, S1(2) ‘reasonable financial provision’ will differ based
on who applicant is but will always be objective. Two
INTESTACY AND INHERITANCE 1975 standards
Inheritance (Provision for Family Dependents Act ‘surviving spouse or civil partner standard’ s1(2)(a)
1975 ‘reasonable in all circumstances for a spouse to receive
An app can be made for an order under s2 whether or not that provision is required for his
Ground for app is set out in s1(1): maintenance’
o That the deceased’s will did not make reasonable ‘maintenance standard’ is applied in relation to all other
financial provision for the applicant; and/ or applications (s(1)(2)(b))eye
o That the distribution of the deceased’s estate s14 Court discretion to apply souse standard when
under the intestacy rules fails to make reasonable
financial provisions for the applicant - former spouse has not remarried, judicially
Allows applicant to challenge a will separated
Standing search - divorce etc occurred w/in 12 months of death
o Finds grants at probate reg w/in past 12 mnths - no order for financial provision has been made or
refused in ancillary proceedings
Making a Claim Exam Structure 6) Guidelines
1) Time limits
S4 S3(1) Common Guidelines ALWAYS
Has to be made <6 months after grant of representation (a) The financial resources and financial needs which
(can be made before grant of rep) the applicant has or is likely to have in the foreseeable
Court has discretion to extend time limit for making future
claim (Re Salmon: Deceased, Re Dennis) (b) The financial resources and financial needs which
- circs around delay, negotiations in time limit, any other applicant for an order under s2 of this act has
recourse against anyone else? Special reasons, estate or is likely to have in the foreseeable future
distribution (c) The financial resources and financial needs which
any beneficiary of the estate has or is likely to have in
2) Jurisdiction/ Domicile the foreseeable future
S1(1)- only applies if deceased domiciled in England (d) Any obligations and responsibilities which the
and Wales after 31 March 76 deceased had towards any applicant for an order under
- Domicile of origin s2 or towards any beneficiary of the estate of the
- Domicile of dependency deceased
- Domicile of choice € The size and nature of the net estate of the deceased
(f) Any physical or mental disability of any applicant
for an order under s2 or any beneficiary of the estate of
3) Choice of Court the deceased
App can be lodged in HC or CC (g) Any other matter, inc conduct of app, or any other
person court sees fit
4) Who can make an App? The liability of any other person to maintain the
S1(1) applicant die
A wife, husband or civil partner of the deceased S3(2) Former Spouse
A former wife, husband or civil partner of the deceased The first two bullet points above
who has not remarried or formed a subsequent civil
partnership Any other matter, including the conduct of the applicant
o (ba) A person who during the whole of the or any other person, which in the circumstances of the
period of two years ending immediately before case the court may consider relevant
the date when the deceased died, was living in S3(2) Spouse of deceased
the same household as the deceased, as the The age of the applicant and the duration of the
husband, wife or civil partner of the deceased (in marriage or civil partnership
other words cohabitees). (cohabitant) The contribution made by the applicant to the welfare
A child of the deceased of the family of the deceased, including any
Any person (not being a child of the deceased) who, contribution made by looking after the home or caring
for the family
in the case of any marriage or civil partnership S3(2A) Same household 2 years before death (cohabiting)
to which the deceased was at any time a party,
or by the deceased, available by virtue of the courts anti-
avoidance powers under ss.10 and 11.
In the case of any family in which the deceased
at any time stood in the role of a parent The age of the applicant, and the length of the period
during which the applicant lived as the husband,
Any person (not being a person included in the
foregoing paragraphs of the sub-section) who wife or civil partner of the deceased and in the
immediately before the death of the deceased was same household as the deceased
being maintained either wholly or partly by the The contribution made by the applicant to the welfare
deceased of the family of the deceased, including any
5) Grounds contribution made by looking after the home or caring
for the family.
S1(1) ‘ that the disposition of the deceased’s estate Negus v Gordon Charles Bahouse & Anor the standard
effected by his will or the law relating to intestacy, or
, the combination of his will and that law, is not such as of living that the applicant enjoyed would be taken into
to make reasonable financial provision for the account.
