The Terminally Ill Adults (End of Life) Bill – difficult decisions ahead?

29 November 2024
News

Summary

If passed, the Terminally Ill Adults (End of Life) Bill will apply the principles of the Mental Capacity Act 2005 (the “MCA”) when assessing the ability of certain terminally ill individuals to take the decision to seek assistance in dying.

The Bill frames the matter as an individual’s ability to “make a decision to end their own life”. This implies a holistic assessment, not just a medical decision. The Bill sits uneasily with the existing MCA regime, not least because there is little (if any) law on the capacity required to end one’s life.

Attorneys appointed under lasting powers of attorney (“LPAs”) for both property and finances and health and care should not be directly involved in an individual’s decision to seek assistance in dying. They could, however, be required to provide support with other decisions surrounding it.

The Bill recognises that medical professionals’ involvement in the proposed assisted dying regime must be a matter of individual conscience. Should the Bill become law, an attorney’s fiduciary duties may mean that they are not permitted such a conscientious objection.

Analysis

Clause 3 of the Bill provides that, at each stage of the proposed assisted dying process, the terminally ill person’s decision-making capacity is to be judged in accordance with the MCA.

The Bill envisages that, at every relevant stage, the terminally ill person will need to be free of any cognitive impairment that renders him or her unable to: (i) appreciate the information relevant to the decision to end his or her life, (ii) retain it, (iii) use it or weigh it to reach a decision and (iv) communicate that decision (as per the criteria set out at sections 2 and 3 of the MCA).

Two issues emerge from this proposal:

1. First, what is the “relevant information” for the purposes of the decision to terminate one’s own life? It is either an extremely complicated question or a stark, binary one. Any assessment of capacity to request assistance with dying – required on at least five occasions during the proposed process – will turn on this (as yet undefined) test.

There is little guidance on the point, not least because suicide was treated as a crime until 1961 and the subject remains largely taboo. The case of Re Z [2004] EWHC 2817 (Fam) considers the question of capacity to end one’s own life, but does not set out a clear test.

The MCA implies that any decision to seek assistance in accelerating one’s own death would include an understanding of the reasonably foreseeable consequences of deciding to do so (as required by s3(4) MCA). This could set the bar relatively high.

Any such formulation might come up against a public policy argument in favour of maintaining a lower capacity requirement so that terminally ill individuals are not unduly restricted from accessing a regime intended to alleviate their suffering.

It has been suggested that, unusually, the relevant test could be set out in separate guidance. In the absence of any clear precedent, this seems a sensible step.

2. Clause 2 of the Bill restricts its definition of a terminally ill person to an individual who:

has an inevitably progressive illness, disease or medical condition which cannot be reversed by treatment; and
whose death in consequence of that illness, disease or medical condition can reasonably be expected within 6 months

An individual might meet the first limb of the Bill’s test, but not the second (meaning access to assisted dying could be desired, but not yet available); or might have a significant disability or medical condition which, whilst not inevitably progressive, is causing them to wish to end their life.

The MCA involves a regime of supported decision-making. Among other things, it provides that:

an individual must not be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success (section 1(2) MCA); and
to the extent that they cannot take a given decision, the decision is to be taken in accordance with their best interests (section 1(4) MCA)

An individual who has received a terminal diagnosis (but is not yet within the 6 month window proposed by the Bill) might wish to use the assisted dying regime in future. If so, they might require his or her attorneys’ support in arranging their affairs to maximise future opportunities to obtain assistance in dying.

This could include support with decisions regarding:

his or her choice of where to live (e.g. to be close to suitable medical facilities, particularly if his or her physical symptoms are likely to make travel difficult in future)
understanding the effects of proposed medical treatment (which might interfere with his or her decision-making capacity, and so preclude future access to assistance in dying) and
the costs involved in funding the above (or, indeed, funding the application itself for assistance in dying itself)

Mental capacity is decision-specific. Depending on the test of capacity adopted, it is possible that an individual might be capable of seeking assistance in dying, but not making other decisions. If so, the decision to seek assistance in dying would be relevant to any best interests decision being made by their attorneys in other areas, meaning the attorneys would need to take the donor’s wishes on this matter into account.

