriate match.
Improve induction practices.

Once you’ve hired the right candidate, you’ll need to give them a quality induction to your organisation. This will greatly affect how well they settle in and how long they stay.
Offer training and development opportunities.

Research has shown that many employees value training and career development opportunities above financial incentives. Before developing any new training initiatives, you should review existing provisions to identify any gaps, as well as assess any individual training and development needs.
Encourage career development.

If staff feel that there’s no opportunity for promotion, they may leave for greener pastures elsewhere. So, to support career progression, use the results of development and/or performance reviews and discussions to identify employees with the potential to assume greater responsibility. You could develop career progression plans with an individual. This could include in-house and external courses, workshops and seminars, coaching, mentoring and networking. This way, talented employees can move to key roles when they become available.
Build line management skills.

An individual’s relationship with their line manager often influences their decision to leave an organisation. As the old saying goes, employees don’t work for companies. They work for people.
Support flexible working.

If your team wants a better work/life balance, flexible working arrangements can help boost their loyalty and commitment.
Show your recognition.

Often overlooked by employers, simple things like praising someone’s performance can greatly impact their satisfaction and retention. Expressing your gratitude can be hugely effective – and it’s completely free.
Launch health and well-being initiatives.

Looking after your employee’s health and well-being is vital. Research shows that poor employee well-being is linked to high levels of staff turnover and sickness absence.
Open up and communicate with staff.

Communication with employees can take many forms; the most effective strategy will incorporate various methods. Generally, regular team meetings, one-to-one discussions with line managers on an ongoing informal basis and one-off briefings by senior managers on any significant organisational development work best.

In short

Higher staff engagement and retention increase staff loyalty, productivity and profitability.

Find out common reasons why people are leaving and develop an action plan to address them.

You could undertake numerous retention initiatives, from offering flexible working hours to improving career development.

Speak to Karen Cole today to see what your organisation could be doing.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Change in divorce law looks set to stop the blame game

Posted on April 19, 2019 - 10:49 am by Penny Dewar

The news that no-fault divorce is likely to become law has been welcomed. Still, while the legislation waits for its place in the parliamentary calendar, families must continue to deal with one party being ‘blamed’ for the breakup or wait for the change in the law.

And with the parliamentary calendar full of another divorce – the UK’s departure from the EU – no date has been given for debating the proposed changes.

Official statistics show that almost half of divorce petitions between 2016 and 2018 cited behaviour as the reason for ending the marriage rather than the required period of separation. However, while signalling the likely shift to a mutual agreement, the Ministry of Justice announcement sets out plans for a minimum six-month timeframe from making a petition until the final divorce so that couples have time for reflection before securing a divorce.

Professionals have welcomed the potential change in the law, saying it will help couples focus on less acrimonious negotiations when it comes to agreeing on arrangements for the children and/or a suitable financial settlement with each other.

Family lawyer Pippa Marshall said:

“The blame game can further inflame relations that are already strained by a breakdown, so this move is certainly one to be welcomed. Hopefully, it can further support the general shift towards a more conciliatory approach to separation, as there will always be a need for negotiation between couples.

We are dealing with increasingly complex financial and family arrangements, as many couples undertake second and subsequent marriages, often with children from previous relationships. It means that even in the most amicable of divorces, it’s to be expected that each side will wish to secure the best outcome in terms of asset sharing. Eliminating the additional upset of having to apportion blame for the marriage breaking down will probably increase the prospects of couples reaching agreements for their future arrangements.”

Under the existing Matrimonial Causes Act 1973, grounds for divorce require an applicant to prove their partner is at fault through adultery, desertion or unreasonable behaviour. Alternatively, and only if both sides agree, they can agree to wait two years before lodging their divorce petition. If no fault is given, and one party does not consent to the divorce, then the period of separation is extended to living apart for five years.

The proposed changes include:

the irretrievable breakdown of a marriage to be the sole ground;
the option of a joint application for divorce, alongside retaining the option for one party to initiate the process;
removing the ability to contest a divorce;
continuing to have a two-stage legal process, known currently as the decree nisi and decree absolute;
introducing a minimum timeframe of six months from the date of making the petition until final divorce, with 20 weeks from petition to decree nisi and six weeks from decree nisi to decree absolute.