applicant’ Minimise IHt
Retain sufficient assets to maintain financial security
S3(3) Child of deceased Provide adequately for fam after death
The manner in which the applicant was being or in Lifetime tax planning
which he might expect to be educated or trained
Utilising reliefs
S3(3) Not a child but treated as child
Ensuring estate assets are excluded from the charge of
The manner in which the applicant was being or in IHT if possible
which he might expect to be educated or trained
Making lifetime transfers (PETs/LCTs)
Whether the deceased maintained the applicant and if
so time and extent of the contribution Tax Planning through Wills
Had the deceased and to what extent assumed Use the nil rate band
maintenance of the applicant TNRBS
Whether the deceased knew the applicant was not his Using available reliefs
own child
INHERITANCE TAX
S3(4) maintained person ‘Chargeable transfers’
PETS
Transfer of value made by a person after 18/03/86
Orders of Court 75 Act during their lifetime to another individual
Orders (s2(1)) Tax treatment
Periodical payments Not IHT payable AT THE TIME PET is made as not
chargeable at this point
Lump sum Not IHT payable if transferor SURVIVES 7 YEARS
Transfer of property from date of making PET
If transferor DIES w/in 7 YEARS then PET FAILS and
Settlement of property subject to 40% IHT
Acquisition of property for transfer LCT
Variation of marriage settlements Transfers of value into trust made on or after 22/03/06
Tax treatment
Variation of civil partnership settlements Chargeable transfer when it is made and IHT is
Variation of the trusts on which the deceased’s estate is PAYABLE at 20%
held 20% IHT applied to the chargeable value of the LCT
above the NRB
‘Net Estate’ s25 Person MAKING the LCT is primarily liable to pay
any order under s2= net estate IHT
- All property which the deceased had power to If the transferor SURVIVES 7 years, there is NO
dispose of by his will less funeral, testamentary and FURTHER charge to tax
administration expenses and debts (i.e. what you If the transferor DIES w/in 7 years tax reassessed at
would understand to be the normal distribution 40%
estate) Death
40% tax on value of the estate above the NRB
- Any property in respect of which the deceased
held a general power of appointment which has not
been exercised. Cumulative Total and NRB
= TOTAL CHARGEABLE VALUE OF ALL
- Any sum of money or other property which the CHARGEABLE TRANSFERS MADE IN THE
deceased nominated by way of a statutory PREVIOUS 7 YEARS
nomination or gave by way of a DMC less the Remember to apply exemptions and reliefs such as AE
inheritance tax paid by a donee of such property Up to max £6000 (2 years AE unused)
under s.8. AVAILABLE NRB TO USE FOR A TRANSFER=
- The deceased’s severable share of a joint tenancy £325,000- THE CUMULATIVE TOTAL
(at the value at the date of the hearing). This is only
part of the net estate if so ordered by the court 1) CALCULATE CUMULATIVE TOTAL
under s.9. 2) IDENTIFY TAXABLE ESTATE
Any sum of money or property which is, by reason 3) IDENTIFY TAXABLE VALUE OF THE ESTATE
of a disposition made during life or a contract made 4) DEDUCT DEBTS
5) DEDUCT EXEMPTIONS AND RELIEFS
Effect of Order 6) ESTABLISH AVAILABLE NRB/RNRB AND
Effect from death CALCULATE TAX
Orders ‘read back’ for tax purposes as if disposition
before death (s19) CGT
TAXATION AND TAX PLANNING Overview
on who applicant is but will always be objective. Two
INTESTACY AND INHERITANCE 1975 standards
Inheritance (Provision for Family Dependents Act ‘surviving spouse or civil partner standard’ s1(2)(a)
1975 ‘reasonable in all circumstances for a spouse to receive
An app can be made for an order under s2 whether or not that provision is required for his
Ground for app is set out in s1(1): maintenance’
o That the deceased’s will did not make reasonable ‘maintenance standard’ is applied in relation to all other
financial provision for the applicant; and/ or applications (s(1)(2)(b))eye
o That the distribution of the deceased’s estate s14 Court discretion to apply souse standard when
under the intestacy rules fails to make reasonable
financial provisions for the applicant - former spouse has not remarried, judicially
Allows applicant to challenge a will separated
Standing search - divorce etc occurred w/in 12 months of death
o Finds grants at probate reg w/in past 12 mnths - no order for financial provision has been made or
refused in ancillary proceedings
Making a Claim Exam Structure 6) Guidelines
1) Time limits
S4 S3(1) Common Guidelines ALWAYS
Has to be made <6 months after grant of representation (a) The financial resources and financial needs which
(can be made before grant of rep) the applicant has or is likely to have in the foreseeable
Court has discretion to extend time limit for making future
claim (Re Salmon: Deceased, Re Dennis) (b) The financial resources and financial needs which
- circs around delay, negotiations in time limit, any other applicant for an order under s2 of this act has
recourse against anyone else? Special reasons, estate or is likely to have in the foreseeable future
distribution (c) The financial resources and financial needs which
any beneficiary of the estate has or is likely to have in
2) Jurisdiction/ Domicile the foreseeable future
S1(1)- only applies if deceased domiciled in England (d) Any obligations and responsibilities which the
and Wales after 31 March 76 deceased had towards any applicant for an order under
- Domicile of origin s2 or towards any beneficiary of the estate of the
- Domicile of dependency deceased
- Domicile of choice € The size and nature of the net estate of the deceased
(f) Any physical or mental disability of any applicant
for an order under s2 or any beneficiary of the estate of
3) Choice of Court the deceased
App can be lodged in HC or CC (g) Any other matter, inc conduct of app, or any other
person court sees fit
4) Who can make an App? The liability of any other person to maintain the
S1(1) applicant die
A wife, husband or civil partner of the deceased S3(2) Former Spouse
A former wife, husband or civil partner of the deceased The first two bullet points above
who has not remarried or formed a subsequent civil
partnership Any other matter, including the conduct of the applicant
o (ba) A person who during the whole of the or any other person, which in the circumstances of the
period of two years ending immediately before case the court may consider relevant
the date when the deceased died, was living in S3(2) Spouse of deceased
the same household as the deceased, as the The age of the applicant and the duration of the
husband, wife or civil partner of the deceased (in marriage or civil partnership
other words cohabitees). (cohabitant) The contribution made by the applicant to the welfare
A child of the deceased of the family of the deceased, including any
Any person (not being a child of the deceased) who, contribution made by looking after the home or caring
for the family
in the case of any marriage or civil partnership S3(2A) Same household 2 years before death (cohabiting)
to which the deceased was at any time a party,
or by the deceased, available by virtue of the courts anti-
avoidance powers under ss.10 and 11.