The Bill includes so-called “conscience clauses”, ensuring medical professionals are not obliged to advise on (clause 4) or participate in (clause 23) the assisted dying process. It would, presumably, be open to LPA attorneys to resign their appointment if they were uncomfortable helping to make arrangements that might help facilitate an assisted death.

It is to be hoped that the attorneys would not be criticised for any such resignation. Given that any such resignation could leave a terminally ill person or otherwise incapacitous person without an attorney when one is really needed, would an attorney’s decision to step down be treated as requiring a best interests decision? Should the Bill pass, it would be better for any donor to discuss the matter with prospective attorneys from the outset, to ensure anyone appointed is prepared to provide support in taking such decisions if the need ever arises.

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Michael Armstrong

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Hannah Mantle

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Amy France speaks to Property Week about the Older People’s Housing Taskforce report

28 November 2024
News

The long-awaited report from the Older People’s Housing Taskforce has called for a new national strategy for an ageing population, including revisions to the National Planning Policy Framework to strengthen the need for older people’s housing.

Property Week has reported on the new strategy where many industry professionals have also shared their views.

Our Head of Later Living, Amy France, said: “With suitable housing for older people being critically low in the UK, we welcome the recommendations from the Taskforce which outline tangible actions that will boost the delivery of homes, rather than simply reiterate the scale of the issue.

“The Taskforce has not forgotten to provide for those who wish to remain and potentially be cared for in existing homes – still the greatest preference amongst older people – with references to the need to think holistically about social care, housing and the NHS. By building up community and primary health services, the aim is to keep patients healthy and out of hospital, with care provided in the home which should provide a massive boost to quality of life and health outcomes, not to mention lowering the burden on the NHS.”

This full article was published on 26 November 2024 and can be read here.

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Amy France

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Ploughing through taxes: what do the IHT changes really mean for farmers?

28 November 2024
News

The latest Government budget, as has been well publicised, has caused outcry amongst the farming community with somewhere between 20,000 – 40,000 braving snow to make their voice heard. But what do the inheritance tax (IHT) changes really mean for farmers?

Agricultural and Business Property Reliefs

Most of the discussion has centred around the Agricultural Property and Business Property Reliefs being capped at £1m, with IHT payable at 20% thereafter. The Government say that only 500 estates or so will be affected each year. Is this true? Let’s look at some recent government figures.

The below graph is from the Government’s “Farm Business Income in England, 2023/24 forecast“. Farm Business Income (“FBI”) is the total output generated by the farm business minus total farm costs. There is some discussion as to what an “average farm” is but the Government suggests that the English average is about 210 acres. It is not immediately obvious how they defined “farm”. For example, is this the area owned by one entity or is it the area farmed by one business? To highlight a different view of “average”, Tom Heathcote, former head of agri-consultancy at Knight Frank and founder of Heathcote Farm Consultancy, said that “an average UK farm to include around 800 acres (600 arable, 150 grass, 50 woodland), one house, two cottages, and a mixture of modern and traditional buildings” (Farmers Weekly).

Calculating your potential IHT bill

If we proceed assuming that the “government average” is correct combined with the average price of arable land (£11,000 per acre or so currently), you reach a pure land value (excluding buildings, machinery or any farm houses) of £2,310,000 for an “average” arable farm. Assuming there is a farm house, agricultural buildings, expensive machinery (bearing in mind second hand combine harvesters that are one or two years old can cost £300,000 or more) some woodland and possibly farmworker cottages, this could value of the overall business could easily reach £3,000,000 (if not more).

Chart showing average farm business income

The impact on farms

If we however assume a relatively conservative value of £3,000,000, this means that an “average” arable farm based on government numbers could be looking at an IHT bill now of up to £400,000 (assuming they are paying 20% on the value above £1,000,000). If we assume that it is owned by a married couple, it includes their main home, they make full use of their gifts to each other and some land up to the £1,000,000 cap is transferred to the next generation on the death of the first, this could reduce the bill to nothing (with the £1,000,000 APR allowance having been used twice and the full £1,000,000 nil-rate band having been used). That, however, relies on multiple moving parts, the above assumptions and planning structures that are not appropriate or even possible for many farms.

