The Harsh Reality of Shared Ownership. Natasha Rees comments in The Sunday Times
31 August 2021
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Head of Property Litigation, Natasha Rees, sat down with Melissa York of The Times to provide her comments on one of the risks of shared ownership; being able to easily extend a short lease term.
A short lease term should be something that a solicitor would point out to a buyer at the point of purchase but if this goes unchecked at this point it is likely to lead to issues for the shared-owner further on:
“Short leases should be flagged by conveyancing solicitors and mortgage lenders”, says Natasha Rees. “They are retained to advise on the lease and title. I would have thought a good solicitor would have picked up on that.”
Unless shared owners have staircased up to 100 per cent equity they are excluded from the right to a formal lease extension and have to negotiate one informally with their housing provider. This leaves them open to exploitation and unfair terms, says Rees, such as rising ground rents and short leases. “They are made to pay for valuations and legal fees too.”
The article also covers broader issues for a shared-owner; cladding bills, services charges and permission fees with links to resources to help.
Key challenges and the role of the family advisor in facilitating a successful succession plan: Kelly Noel-Smith, Rosie Schumm and Anna Ferster write for Family Law Journal
How best to pass on wealth to the next generation is a challenge for many families, particularly when successive generations have different approaches to wealth management. The article uses Greek mythology to illustrate some of the challenges for the family advisor who has to adopt different perspectives on a client family: from the macro level, when trying to establish the ethos of the family unit; and from the micro level of each family member within each generation.
The challenges explored in the article range from advising families who are struggling with the relinquishment of control to younger generations to advising families who have opposing views as to how the family wealth should be managed. Kelly, Rosie and Anna also discuss their own experiences of these challenges and how they were overcome.
The article seeks to set out practical tips for the family advisor in navigating these scenarios, including providing advice on nuptial agreements and how to facilitate communication successfully between family members.
The full article can be read in the August issue of Family Law, the leading practitioner journal compiled by experts for family law professionals.
British Legal Awards 2021: Forsters’ Property and Contentious Trusts and Estates teams shortlisted
27 August 2021
News
We are delighted that Forsters’ top rankedlegal teams have been recognised in Legal Week's British Legal Awards 2021. Forsters has been shortlisted as finalists in the following categories:
The shortlisting's showcases the firm's reputation as industry leaders in the areas of Real Estate and Private Wealth. Head of Contentious Trusts and Estates, Roberta Harvey, commented: “I am delighted that we have been shortlisted as finalists at the 2021 British Legal Awards. It is a testament to the team’s hard work and expertise in advising clients in this jurisdiction and worldwide."
Head of Commercial Real Estate, Andrew Crabbie, commented: "We are thrilled to have been shortlisted for Property Team of the Year for the second year running. This is a direct reflection of our reputation and expertise in dealing with complex issues on significant central London and other development schemes. I am pleased to see our Commercial Real Estate team recognised for our work in advising Consolidated Developments on the development of Outernet at St Giles Circus."
Legal Week’s 12th annual British Legal Awards, are regarded as the premier legal awards, representing the best of the best within the UK’s legal community. The results will be announced at the Awards Ceremony on 17 November 2021. The full list of finalists can be found here.
Forsters paves the way green with the Sustainable Recruitment Alliance
25 August 2021
News
Earlier this year Forsters joined the Sustainable Recruitment Alliance, an initiative which encourages a commitment to find new and sustainable ways to attract early talent.
The purpose of the Sustainable Recruitment Alliance is to encourage a more environmentally sustainable approach to early talent recruitment, addressing in particular the amount of waste produced from merchandising at recruitment fairs, as well as more sustainable practices relating travel, food and onboarding materials throughout the recruitment process.
Our work to date includes:
Reducing the number of printed handouts given out at careers fairs,
instead signposting people to online materials available on our
website, via QR codes
Focusing on virtual events, which we have increased during the pandemic
We have recently shared a case study, outlining how we are embedding sustainability in our graduate recruitment processes and broader operations.
We are building on our graduate recruitment work and a number of key areas we are addressing next include:
Eliminating more printed materials from the graduate recruitment milk rounds, when they restart
Replacing branded products with donations to environmental and local charities, and
Moving the recruitment and onboarding process online and providing digital rather than paper resources to new joiners, regardless of whether they start at the firm in person or virtually.
We are excited to build on the success of our recent virtual activity, which is not only sustainable but also enables us to engage with more people, and to continuing to work with the Sustainable Recruitment Alliance to take forward initiatives.
We are committed to running a business that is environmentally sustainable. Not only do we continually strive to minimise our impact on the environment, but we have years of experience of incorporating sustainability considerations into the legal advice that we provide to our clients.
Our sustainability hub brings together the team’s insights and legal expertise on a broad range of environmental matters that affect our clients’ business and personal affairs. This is a rapidly evolving and wide-ranging area of law and we will continue to share our insights about related legal developments on this hub.
Charles Miéville and Emma Gillies write for Bloomberg Tax on SDLT for international buyers
25 August 2021
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Residential Property Partner, Charles Miéville, and Private Client Partner, Emma Gilles (née White), have authored an article for Bloomberg Tax entitled ‘U.K. Property Market—Tax Considerations for International Buyers’.
The article, published on 20 August 2021, has been reproduced with permission from Copyright 2021 The Bureau of National Affairs, Inc. (800-372-1033) www.bna.com.