In the case of any family in which the deceased
at any time stood in the role of a parent The age of the applicant, and the length of the period
during which the applicant lived as the husband,
Any person (not being a person included in the
foregoing paragraphs of the sub-section) who wife or civil partner of the deceased and in the
immediately before the death of the deceased was same household as the deceased
being maintained either wholly or partly by the The contribution made by the applicant to the welfare
deceased of the family of the deceased, including any
5) Grounds contribution made by looking after the home or caring
for the family.
S1(1) ‘ that the disposition of the deceased’s estate Negus v Gordon Charles Bahouse & Anor the standard
effected by his will or the law relating to intestacy, or
, the combination of his will and that law, is not such as of living that the applicant enjoyed would be taken into
to make reasonable financial provision for the account.
applicant’ Minimise IHt
Retain sufficient assets to maintain financial security
S3(3) Child of deceased Provide adequately for fam after death
The manner in which the applicant was being or in Lifetime tax planning
which he might expect to be educated or trained
Utilising reliefs
S3(3) Not a child but treated as child
Ensuring estate assets are excluded from the charge of
The manner in which the applicant was being or in IHT if possible
which he might expect to be educated or trained
Making lifetime transfers (PETs/LCTs)
Whether the deceased maintained the applicant and if
so time and extent of the contribution Tax Planning through Wills
Had the deceased and to what extent assumed Use the nil rate band
maintenance of the applicant TNRBS
Whether the deceased knew the applicant was not his Using available reliefs
own child
INHERITANCE TAX
S3(4) maintained person ‘Chargeable transfers’
PETS
Transfer of value made by a person after 18/03/86
Orders of Court 75 Act during their lifetime to another individual
Orders (s2(1)) Tax treatment
Periodical payments Not IHT payable AT THE TIME PET is made as not
chargeable at this point
Lump sum Not IHT payable if transferor SURVIVES 7 YEARS
Transfer of property from date of making PET
If transferor DIES w/in 7 YEARS then PET FAILS and
Settlement of property subject to 40% IHT
Acquisition of property for transfer LCT
Variation of marriage settlements Transfers of value into trust made on or after 22/03/06
Tax treatment
Variation of civil partnership settlements Chargeable transfer when it is made and IHT is
Variation of the trusts on which the deceased’s estate is PAYABLE at 20%
held 20% IHT applied to the chargeable value of the LCT
above the NRB
‘Net Estate’ s25 Person MAKING the LCT is primarily liable to pay
any order under s2= net estate IHT
- All property which the deceased had power to If the transferor SURVIVES 7 years, there is NO
dispose of by his will less funeral, testamentary and FURTHER charge to tax
administration expenses and debts (i.e. what you If the transferor DIES w/in 7 years tax reassessed at
would understand to be the normal distribution 40%
estate) Death
40% tax on value of the estate above the NRB
- Any property in respect of which the deceased
held a general power of appointment which has not
been exercised. Cumulative Total and NRB
= TOTAL CHARGEABLE VALUE OF ALL
- Any sum of money or other property which the CHARGEABLE TRANSFERS MADE IN THE
deceased nominated by way of a statutory PREVIOUS 7 YEARS
nomination or gave by way of a DMC less the Remember to apply exemptions and reliefs such as AE
inheritance tax paid by a donee of such property Up to max £6000 (2 years AE unused)
under s.8. AVAILABLE NRB TO USE FOR A TRANSFER=
- The deceased’s severable share of a joint tenancy £325,000- THE CUMULATIVE TOTAL
(at the value at the date of the hearing). This is only
part of the net estate if so ordered by the court 1) CALCULATE CUMULATIVE TOTAL
under s.9. 2) IDENTIFY TAXABLE ESTATE
Any sum of money or property which is, by reason 3) IDENTIFY TAXABLE VALUE OF THE ESTATE
of a disposition made during life or a contract made 4) DEDUCT DEBTS
5) DEDUCT EXEMPTIONS AND RELIEFS
Effect of Order 6) ESTABLISH AVAILABLE NRB/RNRB AND
Effect from death CALCULATE TAX
Orders ‘read back’ for tax purposes as if disposition
before death (s19) CGT
TAXATION AND TAX PLANNING Overview