An average general cropping farm (according to the Government forecasts) such as this would have made £53,000 in 2023/2024, a cereals farm even less at £34,000. This will also be subject to income and other taxes. Bearing in mind subsidies are disappearing, how volatile farming can be and just how expensive machinery is, how is the “average” farm going to find the money to pay their IHT bills?

While larger estates, particularly those in trust where the tax bill will be 3% every 10 years on the value above £1,000,000, may be able to absorb the cost, it is still going to have a large impact on farming. I have already been involved in discussions where trust owned estates are planning to move away from agricultural land holdings because they no longer make sense against higher-yielding assets in order to meet their tax liabilities. This will ultimately mean farmland will be sold and it will lead to reduced investment into our agricultural sector. Neither of these are necessarily good for food security or the tenant farming sector.

Succession planning

The figures will be much more nuanced than this article suggests, but this will clearly impact many farms. Farm owners will need to ensure that they have considered their succession planning in detail, and not just from a financial perspective. For example, the farm will likely need to provide for the person gifting in their retirement, so gift with reservation of benefit rules need to be carefully considered. It is also a big decision to give away part of your business during your lifetime when you still rely on it and potentially farm on it.

It is more important than it has been for decades to take advice on farm succession planning.

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Harvey Tomes

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Henry Cecil

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Tax Effective Fundraising

27 November 2024
News

It’s not easy raising funds; it’s high risk for the investor given the majority of start-ups don’t work out. Investors have different options available to them to protect against this risk, with some start-ups and some investors able to take advantage of various tax incentive schemes that are in place which assist with de-risking investments. This article takes a look at those schemes.

Whilst start ups often need external investment in order to grow and scale, investors will want a return on their capital: either reliable dividend income or long-term capital growth or, ideally, both. However, typically start-ups simply do not envisage profits for many years, and when they do start to generate profits, paying out dividends is unlikely to be a priority (for them or investors); often, they will need to plough the profits back into the business instead to scale it. Coupled with higher risks of failure (and so capital losses for investors), the tax system recognises that investors need to be enticed into investing into start-ups and other early-stage businesses.

Investment schemes

To give start up companies a level playing field there are a number of investment schemes that give investors enhanced tax breaks when they introduce new capital into the business by subscribing for shares. The Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS), and Venture Capital Trust Scheme (VCT) each encourage investors to finance smaller companies.

Both SEIS and EIS are regularly used by start-ups, though thought should be given to raising capital this way and then later receiving institutional investment from investors that may want liquidation preferences that sit above the ordinary shares held by your early investors.
VCT was designed to spread investment risk over a number of companies; investors invest in the venture capital trust, which will then buy shares in a number of qualifying companies.

Tax breaks

Traditional investing by a UK tax resident in the shares of a UK company comes with an income tax charge on any dividend for investors, along with a capital gains tax (CGT) charge on the gain they make when they come to sell. Shares are generally acquired out of post-tax income and any capital losses may typically only be set against capital gains.

The schemes give investors a varying number of tax breaks, which can include:

Deferral of capital gains on assets sold to finance an acquisition of qualifying shares – meaning more money can be spent acquiring more shares and a tax bill delayed
Income tax deduction on a percentage of the value of the investment in the year that it is made
CGT relief on the gain made in the qualifying shares
Ability to set any losses against income

This makes investing in eligible companies much more attractive, as investors can benefit significantly if values rise, but also have valuable tax benefits if the companies fail. This attempts to make higher risk start up companies that need funding to grow, succeed and thrive a more enticing prospect compared to safer, more reliable, established companies.

Investee company conditions

Following perceived abuse of the schemes, new rules were introduced in 2018. These put in place a two-part condition, which requires the investee company to:

Intend to grow and develop over the long-term (e.g have plans in place to increase revenue, customer base and number of employees (i.e. an SPV for a specific project would not meet this test)); and
Have a significant risk of loss of capital to the investor greater than the net return (risk here means the commercial risk of the company failing in the market), i.e. the company must be highly likely not to deliver a return to the investor, including the benefit of tax relief).