The Covid-19 pandemic has led to 18 months of changes from a U.K. Stamp Duty Land Tax (SDLT) perspective with mixed (and conflicting) objectives, from kick-starting the property market to improving affordability for the average buyer. On July 8, 2020 an SDLT “holiday” was introduced which is still ongoing, albeit in a reduced way. In April 2021 a 2% non-resident (NRSDLT) charge commenced.
As the tax holiday winds down, we consider what each of these measures was introduced to achieve, what the result was, and how international buyers should now approach any new purchase in light of the current SDLT legislation.
Stamp Duty Land Tax Holiday
The pandemic led to a great deal of uncertainty in the U.K. property market as the government initially advised against moving home; people were also naturally cautious about this in a time of great unpredictability. The U.K. chancellor’s introduction of an SDLT holiday on the first 500,000 pounds ($687,800) of the purchase price aimed at re-opening the market, encouraging buyers to put their SDLT saving into a deposit, and kick-starting the buying process for many would-be buyers.
The SDLT holiday benefits all buyers, whether purchasing a main or additional residence, and whether domestic or international investors. It also had the effect of pushing up prices, as supply dwindled and demand increased, so much so that any SDLT saving may easily have been lost to the significant increase in asking prices, pushing many homes well beyond the affordability of the intended buyers.
In March 2021, the SDLT holiday was extended, so that the market did not fall off a cliff face at a time of great economic uncertainty, and the staggered reduction of the saving, which had been as much as 15,000 pounds, has, from June 30, 2021, been reduced to a maximum saving of 2,500 pounds until September 30, 2021.
Given the high average price of a property in London and the south of England, it is unlikely that many people in this region will be purchasing at under 250,000 pounds and therefore benefiting from the full current exemption. First-time buyer relief on properties up to 500,000 pounds is however still available.
The result of the reduction of the SDLT saving was a flurry of transaction completions before the deadline; our office saw over 200 completions in the final weeks of June. Interestingly, the SDLT holiday was a key factor for clients in all price brackets, rather than just those up to 500,000 pounds who would pay no SDLT at all. The impetus to complete the purchase before September 30, 2021 is now far smaller given the reduced saving.
Non-resident Stamp Duty Land Tax
Against this backdrop, a 2% NRSDLT charge was introduced in April 2021. The aim of the tax, which applies to “non-resident” purchasers only, was to improve affordability of housing against large price increases over the last few years; any funds raised would be used to tackle homelessness.
In order to avoid a NRSDLT charge, a buyer must have been living in the U.K. for 183 continuous days in the calendar year prior to completion of the transaction, otherwise the buyer will be liable to pay the tax. If the buyer can then show a period of 183 continuous days living in the U.K. during a combination of the years immediately prior and post the transaction completion, they will be able to claw back the 2%.
It is important to note that the test for the application of the NRSDLT charge is entirely separate and distinct from the statutory residence test (SRT) that applies when determining tax residence for all other U.K. tax purposes. It is possible for an individual to be tax resident in the U.K. under the SRT while being non-resident for the purposes of NRSDLT, and vice versa.
Unlike the previously introduced 3% surcharge that applies on the acquisition of an “additional residential property”—where a transaction was automatically liable to this charge where one half of a married couple owned another property, even if they were not involved in the purchase—the 2% NRSDLT charge can be avoided where a married couple or couple in a civil partnership buy a property, and only one of them is non-resident for the purposes of the tax; so there is no need to structure to avoid the NRSDLT if one half of a married couple only meets the requirements.
It may therefore be helpful if an international buyer who is considering buying in the U.K. is able to spend the requisite six-month period in the U.K. prior to completion of the property purchase (or immediately afterwards) to avoid the NRSDLT charge. However, such international buyer should not spend this amount of time in the U.K. without seeking advice on the broader U.K. tax consequences of doing so.
This SDLT charge has seen far less interest from international buyers to date, particularly given the majority of sales during lockdown have been to a domestic market, with very few international buyers committing to purchases sight unseen. It will be interesting to observe the impact of the 2% NRSDLT once travel corridors fully reopen. It is questionable whether it will achieve its desired outcome, given the affordability of U.K. property for foreign buyers due to favourable exchange rates, low interest rates for borrowing, and the high holding costs of property in some overseas locations, notably New York and California, where there are significant annual property taxes.
Interpretation can be Complex
A more complex example of the current SDLT position can be seen in the following recent transaction this firm handled which brings into play both the 3% SDLT charge, the 2% NRSDLT charge and the SDLT holiday.
A couple who lived abroad sold their main residence abroad and moved into a U.K. pied-a-terre they owned. They aimed to replace their main residence with a London house purchase, but having just moved to the U.K. are living in their pied-a-terre. They entered into a conditional purchase contract to buy a house. If the contract completion date is prior to September 30, 2021, they will benefit from the 2,500-pound SDLT holiday saving, but due to not having been in the U.K. for 183 continuous days in the year to completion, they would be charged the 2% NRSDLT. They would be able to reclaim this after November 2021, by which point they would have been here for the requisite 183 continuous days.