Pippa Marshall has extensive experience practising family law. Call her today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Safeguarding’s vital when appointing others to act

Posted on April 1, 2019 - 4:35 pm by Penny Dewar

Have you considered who would manage your affairs and make decisions if you have an illness or accident that leaves you incapable of looking after things yourself? A Lasting Power of Attorney (LPA) enables you to appoint someone you trust to look after your financial affairs or your health and welfare with minimum effort, delay and expense.

The application process has become much simpler since an online system was introduced a few years ago, which has encouraged many more people to prepare an LPA, with digital applications soaring from 14,000 in the year to March 2014 to 164,000 to March 2017. Paper applications have also risen, and almost 560,000 registrations were made in the year to March 2017, compared with 200,000 in March 2012. But while easier to make, they are also easy to abuse if safeguards are not implemented.

Unfortunately, that is demonstrated by reports of a significant increase in the number of investigations into the actions of attorneys and deputies who have been appointed under an LPA. These have increased by more than 40% in the past year – 1,729 investigations were carried out in 2017-18 – up from 1,199 the previous year, according to the Office of the Public Guardian, which is responsible for administering LPAs.

While the DIY process makes the process more accessible, professional guidance can make the difference in ensuring adequate control on those acting as attorneys to help avoid mistakes or, in the worst case, abuse.

An LPA is a valuable tool, but the right safeguards must be in place, and everyone needs to understand what is involved and the responsibilities it brings.

Understanding Lasting Powers of Attorney

Why have one?

You may want to allow someone else to manage your affairs for many reasons. While the obvious situation is if you are older or ill, an LPA can be useful if someone is undertaking long-term travel or working overseas for a corporate employer.

Using a Property & Financial Affairs LPA, you can appoint someone to look after your financial affairs on your behalf. You can also make a Health & Welfare LPA, which can be used to appoint someone to deal with issues such as where you live and medical treatment if you become mentally incapable.

Without an LPA, if someone becomes mentally incapable, whatever their age, their financial and personal affairs must be managed by a deputy appointed by the Court of Protection. Generally, this makes for a slow and potentially expensive business for families, who must apply to the Court for permission to undertake transactions.

How do they work?

Once an LPA has been made, it must be registered with the Office of the Public Guardian before attorneys can act, with a fee of £82 per LPA. Once registered, the LPA can be submitted to any institution, such as a bank or utility provider, under a financial LPA or to health or care professionals under a health & welfare LPA, enabling the institution to deal directly with the appointed attorneys.

An attorney under a health and welfare LPA can only decide on your behalf if you cannot decide for yourself.

In the case of financial affairs, once the LPA is registered, your attorneys will have the power to enter into any transaction unless you have specifically forbidden it, so they can deal with investments and write cheques. If you are mentally capable, the attorney should only do what you authorise them to do – for example, if you had physical issues that made it difficult to attend a meeting or sign documents. You instructed the attorney to act on your behalf. If you become mentally incapable and are no longer capable of authorising or consenting to the attorney’s decisions or actions, the attorney can make decisions and do things on your behalf. However, there is no cut-off point at which you are presumed to be incapable; capacity is decided on a decision-by-decision basis, and the attorney must do everything practicable to help you arrive at your own decision on every occasion.

Three steps to LPA confidence

Choose attorneys carefully

An attorney has far-reaching powers, and problems are likely to arise if they do not appreciate their role or if there are insufficient checks and balances in the process.
Being granted authority may draw some attorneys into abuse of their position with intentionally fraudulent activity, but it is just as likely to be a misuse of power by family members, who justify their actions as being acceptable because they are making use of assets that will come to them in the end, or because they feel it is reasonable to have a financial contribution for what they do for their relative. Before appointing an attorney, think about how well they look after their own finances, how well you know them and how sure you are that they will make the right decisions for you. Even where an attorney acts with the best intentions to respond to the trust placed in them, if they are disorganised or indecisive, this can impact their ability to make good decisions, just as much as if they are self-serving.
Make attorneys accountable
You can appoint two attorneys and require that they are both involved in each decision, although that can complicate transactions. Another option is to appoint, alongside a family member or friend, a professional attorney whose job it would be to undertake regular checks on how matters are being handled. Alternatively, you can include a requirement within the LPA for the attorney to consult with a third party if a decision exceeds a given threshold or for specific assets. This would allow you to restrict the sale of property or investments without the input of a professional, for example. At the very least, a clause within the LPA appointing a third party to check whether attorneys act within the scope of their authority annually is a good idea. Even where there is no specific requirement within the LPA, the Office of the Public Guardian can ask an attorney to account for their dealings with any money they handle, and so attorneys should be advised to keep financial statements and receipts carefully.
Give good guidance