In addition, there are a number of other conditions which the investee company must meet to enable investors to benefit:

	SEIS	EIS	VCT
Type of company	Unquoted (can be listed on AIM)	Unquoted (can be listed on AIM)	London Stock Exchange or on any other EU regulated Market, i.e. not on AIM. At least 70% of the VCT’s investments must be in unquoted companies (can be listed on AIM)
Ownership / subsidiaries	The company must not be controlled by another company and must not have any subsidiaries that are not 51% or more subsidiaries	The company must not be a 51% or more subsidiary of any other company and must not have any subsidiaries that are not 51% or more subsidiaries	The VCT itself must not be a close company. Broadly this means that the VCT company must not be controlled by five or fewer shareholders or any number of directors
Assets	The company must have no more than £350,000 in gross assets	The company must have gross assets of less than £15 million before the EIS share issue and less than £16 million afterwards	The companies that the VCT invests in must have gross assets of less than £15 million before the VCT share issue and less than £16 million afterwards
Employees	The company must have less than 25 employees	The company must have less than 250 employees (500 if the company is “knowledge intensive”)	Each company that the VCT invests in must have less than 250 employees (500 if the company is “knowledge intensive”)
Time limits / restrictions	No previous EIS or VCT investments can have been made. The company must be less than three years old	EIS cannot apply if it has been more than seven years since the company’s first commercial sale (ten years if the company is “knowledge intensive”)	Subject to some exceptions for “follow up investments”, VCTs cannot invest if it has been more than seven years since the target company’s first commercial sale (ten years if the company is “knowledge intensive”)
Trade	The company must be trading, not have previously carried out another trade and must not carry out an excluded trade*	The company must be a trading company but must not carry out an excluded trade*	The VCT’s income must derive wholly or mainly from shares or securities. The VCT must distribute by way of dividend at least 85% of its income from shares. No more than 15% of the value of a VCT’s total investments can be in any one company. At least 70% of the companies invested in must be trading companies but must not carry out an excluded trade*
Limits	No more than £250,000 per group can be raised in any three-year period (for SEIS to apply as mentioned above the company must not have any subsidiaries that it owns less than 51% of the shares in – this is the group for these purposes)	No more than £5 million per year can be raised from any combination of SEIS, EIS and VCT. No more than a total of £12 million (£20 million if the company is “knowledge intensive”) per group can be raised from any combination of EIS, SEIS and VCT	No more than £5 million per year can be raised from any combination of SEIS, EIS and VCT. No more than a total of £12 million (£20 million if the company is “knowledge intensive”) per group ca be raised from any combination of EIS, SEIS and VCT
Location	Must be a UK resident company carrying on a trade in the UK or an overseas company with a UK permanent establishment carrying on a trade	Must be a UK resident company carrying on a trade in the UK or an overseas company with a UK permanent establishment carrying on a trade

*Carrying out an excluded trade means that more than 20% of the company’s business and excluded trades include:

dealing in land, commodities, futures, shares, securities or other financial instruments
dealing in goods other than in the course of an ordinary wholesale or retail distribution trade
financial activities, such as banking or insurance
leasing assets for hire
receiving royalties or licence fees (save for intangible assets)
legal or accountancy services
farming / woodlands and timber production
property development
nursing home or hotel management or operation
producing coal or steel
shipbuilding
energy generation or supplying or creating fuel
providing services to a connected person conducting an above trade

Investor conditions

There are also conditions for the investor themselves to meet:

	SEIS	EIS	VCT
Type of shares acquired	Newly issued ordinary shares	Newly issued ordinary shares	Shares in the VCT can be bought on the open market, however second-hand shares will not entitle you to up front income tax relief
Payment for shares	Cash only	Cash only	Cash only
Tax avoidance	The subscription for the shares of the company must not form part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax	The subscription for the shares of the company must not form part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax
Period of ownership to qualify for CGT relief on sale	Three years minimum	Three years minimum	Five years minimum
Connection	The investor cannot be an employee of the company or any qualifying subsidiary during the period of three years commencing with the date the shares are issued (a director position is acceptable but compensation must not be excessive). The investor must not have a substantial interest in the company	The investor must not be connected to the company (i.e. either alone or with associates owning or entitled to acquire more than 30% of the share capital, voting power or assets or any subsidiary on a winding up OR being an employee of the company or its group (can be a director but must not receive excessive compensation))	VCT cannot have more than 15% of its total investments in any one company