Alternatively, if the conditions to the contract are not satisfied until after September 30, 2021, they would lose the 2,500-pound SDLT holiday but potentially still be liable for the 2% NRSDLT if completion is any time before November 2021. If completion is in November 2021, they do not benefit from the SDLT holiday, but equally they do not pay the NRSDLT. The position has been further complicated by entry into an option agreement to buy the house, the grant of which triggered an SDLT charge, which is initially based on the NRSDLT calculated charge, but which needs to be revisited once the sale itself completes or at a later date when NRSDLT is not chargeable, which could lead to a refund for the initial option grant.
Planning Points
As is demonstrated by the above example, the SDLT legislation is constantly shifting, and its interpretation can be complex. By moving quickly prior to September 30, 2021 buyers will achieve a small saving in many price brackets, and by structuring their purchase around a six-month U.K. stay may be able to avoid the 2% NRSDLT—although they should be aware of the broader U.K. tax consequences of doing so.
Further planning would be needed to avoid the 3% surcharge on SDLT for additional dwellings, such as selling your former main residence and replacing it with your U.K. main residence, selling or gifting any additional properties prior to purchase of your main residence (but beware any capital gains tax or inheritance tax or foreign tax consequences).
As ever, early structuring advice and legal involvement will be key to minimizing stress and unintended tax consequences.
Meanwhile, the government’s plans to boost the property market on the one hand, and to make it affordable on the other, will continue to have a very mixed effect on market conditions, though it appears our international client base is keen to revisit U.K. acquisitions as soon as travel is easier, and seems undeterred by the myriad possible pitfalls.
Disclaimer
This article reflects the law as of 25 August 2021. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.
What is the best way to buy our first UK home? Emma Gillies answers the Financial Times reader’s question from a US connected couple
25 August 2021
Views
Private Client Partner, Emma Gillies (née White), answers a reader’s question for the Financial Times entitled ‘What is the best way to buy our first UK home?’.
The question seeks to understand whether holding the property as ‘joint tenants’ or ‘tenants in common’ is more suitable for a married couple, where one is British and the other American.
In her response, Emma explains the difference between the two options; highlighting that ‘as joint tenants, you own the whole property together, whereas tenants in common each own a separate and distinct share of the property, which may or may not be equal’.
Although Emma acknowledges that there can be practical advantages to owning property as joint tenants, she goes on to recommend owning the property as tenants in common, as it provides greater flexibility for estate planning. However, she emphasises that US tax advice should also be sought by the reader.
The full answer can be read here, behind the paywall. For further details about purchasing UK property when you have connections to the US please check out our comprehensive guide here.
When acquiring UK property, US purchasers should seek advice on the broader tax and legal implications. In this report, Forsters’ partners along with specialists in the industry, share their insights on the current UK market for US buyers and how best to navigate the specific risks for US-connected clients.
Procuring remedial works under The Building Safety Fund: Emily Holdstock writes for Property Law Journal
20 August 2021
Views
In a recent Property Law Journal article, Emily Holdstock, Partner in our Construction team, summarises how to make a claim under the Building Safety Fund.
A stamp duty land tax (SDLT) saving may be made if an individual buys a property which includes not only their main home, but also separate and independent accommodation for the mother-in-law, such as a ‘granny’ annexe.
However, the possible reliefs and consequent savings are complex and dependent on the individual facts of any situation.
In her article, Elizabeth answers the following questions:
What is the potential saving?
How can I pay more for a property but pay less SDLT?
Forsters advises on the £275 million sale of Cult Beauty to The Hut Group
17 August 2021
News
A Forsters team led by Head of Corporate, Craig Thompson, and Associate, James Hamilton, advised Net-a-Porter founder Mark Quinn-Newall’s Neurotribes investment fund on the sale of its substantial stake in Cult Beauty to The Hut Group for £275 million.
Mark Quinn-Newall’s investment funds were the major shareholders and commercial drivers behind Cult Beauty. The £275 million deal recognises the increased interest in online retail since the pandemic began.
Craig Thompson commented: “This was a fantastic deal for Mark and his investment companies, representing the second time (the first being Net-a-Porter) that Mark has driven an online retailer to huge success. It was a pleasure to work with long time Cult Beauty lawyer, Mathew Cowan at Bracher Rawlins, who expertly steered the transaction to a successful close”.
A cross departmental team, led by Client Relationship Partner, Craig Thompson, and Senior Associate Daniel Bryan, has advised long-standing client, Greybull Capital, on their high-profile purchase of the McLaren Group’s Applied business division.
Forsters’ Corporate Quartet recognised in Spear’s 2021 Legal Index
16 August 2021
News
We are pleased to announce that four of our Corporate Partners have been listed as Top Recommended lawyers in the 2021 edition of the Spear’s Corporate Lawyers Index:
The index recognises the best Corporate lawyers to high net worth individuals, with significant expertise in advising on high-value transactions.
Spear’s is distinctive for ranking a wide range of leading advisers and is described as an “indispensable guide” to the top lawyers for private clients.
A Forsters team led by Head of Corporate, Craig Thompson, and Associate, James Hamilton, advised Net-a-Porter founder Mark Quinn-Newall’s Neurotribes investment fund on the sale of its substantial stake in Cult Beauty to The Hut Group for £275 million.
A cross departmental team, led by Client Relationship Partner, Craig Thompson, and Senior Associate Daniel Bryan, has advised long-standing client, Greybull Capital, on their high-profile purchase of the McLaren Group’s Applied business division.