As well as careful selection and ongoing checks on attorneys, it is important that an attorney has guidance to help them understand their fiduciary and statutory responsibilities and how to satisfy them at the outset.
They should appreciate how their role should be performed regarding the Mental Capacity Act 2005 Principles and Code of Practice, particularly in how they consult with the donor of the LPA and help the donor to make their own decisions, if possible. They should also be made aware that they must not benefit from their position or use money or property for their own benefit, whatever their relationship to the donor, and even where they imagine it would not pose a problem if the donor were not mentally incapable. Recognising that they may need to get expert advice, whether legal, financial or otherwise, is also important if they are to act within the reasonable standards of care and skill required by an LPA.

For further advice and information, contact James McMullan today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

What lies beneath…

Posted on March 29, 2019 - 8:23 pm by Penny Dewar

Back in 2013, prompted by changes under the Land Registration Act 2002, some estate owners had their legal advisers trawl through their old deeds to identify and register certain interests which needed protecting.

In doing this, they uncovered evidence that title to some mines and minerals had been severed from the ownership of the surface land decades or even centuries earlier. While not all rights to mines and minerals needed protection by registration, estate owners applied to register them voluntarily anyway.

Prior to this, when a surface owner bought (as it thought) the whole of the land, it may not have known about such mines and mineral rights because many had not been registered at that time.

So, what’s the position if you own the surface property, someone else has the rights to the mines and minerals, and you want to carry out works beneath the surface, such as laying foundations?

Some of these interests limit mines and minerals to a certain depth. So, it may not be an issue if you don’t excavate to that depth. However, if you do, the owner could technically claim trespass, but they would need to establish that they had suffered some loss.

What if you’re buying a property and such interests beneath the surface are revealed? What’s the risk? And what can you do?

Mines and minerals don’t have to be anything valuable, and the Land Registry has been known to register titles where they formed the ordinary bedrock of the local area. These interests often cover vast areas of land. So, whilst such interests may exist, the commercial risk of anything happening with them could be low.

What remedies are open to me?

A mining search should be obtained, and generally, it will always be prudent to seek title indemnity insurance to cover the risk. Be wary of approaching the owner of a mineral to find out if it is prepared to sell its title, as this would likely result in unavailable insurance.

John Gillette has over 15 years of experience dealing in commercial real estate.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Can you ever be too young to create a Lasting Power of Attorney?

Posted on March 13, 2019 - 12:48 pm by Penny Dewar

If you are 18 or over and have mental capacity, you can create a lasting power of attorney (an LPA), which can be used to deal with such situations.

An LPA will ensure that the people you appoint as your attorneys can care for your health and welfare needs and your financial obligations. In the event of a recovery, you can assume control of your affairs again without terminating the LPA.

You can even use a property and financial affairs LPA while you have mental capacity. For example, you could authorise your attorney to make some payments from your account while you are out of the country or to sign certain documents on your behalf.

What is an LPA?

LPAs were introduced by the Mental Capacity Act 2005 (the Act). An LPA is a legal document that allows an individual to appoint one or more persons to act as their agent (i.e., attorney) to help them make decisions on their behalf and in their best interests if they’re incapacitated.

There are two types of LPA:

a health and welfare LPA; and
a property and financial affairs LPA.

You can appoint the same or different attorneys in each LPA.

If you lose mental capacity, your attorneys can only act under your health and welfare LPA. This type of LPA allows your attorneys to make decisions – yes, you guessed it – about your health and welfare, like whether you should stay in your own home or move into a care home, what medical treatment you should or shouldn’t have, and even down to what you eat, drink and wear.

Conversely, you can choose when your attorneys can act under a property and financial affairs LPA: either with your permission or only if you lose mental capacity. Various financial institutions recognise this type of LPA, allowing your attorneys to manage your bank accounts and investments and even sell your home. You do not need to have a lot of money to make this kind of LPA, and having it would allow your attorney to apply for any benefits you may be entitled to.