Investor benefits

Provided that these conditions are met, the investor can receive the following benefits:

	SEIS	EIS	VCT
Annual investment upon which investor can obtain tax relief	£200,000	£1 million (£2 million if at least £1 million is invested in knowledge intensive companies)	£200,000
Percentage of investment on which income tax relief can be claimed	50%	30%	30%
Income tax relief on dividends?	No	No	Yes
CGT relief on initial investment	50% capped at £100,000	100%	N/A
Type of CGT relief on initial investment	Deferral	Deferral	N/A
Gains exempt from capital gains when investment sold?	Yes, if income tax relief was received	Yes, if income tax relief was received	Yes. The VCT itself is also exempt from corporation tax on chargeable gains
Relief for capital losses against income	Yes	Yes	No
Inheritance tax (IHT)	Any investment made in a SEIS-qualifying company held at the time of death is exempt from IHT after it has been held for two years	Any investment made in an EIS-qualifying company held at the time of death is exempt from IHT after it has been held for two years	No relief from IHT as holding shares in an investment company

The capital gains deferral for EIS and SEIS allows an investor to defer their gain from the sale of any asset by spending the proceeds on EIS or SEIS shares. You must make the investment between one calendar year before and three calendar years after you sell the asset.

A bit of maths

An investor sells an unrelated capital asset for £140,000, making £100,000 of profit. Usually, this £100,000 would be subject to CGT. However, they invest the full £100,000 of profit into a company that qualifies for EIS. Their CGT on the £100,000 is therefore deferred.

In that year they obtain £30,000 worth of income tax relief. Their net investment cost is therefore, £70,000.

If you have any questions around any of the above or wish to discuss your options further, please contact our Tax team who would be delighted to assist.

Disclaimer

This note reflects the law as at 27 November 2024. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.

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Elizabeth Small

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Oliver Claridge

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Lifecycle of a Business – Shareholder activism: What can a company do?

26 November 2024
News

Setting up and running your own business is an amazing achievement. It requires vision, creativity, motivation and stamina. On occasion, it can even bring you fame, riches and fortune. But it can also result in reams of paperwork and cause sleepless nights. And as someone once said to me about children “It doesn’t get easier, it just changes”, so the same can be said for your business throughout its lifecycle. From setting up to exit, it will force you to consider issues that you might not previously have known anything about and it will need you to make many decisions, sometimes very quickly. What it certainly is not is mundane.

With this in mind, the corporate team at Forsters, together with some of our specialist colleagues, has written a series of articles about the various issues and some of the key points that it may help you to know about at each stage of a business’s life. Not all of these will be relevant to you or your business endeavours, but we hope that you will find at least some of these guides interesting and useful, whether you just have the glimmer of an idea, are a start-up, a well-established enterprise or are considering your exit options. Do feel free to drop us a line or pick up the phone if you would like to discuss any of the issues raised further.

We’ve already discussed various topics, including funding, employment and commercial contracts, but it’s now time to discuss when things go wrong…

Shareholder activism: What can a company do?

We have previously written about the rise of shareholder activism (the article can be accessed here). At its heart, shareholder activism is a way in which shareholders in a company can seek to influence the direction of a company, challenge approaches that are being taken, or have their voices heard. This can relate to matters such as the financials of the company (which in turn can affect distributions to shareholders) to its business affairs.

This article looks at some recent examples of shareholders flexing their muscles and considers how disruption may be minimised in their general meetings; a key place in which activists play a part.

Recent Examples

This year has seen ExxonMobil bringing claims against shareholders in the US. They argued that too many petitions were being put to the company, particularly in relation to climate change, stating that, “Our lawsuit put a spotlight on the abuse of the shareholder-access system”. The case has since been dismissed but has underlined that climate change remains high on the agenda for activist shareholders.