Five key considerations for occupiers seeking sustainable office premises
13 August 2021
News
Whilst the world of sustainability can seem overwhelming, these five key considerations should begin to show that small changes in outlook and focus can make an impact. Furthermore, the business environment is changing in such a way that companies will soon be under legal obligations and well as commercial pressure to achieve a more sustainable workplace, and so landlords, occupiers and businesses alike should look to be at the forefront of this drive for change in order to stand out in their marketplace.
Focus your search on developments with sustainability and well-being focused building certifications
If you are set on a sustainable focus for your move, your search should ideally be directed at buildings which have an accreditation such as BREEAM, LEED, NABERS, WELL, Fitwel or SKA Rating already in place. Whilst buildings which achieve these accreditations often achieve higher rents in the real estate market, many occupiers are beginning to realise the long-term benefits of a building with strong all-round ESG credentials. Long-term savings can be achieved due to energy efficiency whilst buildings which support healthier, happier and more productive environments can help in attracting and retaining talent. Commercial leaders have driven the reform of the office with well-known companies such as Google showcasing that investing in great design and smart office planning can boost profits by increasing employee productivity, efficiency and engagement.
Check the energy efficiency rating of the premises
Check the EPC rating of any premises you are considering as this is a simple but key indicator of the efficiency of the premises. Under the MEES regulations it is an offence for a landlord to let a property (where no exemptions apply) which has a rating of less than E. However, given the UK’s net zero carbon target by 2050, the 2020 Energy white paper confirmed that the future trajectory for MEES will be EPC B by 2030. Commercial occupiers should consider challenging any potential future landlord where the premises has a rating which is C or lower with this consultation in mind and pushing for the landlord to bring the premises up to a B rating before taking occupation.
The Government also proposes to introduce mandatory in-use operational ratings for commercial buildings. This will measure metered energy consumption and associated carbon emissions to monitor how well the building is being maintained and how effectively energy is being used. This will put further pressure on landlords and occupiers to consult one another both before taking up office space and during a lease term on the efficiency of the premises and the occupier’s use of the premises. This in turn highlights the importance of green lease provisions which are explored further below.
Commuting and green transportation incentives
Location is a key consideration for any office move – alongside this considering how employees will travel to the office and whether green incentives can be put in place following the move will be key in ensuring sustainable future practice. To encourage bicycle use, consider fitting bike racks, shower facilities and lockers to provide employees with the opportunity to bike to work. If this is not a possibility within your premises, then discuss with any potential landlord to see if they would consider providing these facilities within the building.
Request green lease provisions
A green lease is a key resource in allowing owners and occupiers to work collaboratively to enable sustainable practices and to clearly identify the roles and responsibilities of both parties in achieving sustainable occupation and operation of the premises and building. Green lease provisions can cover reducing energy and water use, waste management, transport incentives, improving EPC ratings and anything else which a landlord and/or tenant can effectively manage to have a positive impact on the sustainability of a building.
For tips on negotiating green lease terms and what documents to look out for please see our Green Lease Playbook.
Plan a sustainable fit out
When fitting out the premises – consider how the fit-out can be carried out in a more sustainable way, for example:
Installation of smart meters – this is a simple but very effective way to monitor energy usage and to impact upon occupiers’ energy consumption behaviours.
Sustainable supply chains – check where products are manufactured, and whether suppliers are local and sustainable, ensure that environmental, social, economic and legal concerns are considered across the entire supply chain.
Where possible use demountable partitions which can be re-used if the premises are later refurbished or need to be used in a different way.
Where sanitary fittings are being replaced ensure these are water-efficient (i.e. dual or low flush WCs and low flow taps with automatic shut off).
Recycling/up-cycling furniture and using materials made from recycled and, where possible, recyclable products.
Use of plants to serve as a space divider (rather than plastic screens).
Maximise natural light and use energy efficient lighting such as LED lights with sensors in meeting rooms and pods so that lights are off when rooms are not in use.
Ensure use of sustainable utilities such as air conditioning, heating and ventilation
Assess products such as paints, varnishes, coatings, adhesives, sealants and any composite wood products to choose low-VOC (Volatile Organic Compounds) alternatives where practical.
For information on the importance of addressing embodied carbon – the other key factor in establishing the total carbon footprint of a building, please see our Embodied Carbon Quick Guide.
Our sustainability hub brings together the team’s insights and legal expertise on a broad range of environmental matters that affect our clients’ business and personal affairs. This is a rapidly evolving and wide-ranging area of law and we will continue to share our insights about related legal developments on this hub.
A list of key terminology and concepts relevant to corporate occupiers of UK real estate with their plain English explanations.
Forsters advises Greybull Capital on the purchase of McLaren Applied
13 August 2021
News
A cross departmental team, led by Client Relationship Partner, Craig Thompson, and Senior Associate Daniel Bryan, has advised long-standing client, Greybull Capital, on their high-profile purchase of the McLaren Group’s Applied business division.
The business will continue to be led by McLaren Applied’s current management team and will continue to service its existing customer base with the company aiming to further expand on its current business strategy.
Commenting on the purchase, Marc Meyohas (Managing Partner at Greybull Capital), said “McLaren Applied is at the forefront of British innovation. For over 30 years, McLaren Applied has helped lead the way on the digital and electric evolution of motorsport and the application of these Formula 1 technologies is becoming increasingly widespread. Applied is playing a key role across the transport sector providing solutions that allow for greater resource efficiency, connectivity and electrification.”