LPAs are invalid unless registered with the Office of the Public Guardian (the OPG).

Wouldn’t my family just take care of everything if something happened to me?

Your bank may not give your family access to your accounts if they have not been appointed as an attorney under a property and financial affairs LPA. This could mean they cannot meet your mortgage payments or any other financial obligations you might have. This could have a devastating impact on your family. In that situation, your next of kin must apply to the Court of Protection for a Deputyship order, a time-consuming and expensive process.

Regarding your health and welfare, while it is likely that doctors would discuss any treatment with your family, your family will not have a right to object to treatment. They can only do this if they have been appointed as an attorney. You cannot make an LPA if you no longer have mental capacity. Again, your family must apply to the Court of Protection for a Deputyship Order.

Can I create just one LPA?

Yes. The two LPAs are independent of one another. If you have appointed someone as an attorney for your health and welfare decisions, they will not automatically be entitled to manage your finances. It can be useful to have both LPAs as the attorneys can work together and utilise your finances to provide you with the best care.

How can I change my attorneys?

Once an LPA is created, you can only make a few changes to it. One of the permitted changes includes removing an attorney. However, if you wish to replace an attorney, you must revoke your LPA and create a new one. You will have to pay the registration fee(s) again.

Can I make my LPA without a solicitor?

While creating an LPA without a solicitor is cheaper, you will benefit from taking legal advice before creating such a powerful document giving people the right to make decisions on your behalf.

By obtaining legal advice, you can better understand the decisions an attorney can make on your behalf and ensure that your attorneys understand that they must follow the principles set out in the Act. This can ensure that your attorneys are not misusing their powers.

Further, your solicitor can ensure that any instructions and preferences included in your LPA are acceptable to the OPG. One of the main reasons why the OPG refuse to register an LPA is because someone has inserted a badly written restriction or instruction, which makes the LPA unworkable. If you do not insert anything in these sections, your attorney will be free to make any decision which follows the Act.

Your solicitor can suggest some instructions and preferences to insert that will safeguard you and your assets, e.g., producing annual accounts, restricting the sale of your property, or limiting the value of gifts your attorneys can make from your funds.

Contact James McMullan today if you would like to discuss LPAs and how we can help safeguard your future.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Death and taxes are said to be the two certainties of life…

Posted on March 7, 2019 - 1:00 pm by Penny Dewar

It is thought that nearly 60% of adults in the UK do not have a will. Therefore, when the inevitable happens, and you have not created a will, your death creates an intestacy. This means that the assets and belongings in your sole name and your share of any assets in joint names are distributed in accordance with the Intestacy Rules.

Infochart The Intestacy Rules 2023 Update

For a larger image of the above picture, please click here.

While this outcome may suit some, the Intestacy Rules are not the most tax-efficient way to distribute your assets. Further, the rules can seem outdated and arbitrary as they do not cater to cohabiting couples or long-term relationships.

If you are cohabiting or in a long-term relationship, you must create a will to ensure that your partner (and any children) are catered for following your death.

Why make a will?

If the Intestacy Rules do not distribute your assets as you would like, you must create a will. This will give both you and your loved ones peace of mind. Losing a loved one is difficult enough. A will can provide loved ones with a form of security to know that they will be supported even after you are gone.

A will can go beyond the scope of financial aspects and appoint guardians to look after young children and manage their financial affairs.

In general, your finances and your will should be reviewed every 18 to 24 months and always on a major life-changing event such as a birth, marriage, divorce or death or an increase in wealth. Taking the time to think about your assets will also prompt you to think about the Inheritance Tax liability of your estate.

Taxes after death

In England and Wales, Inheritance Tax is charged on all your assets in your sole name and your share of any assets in joint names. The first £325,000 (the current Nil Rate Band) of your assets are charged at 0%, and the remaining balance is charged at 40%. The percentage of any unused nil rate band can be transferred to a surviving spouse or civil partner. Thus, with some simple tax planning, you can potentially double the Nil Rate Band to £650,000. Other reliefs and exemptions can reduce the value of your estate charged at 40%.

One way of doing this is by utilising your residential nil rate band (also known as the “additional threshold”). This relief can increase the value of the estate charged at 0% by £125,000. However, this relief is available subject to certain requirements being met. Speak to one of our estate planning solicitors to find out more.

Lifetime gifts

Another well-known estate planning technique is to make lifetime gifts. This is often referred to as the seven-year rule. Again, care should be taken when making lifetime gifts, as any gifts that are subject to a reservation (such as parents who gift their house to their children but reserve the right to live in it as if it’s their own) will be clawed back into the estate for Inheritance Tax calculation purposes. Further, there are occasions when HMRC can inquire about gifts made beyond the seven-year period. Ideally, both the donor and recipient of the gift should receive independent legal advice before making a gift to reduce Inheritance Tax liability.

Why instruct solicitors?

While creating an online “do it yourself” will is cheaper, a carefully crafted will and good estate planning advice will help you reduce your estate’s Inheritance Tax liability.

Good estate planning will ensure that you fully utilise the many other Inheritance Tax exemptions and reliefs available to you, which are not covered by this note due to their number.

Further, professional advice will reduce the risk of creating an invalid will, which does not fully comply with the requirements of the Wills Act 1837. A non-compliant will results in the whole estate being distributed under the Intestacy Rules. Similarly, a partial intestacy can also be created with a poorly drafted will. This means that some assets will pass under the will, and the remaining assets will pass under the Intestacy Rules.

Finally, there has recently been an increase in the number of claims made against an estate under the Inheritance (Provision for Family and Dependants) Act 1975. Individuals can claim under this act when they believe the Intestacy Rules or the will has not made a reasonable financial provision for them. It is important to consider this when making a will in an attempt to mitigate potential claims.

For more information, contact James McMullan today.

Note: This is not legal advice; it is intended to provide information of general interest about current legal issues.

New trade mark rules simplify counterfeit challenges

Posted on February 18, 2019 - 2:59 pm by Penny Dewar

The EU Intellectual Property Office ruled that McDonald’s had not been able to prove genuine use of the name Big Mac as either a burger or restaurant name and that the trade mark they registered back in 1996 should be cancelled. This ruling opens the door to expansion for Galway-based Supermac as it can register its brand as a trade mark in the UK and Europe. McDonald’s had used the brand name’s similarity to Big Mac as a reason to block previous expansion outside Ireland, even though the Supermac company name had been based on the founder’s nickname when the food chain was established in 1978.

Commercial lawyer Victoria Holland said:

“This was a real David and Goliath case and demonstrates how important it is to protect your brand whatever your company size. It is also a good example of why you need to look ahead and anticipate where your company may go in future. If Supermac had registered their trade mark in other jurisdictions when they started out, they would have been in a stronger position when McDonald’s came along.”

The ruling in the case coincided with changes to UK trade mark law which came into force recently (14 January 2019) and saw amendments introduced to the Trade Mark Act 1994 as a result of the new EU Trade Marks Directive 2015/2436/EU. The Directive is focused on harmonising the law at the national level across member states and offers brand owners new ways to fight counterfeiting and misuse of trademarks within company names, as well as introducing new procedures for registration, renewal and restoration. Some of the key changes are:

marks can be represented in forms other than graphically, allowing online filing in electronic formats, so that sounds, multimedia, animation or holograms may all be registered. A graphical representation will still be required for registration under the international Madrid system;
technical function restrictions have been extended, so these apply not only to shape but also to any other characteristic which performs a purely technical function;
the Intellectual Property Office will no longer notify applicants if any conflicting trade mark has expired at the date of filing, meaning applicants need to conduct searches themselves for any trade mark that has expired less than a year before their application, as these could be restored or renewed;
proof of use, which may be used in any opposition proceedings, will no longer be effective from the date of publication but will instead be counted from the date of filing, which will need to be borne in mind when counting down for the challenge on the five-year period for non-use;
when owners believe counterfeit goods are being exported bearing their trade mark, they will no longer have to prove they are the right holder to detain the goods; instead, the burden of proof will be with the exporter to show that the holder does not own the right;
owners will have extended rights to act against those producing packaging, labels, or other materials to be used on counterfeits, even where the producer is unaware that they are acting without authority;
dictionary usage that identifies a trade mark as a generic term will be open to correction, including the option of a court order for amendment of a publication;
easier rules for restoration of a lapsed trade mark will require applicants to demonstrate only that the failure to renew was unintentional, where previously, a decision had to be made as to whether it was just to allow the renewal; and
the ‘own name’ defence for the use of an existing company’s name has been removed for company names, so in future, this will be an infringing act and will be allowed only for personal names.