“Forsters are thrilled to have advised Greybull on this significant deal, having acted for Greybull on a number of transactions over the years, and we look forward to seeing the Applied business drive forward its growth strategies.” Craig Thompson commented.
A cross-practice group of lawyers from across Forsters’ Corporate & Commercial, Real Estate, Tax, and Finance teams, worked together with Greybull on the acquisition. In particular, Craig was assisted by Daniel Bryan and James Hamilton. Helen Streeton led on real estate, supported by Anthony Goodmaker and Emma Francombe. Elizabeth Small led on tax, and Rowena Marshall led on finance.
A Forsters team led by Head of Corporate, Craig Thompson, and Associate, James Hamilton, advised Net-a-Porter founder Mark Quinn-Newall’s Neurotribes investment fund on the sale of its substantial stake in Cult Beauty to The Hut Group for £275 million.
Can I file my video or audio evidence in children proceedings in the family court?
13 August 2021
News
In disputes between parents about children (e.g. where their children should live or how much time they should spend with each parent), clients frequently come to us with evidence they have gathered. In an age where our smartphones are never far from reach, this can take many forms: screenshots, videos (taken secretly or with the participants’ knowledge), voice notes, voice recordings, social media posts, appearances on “FindmyPhone”, and so on and so forth.
We often need to consider carefully how to handle a particular piece of video or audio evidence. Will the court permit our client to rely on it? Is it helpful to our client’s case? Should our client make further recordings? The answer is sometimes not straight-forward, and we would encourage anyone who finds themselves in this position to ask a specialist family lawyer. Some things to consider include:
Is there a child in the recording?
In a case in 2016 (M v F [2016] EWFC 29), the Family Court found that: “It would almost always be wrong for a recording device to be placed on a child for the purpose of gathering evidence in family proceedings, whether or not the child was aware of its presence”. In that case, the answer may have seemed obvious—the father in question had sewn a recording device into a child’s clothing and recorded her from the beginning to the end of the school day. In those circumstances it is not at all surprising that the court found that the father was not capable of meeting his daughter’s emotional needs, having undermined her trust by recording all sorts of aspects of her life without her consent.
However, many parents—like the father in that case—can be tempted to try and use video or audio devices to gather evidence if they have concerns about risks to a child as a result of another parent’s care. It is important to bear in mind that this can reflect badly on the parent doing the recording. Sometimes the simplest cross-check is to ask what an observer seeing the video will think is your—the recorder’s—number one priority at the time of recording. Is it to protect your child from harm, or is to gather evidence? If something is happening where you ought to step in, then there is a risk that gathering evidence in your dispute with the other parent will be perceived as being more important to you than your child’s wellbeing. If you have concerns about risks to your child while in another parent’s care, it is of course important to raise those, and there are lots of ways of doing so. You should seek specialist advice about how you can raise and address your concerns and the impact it will have on child arrangements.
If it is your child’s wishes and feelings you are trying to capture by recording, you should be reassured that there are special rules and practices for ascertaining children’s wishes and feelings in family proceedings. Those are aimed at ensuring that children can express their views in a neutral setting where they don’t feel they need to say what one or other parent wants to hear. As the Association of Lawyers for Children flags in their written submissions in a wider review of transparency in the Family Court those rules may prevent the judge from allowing evidence regarding children to be presented in court at all if it has been obtained outside of the special process for gathering children’s views, and that is likely to be the case for video or audio recordings of children (see section 13(4) of the Children and Families Act 2014).
Is another adult in the recording?
Secret or non-secret recordings of adults are a trickier area. There are reported cases of secret video recordings being used as proof of abuse by adults (for instance Medway Council v A (Learning Disability: Foster Placement [2015] EWFC B66, where video footage of a foster carer was persuasive evidence that she had been racially abusive).
However, the courts do still have reasons to be sceptical of video/audio evidence. The weight to be given to a piece of video or audio footage and whether it should be allowed as evidence may therefore have to be considered by a judge on a case-by-case basis. Before it can be treated as evidence, the other party in the case will have to be shown the video or audio clip and given an opportunity to respond.
A judge considering a video or audio clip may be thinking about any of the following, and you should take advice from your legal team about whether your video is persuasive (and whether it is necessary and proportionate to try and use it) in light of all of these factors.
Does the person in the video know they are being recorded? If not, do they know they are being overheard at all? Some comments which might be abusive, threatening etc. can only be characterised in that way if there was an intention for the victim to hear them.
Does the recording capture the whole context? What was said before and after the video which might explain what is taking place in the video in a different light? What is going on off-screen or out of earshot?
Has the video/audio clip been edited? Even simple audio and video editing software available for free online is capable of completely changing the implications of a clip. (Think cutting the “not” out of the sentence “I am not going to have a fight with you”.)
Finally, it is important to make sure that your conduct in recording another adult does not amount to harassment. Recording constantly or frequently, using an aggressive tone when declaring you are going to record, or making threats about what you will do with the footage, might (among other things) all be treated as harassment. There are reported cases where the courts have seen this sort of conduct as sufficient to grant a Non-Molestation Order preventing a person from making recordings of an ex-partner (Re C (A Child) [2015] EWCA Civ 1096).
Is the recording of a professional?
If you are nervous about attending a meeting with a professional, such as a social worker or a member of CAFCASS (children and families court advisory and support service, who regularly conduct interviews in private children matters), a family therapist, or a mediator, it can be tempting to record the interaction secretly. You may be looking for a way to ensure that you have a good record of the meeting in case you forget something afterwards. If you are anxious that you won’t be believed or understood, you may also be looking to ensure there is a record of your words so that you can correct any mis-reporting at a later stage.
However, you should bear in mind how your relationship with a professional might be damaged if you record without their knowledge and this later comes to light. If you ask up-front to make a recording, some social workers and CAFCASS officers are encouraged to agree (by internal policies, although the extent to which this filters through is patchy). If you make a recording with the professional’s consent, you should bear in mind that he or she will almost certainly have to disclose to the other party (and possibly the court) that a recording of the conversation exists, and the other party may request to listen to it. (The exception is your legal team, in respect of whom all communications with you attract legal privilege).
A compromise is often to let the person to whom you are speaking know that you are anxious about note-taking or minute-taking and ask to see their notes of the meeting before any follow-up steps are taken (such as the preparation of reports). That way, with the help of your solicitor, you can correct any misunderstandings which need dealing with at that stage, whilst maintaining a constructive relationship with the professional involved.
The Transparency Project (a charity) has produced some useful guidance.
What should parents record and how?
Notwithstanding all that is said above, sometimes it can be helpful for clients to keep records or evidence (making this all the more tricky a question!). Depending on the exact circumstances of your case, you may be advised to do any of the following:
Sometimes it can be helpful to keep contemporaneous notes of matters in children’s lives (i.e. notes of things happening then and there so that you have notes “from the time”). These might help your solicitor to understand the children’s day-to-day lives better. In some circumstances they may be used as evidence in court (although, as with any evidence, the judge will factor in that they are one person’s sole account and will think carefully about the level of one-sidedness which may appear). Some people find it helpful to keep a diary, an annotated calendar, or even a series of regular voice notes.
Although it is unlikely for a judge to look at swathes of correspondence, it can be useful to keep copies or back-ups of communications between you and the other parent. This can give sometimes give a flavour of the way you communicate and help professionals identify the nature of the relationship and the best way forward. Copies of that correspondence may include copies of video/audio clips sent, or voicemails left for each other, but will always be most helpful when the whole chain of messages appears in one place. It is not unheard of for correspondence to appear in evidence, so always be polite.
In cases of domestic violence, it can sometimes be important to preserve evidence (e.g. photographs at the time of injuries, damage to property etc.). Although, and this is very important: if you feel unsafe or that your child is unsafe it is much more important to call the police and to get yourself to a safe place. The police record all their calls and will help you take the next steps to preserve evidence once they have ensured you are safe.
Co-hosts Marcus Brigstocke and Head of Family, Jo Edwards are joined by preeminent family lawyer Simon Blain to talk about how to prioritise children’s needs during separation and divorce. They explore how parents can best work together to protect children from any fall-out, the different and creative child arrangements they have seen, how to take account of a child’s wishes and the kindness of surrogate mothers.
A Great British Welcome to Asset Holding Companies? – an overview of the new tax regime
12 August 2021
News
The government is keen to encourage funds to be set up in the UK, rather than, for example, Luxembourg and by publishing details of a new tax regime for asset holding companies in July 2021, is demonstrating that it is prepared to change the UK tax legislation to allow this to happen.
Consultations about a possible new funds regime began at the time of the Spring Budget 2020 and, following two rounds of consultations, some of the draft legislation to implement the new asset holding companies regime has now been published. It is intended that all of the revised legislation will be in place by April 2022 and that funds can join the regime from that time.
In order to fall within the new regime, qualifying asset holding companies (QAHCs) must be at least 70% owned by diversely owned funds that are managed by regulated managers or by specific types of institutional investors. In such cases, the aim of the regime is that investors in overseas property and certain shares should be treated, so far as possible, as if they held the underlying investments direct. It should be noted that the beneficial tax treatment will not, however, apply to holdings of UK property.
In order to achieve the favourable tax treatment for overseas property and shares, a number of the provisions that would normally apply within the tax legislation will be amended so far as QAHCs are concerned. In particular:
Gains on disposals of certain shares and overseas property by QAHCs will be exempt.
Profits of an overseas property business of a QAHC will be exempt where those profits are subject to tax in an overseas jurisdiction.
Certain interest payments that would usually be disallowed as distributions will be deductible.
The late paid interest rules, which can apply in some situations, will be switched off, so that interest payments will be relieved in a QAHC on an accruals basis, rather than the paid basis.
Interest payments made by a normal company would, potentially, be subject to withholding tax, but the new regime will disapply the obligation to deduct income tax at the basic rate on payments of interest where those payments are made to investors in a QAHC.
If a QAHC repurchases its share capital from an individual, the premium paid will be able to be treated as a capital, rather than an income, distribution, provided that, broadly, the payment derives from capital (rather than income) from the underlying investments.
Repurchases by a QAHC of share and loan capital which it had previously issued will be exempt from stamp duty and stamp duty reserve tax.
The draft legislation which has so far been published only makes provision for some of these changes. We can therefore expect to see further draft legislation which will introduce other elements of the regime and rules for entry into and exit out of the regime over the coming months.