Victoria added:

“The amendments to UK law are mainly straightforward and many people will have come across them as they have already been implemented into EU Trade Mark Law.

The one that may cause some controversy is the change to the own name defence as this is not being applied retrospectively, so we will have situations where long-standing companies continue to use a name that would fail under the new infringement provisions. We will have to see how the courts tackle this.”

Note: This is not legal advice; it is intended to provide information of general interest about current legal issues.

Misbehaviour at the office Christmas party?

Posted on January 10, 2019 - 7:22 pm by Penny Dewar

Whilst it would be hoped that most employees return to work following a Christmas break with nothing more remarkable than the post-Christmas blues, on occasion, employers can be dealing with the fallout from an office party disaster.

Employers can be held vicariously liable for discriminatory acts of employees – even if the event is held off-site and out of normal working hours.

The same can be said for liability for injury to a member of staff inflicted by another. Recently, in the case of Bellman v Northampton Recruitment Limited, the Court of Appeal ruled that a company was vicariously liable for the conduct of its Managing Director at a Christmas party following a physical attack on one of the employees by the MD, leaving the employee severely disabled.

In 2015, in an equally strange set of facts, a claimant brought an unfair dismissal claim in Westlake v ZSL London Zoo. At London Zoo’s Christmas party, zookeeper Ms Westlake got into a fight with a colleague over a love triangle involving another zookeeper. The exact details of the incident were disputed, but one of the individuals was hit in the face with a glass that Ms Westlake was holding. London Zoo decided to dismiss Westlake for fighting with a colleague, with the other member of staff involved given a final written warning. The tribunal stated that since the employer was unable to determine who started the fight, it was legitimate to dismiss both individuals or give both final written warnings – it was unfair to treat them differently. The unfair dismissal claim was upheld, but the tribunal decided to reduce the award to zero because of the conduct of the claimant.

A further example of the perils of the Christmas party is Bhara v Ikea Limited, in which, what is described as a tussle took place between two colleagues. Mr Bhara was dismissed, and it was found that the dismissal was within the range of reasonable responses and was, therefore, fair, even when the employees involved in the incident did not feel it was particularly serious.

These cases are ample demonstration of the perils of the office Christmas party and the potential risks it can pose for employers. If misconduct occurs at the Christmas party, employers should ensure that they conduct a reasonably thorough investigation before any disciplinary action. Furthermore, in advance of the Christmas party, at risk of being accused of being the “Fun Police”, employers should have a clear policy on what standard of behaviour is acceptable and ideally issue a statement to employees in advance of the party to remind all staff.

For further advice and information, contact Karen Cole today.

Note: This is not legal advice; it is intended to provide information of general interest about current legal issues.

Older posts

Newer posts

If you want to make your business market-ready and prepare for a share or a business sale, call Evangelos Kyveris today.

Why would you want to look at your notes?

The ICO’s advice in brief

What if the notes are for someone else?

Contact James McMullan today.

Step one: find out why

Step two: take action

In short

Speak to Karen Cole today to see what your organisation could be doing.

Pippa Marshall has extensive experience practising family law. Call her today.

Understanding Lasting Powers of Attorney

Why have one?

How do they work?

Three steps to LPA confidence

For further advice and information, contact James McMullan today.

So, what’s the position if you own the surface property, someone else has the rights to the mines and minerals, and you want to carry out works beneath the surface, such as laying foundations?

What if you’re buying a property and such interests beneath the surface are revealed? What’s the risk? And what can you do?

What remedies are open to me?

John Gillette has over 15 years of experience dealing in commercial real estate.

What is an LPA?

Wouldn’t my family just take care of everything if something happened to me?

Can I create just one LPA?

How can I change my attorneys?

Can I make my LPA without a solicitor?

Contact James McMullan today if you would like to discuss LPAs and how we can help safeguard your future.

Why make a will?

Taxes after death

Lifetime gifts

Why instruct solicitors?

Note: This is not legal advice; it is intended to provide information of general interest about current legal issues.

For further advice and information, contact Karen Cole today.

Stay in touch

News/Insight

What they say...