The intention is that the new regime will only apply where funds are managed as investments and that a QAHC will not be able to carry out other activities, including trading, to any substantial extent. To this end, there has been a limited attempt to introduce an investment test in the draft legislation but further thought needs to be given to this. It is known that HMRC are still considering how best to distinguish between investment and trading in relation to QAHCs and it is to be hoped that the current draft legislation will be expanded in due course to clarify the position.
For the time being, we must wait and see what the final rules and legislation provide and whether the government’s aim of encouraging funds to the UK will bear fruit.
Disclaimer
This note reflects our opinion and views as of 12 August 2021 and is a general summary of the legal position in England and Wales. It does not constitute legal advice.
Government to impose new prevention of sexual harassment duty on employers
11 August 2021
News
The UK government has confirmed its plans to implement a package of measures which will impose a new duty on employers to prevent sexual harassment in the workplace, proclaiming it to be a “symbolic first step” to combat a broader problem in workplace culture.
The plans come as a result of the Government Equalities Office’s consultation on sexual harassment in the workplace, which identified that, despite having been prohibited by law for decades, harassment in the workplace is a persistent problem. A link to the consultation paper can be accessed here.
Under the current law, employers can rely on a defence that they took all reasonable steps to avoid a case of harassment in the workplace. Such steps may include, for example, staff training, having robust policies in place, adequately dealing with staff grievances and taking disciplinary action where appropriate. The key difference under the new package is that employers will be required to take these steps.
It is important to note that this duty has yet to be formalised into statute and so the full details have not yet been confirmed, although it is expected that when the legislation is implemented, the government will increase the limitation period to bring a claim for harassment (and all other claims that can be brought under the Equality Act 2010) from three months to six months. The duty is to apply to conduct by other employees and third parties, including clients, suppliers and service providers. However, the protection resulting from the increased duty will only apply to employees and workers and not, for example, to interns and volunteers.
The proposed package of reformed / new legislation has been broadly welcomed by many, who view the proposals as necessary to increase the protections afforded to employees. Other proponents see the move as a positive step towards instigating a cultural shift away from merely reactive responses to sexual harassment and towards actively preventing such unwanted conduct. On the other hand, critics are questioning whether the changes will really be effective and whether a more efficient way to implement change would be to focus on enforcing the measures that are already available under the Equality Act 2010, rather than creating new measures.
Despite the varied responses to the proposals, the unanimous sentiment appears to be that there is an unnecessarily high level of harassment in the workplace. Whether or not the government’s response will be sufficient to tackle the problem remains to be seen.
For further information on this topic and/or to discuss any employment related queries please contact our employment law specialists, Joe Beeston (Counsel) or Nina Gilroy (Legal Executive).
Disclaimer
This note reflects our opinion and views as of 11 August 2021 and is a general summary of the legal position in England and Wales. It does not constitute legal advice.
Nominations for the Awards are based on the results of the extensive research process carried out for the recent edition of Chambers HNW Guide 2021, recognising individuals at the top of their profession and resulted in Emma’s inaugural ranking as an “Up and Coming” Partner in the Private Wealth listings.
Following Emma’s promotion to Partner in April last year, she has been widely acknowledged for her standout practice. Chambers explain that “Emma has gained a strong reputation for advising high net worth individuals and families on a range of cross-border matters, including estate planning, trusts and succession” with sources commenting, “Emma is great. She is really easy to work with. She’s adaptable, she’s proactive and always on the ball”.
Her work for US citizens with links to the UK continues to command attention, with a Chambers’ interviewee describing Emma as “knowledgeable and very connected to US markets. She is a real calm influence on many clients, which is important”.
She has also been recognised in the 2021 Spear’s Tax and Trust Advisers index (Rising Star), Legal Week’s Private Client Global Elite 2021 (One to Watch) and ePrivateclient’s Top 35 under 35 2020, as well as being shortlisted for ‘Partner of the Year’ at the Citywealth Future Leader Awards 2020.
The winners of this year’s Chambers High Net Worth Awards will be announced at the ceremony on 7 October 2021, which will be held virtually.
When acquiring UK property, US purchasers should seek advice on the broader tax and legal implications. In this report, Forsters’ partners along with specialists in the industry, share their insights on the current UK market for US buyers and how best to navigate the specific risks for US-connected clients.
HR Issues in the hotel sector – Joe Beeston writes for Boutique Hotel News
6 August 2021
Views
Joe Beeston, Counsel in Forsters’ Employment team, has written an article for Boutique Hotel News outlining some of the issues faced by hotel HR teams as the hotel sector cautiously begins a return to normality following a turbulent couple of years in the wake of the COVID-19 pandemic.
The coronavirus pandemic has, without a doubt, reshaped our personal and professional lives. All industries and sectors have been affected in one way or another and are responding in different ways. Some areas of the hotel industry have taken steps which no-one could have foreseen just a few months ago. So, how is the hotel industry responding to the crisis, what measures and arrangements are being put in place and what are the longer term considerations for it?
Jeremy Robertson and Alfred Liu to present on UK pre-arrival planning for Swiss private clients to the Geneva branch of STEP
3 August 2021
News
Private Client Partner, Jeremy Robertson, and Senior Associate, Alfred Liu, will deliver an online presentation to the Geneva branch of STEP entitled ‘UK pre-arrival planning for Swiss private clients’.
The presentation will concentrate on the following areas:
UK immigration – Jeremy and Alfred will summarise the new UK immigration post-Bexit rules for Swiss/EU nationals and will set out the two principal UK visa routes available to Swiss private clients relocating to the UK.
UK tax – They will briefly summarise the UK residence test and provide an overview of the UK tax rules that apply to UK resident non-domiciliaries, although the focus of this section will be on providing a ‘checklist’ of practical planning points for clients who are considering relocating to the UK.
The presentation will take place on 26 August 2021, to register please click here.
Five top tips for international buyers of UK Residential Property
1 August 2021
News
Buying a property in the UK can be an overwhelming process, made more stressful if the purchaser is based overseas. In order to ensure the process runs as smoothly as possible it is crucial to understand the additional complexities of a cross-border purchase and the particular nuances of buying property in the UK.
We share our top five tips when purchasing a UK property that all international buyers should be aware of.
Choose your lawyer carefully and early in the process
On-boarding international clients can take longer, and proof/source of funds regulations are very tight. Estate agents often need similar information, so be organised with both address/identity proofs and statements of funds.
At Forsters, our dedicated team carry out all checks remotely and identity checks are carried out via a mobile phone link, ensuring the process is as efficient as possible. One issue that can delay the transaction is if the funds are in a third party/ company account. 1 In these circumstances further checks would be required to understand the identity of that company/third party. This process is simplified if funds for the purchase are in the purchaser’s own personal account at the point of engagement.
Estate agents often work regularly with particular solicitors or law firms – instructing one of these may help encourage a seller to accept your offer, as agents will want to know that the transaction will progress swiftly and diligently. We work with many of the well-recognised estate agents both in and out of London, which has helped our clients’ offers be successful in a bidding process.
Many lawyers do not deal regularly with leasehold properties (very common in Central London), or new build developments. These are part of our core work. We also have a team who are dedicated to rural estates, with expertise in agricultural matters too.
Consider the wider tax and estate planning implications
Stamp duty land tax (SDLT) is a large initial cost. If you are non-UK resident and/or if your UK purchase is not a replacement of your main residence (which you must have sold previously) or it is not your only property anywhere in the world, you could be charged considerably more SDLT. Your property may also be subject to taxes on sale, and inheritance tax on death. Our private wealth team can assist with the correct tax structuring and inheritance planning.
Consider a buying agent
This is a relatively under used concept in the UK – note that the estate agent acts for the seller, and so will not necessarily be acting in your best interests. Buying agents have invaluable market knowledge, understand every type of property offering and often have access to off market properties, helpful at a time when good stock is low. They understand your specific demands and needs to ensure that you are only viewing suitable properties. We work closely with selling and buying agents and can suggest a list of contacts.
Have a survey
A seller is not obliged to disclose any physical defects in the property. We work closely with a selection of surveyors who will be able to inspect the property and check there are no material issues – we would then raise these as points for the seller to address before you complete, or you may be able to reduce your offer price by reference to them.
Familiarise yourself with the different ownership types
There are two types of property in England & Wales: freehold and leasehold.
Freehold properties are usually houses. The owner of a freehold property owns the property, the land it sits on and usually the space above it. While no ground rent or service charge is payable for a freehold property, the maintenance of the building is up to the owner.
Leasehold properties are very often flats. A leasehold property is held under a lease which is for a finite period of time and which details the terms of ownership.
While the owner of the leasehold owns the flat for the duration of the lease term, the landlord (freeholder) owns the land and building. You cannot have a freehold flat, but you can have a lease of a flat which has a share in the freehold of the building (owned collectively with all/ some of the other tenants in the building). Flats will be subject to a service charge, which may include contributions to a sinking fund, and they may also be subject to an annual ground rent charge. The legislation around ground rents is currently under review and it is crucial to get legal advice on this in order to understand the nature of the property you are buying.
Ground rent and service charge are usually collected by the landlord in order to pay for the maintenance of the building and land.
Leases also generally restrict an owner’s ability to carry out works (for example opening up walls, moving bathrooms and kitchens, fitting air conditioning or subletting the property). In some cases, the landlord does not have to provide consent. As part of the legal process we would provide you with a report which would include an explanation as to what you can or cannot do.
You may have a statutory right to extend your lease or to club together with other tenants to acquire the freehold of the building.
You may be required to provide personal, professional and/or financial references when buying a leasehold flat, and sometimes a rent deposit (which might typically equate to 1 or 2 years’ service charge). It is important to be organised with these references so that they do not hold up the buying process.
The process of buying a property is predominantly the same irrespective of the property type, but the conveyancing process for leasehold transactions can carry an extra layer of complexity. Your conveyancer must review (amongst other things) the length of the lease (80 + years is preferable), any unfair ground rent or service charge provisions and any supplemental documents required to register you as the legal owner of the flat with the landlord.
Our Residential Property and Private Client teams regularly work together for our international clients purchasing property in the UK, advising them on both the transaction process and the long-term wealth planning requirements of owning UK property.
For further details on the tax considerations for international buyers please do read our recent article for Bloomberg here.
Please do get in touch with any member of the team to find out more about how we can help.
Moving to the UK is an exciting life event whether it be a short-term move for work to explore business prospects or a more permanent relocation with the whole family; the UK offers an eclectic range of options to live, work and learn, from the cityscapes of London to vineyards in the English countryside and historic university towns in-between. Setting up life in a new country can feel daunting too and it can be difficult to know where to start.