It also saw the activist investor Eminence Capital increasing its stake in Reckitt, the hygiene, health and nutrition brand. This came at a time when the company’s share price fell following a court order in the US for it to pay $60 million in connection with a claim brought in relation to one of its baby formulas. Increasing shareholding is a tactic a number of activist shareholders employ, in order to increase their voting power.

More recently, AJ Investments is liaising with other shareholders regarding its push for the sale of Ubisoft. This has come after calls were also raised for changes to the management of the company, including for the CEO to step down following poor performance by the company in the video game market against its key competitors.

Shareholder Rights

Certain rights are afforded to shareholders in respect of general meetings, many of which are used by activists. These include:

Shareholders holding 5% of the paid-up voting share capital have the right to call for a general meeting to be held and for resolutions to be voted on. This then starts the process by which the directors of the company have to arrange the meeting; a failure to do so will mean that the shareholders can arrange for it to be held.
Shareholders can also require a statement of up to 1,000 words to be circulated to the shareholders of the company relating to a resolution that is to be put to a general meeting or other business to be dealt with at such meeting. Broadly speaking, the company must circulate this statement if it’s received from a shareholder or shareholders holding at least 5% of the voting rights or at least 100 shareholders with the right to vote and who hold shares in the company on which at least £100 has been paid (on average).
At the meeting itself, shareholders may have the right to speak, which can mean posing questions to the directors.
As long as they have voting rights, shareholders can vote at general meetings which means that they can seek to block, or at least record a dissatisfaction, of matters being discussed at the meetings. If they can form a voting block with other shareholders, minority shareholders may, for example, be able to stop special resolutions from being passed.

General Meeting

Once a general meeting has been called, the company and its directors can take steps to assist with the smooth running of proceedings.

Prior to the start, the chair should be fully prepared, having sought advice on their role and duties at the general meeting and the process for matters to pass. A chair’s script is often prepared which will set out, amongst other matters, the resolutions to be put to the meeting and the voting procedures. If possible, the chair should find out as much about the shareholders attending as possible, including their main concerns and objectives.

At the meeting itself, care should be taken to ensure that the relevant persons are in fact able to attend the meeting and speak and vote on the matters that may be put forward. A key form of activism is for shareholders to put questions to a general meeting and to vote for or against certain matters.

By their nature, general meetings provide a space for active debate and to allow the chance for opinions to be aired and information regarding the company to be sought. However, certain powers are afforded to the chair where matters go beyond this (which may be set out in the articles of association of the company, which should be checked carefully prior to the start of the meeting). Examples include:

So that the general meeting can progress, anyone causing a disruption should be encouraged to ask questions instead or be given the opportunity to discuss the particular matter with the company outside of the meeting. Where a number of people are involved in the disruption, they could be asked to appoint one representative.
An adjournment of the meeting may be utilised for the purposes of halting any disruptions and regaining the proper order of proceedings.
The ultimate final step is for the chair to remove someone from the meeting. It is advisable for warnings to be given beforehand and for the consent of the meeting to be obtained prior to the removal of such persons. Practically speaking, any removal of shareholders should be dealt with in a reasonable way.

The key thing to keep in mind is that companies should not automatically assume that all shareholder activism is bad and that they should take all steps possible to stop engagement at general meetings. Professor Alex Edmans (who has been a speaker at a Forsters’ event for full disclosure) has considered activism in detail. His words that “engaged ownership generally create long-term value for shareholders” should be remembered and his exhortation that “rather than viewing activism as blanketly bad (or blanketly good) and seeking to regulate it, we should understand the value of—and seek to promote—the right kind of engagement” is an important one to remember. However, regardless of where you stand on the merits of activism the key takeaway is that no-one will want a disrupted, disjointed, badly run meeting, so companies and executives would do well to prepare themselves along the lines outlined in this article.

Disclaimer

This note reflects the law as at 18 November 2024. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.

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Aaron Morris

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Land Registration Gap – Stalled titles: Tackling the Land Registry Delays

26 November 2024
News

The land registration gap in the UK is a significant issue, being the period between the date of completion of a purchase and the date on which the purchaser is registered as proprietor of the relevant title at HM Land Registry. The “gap” has been exacerbated by delays in processing applications as, although the Land Registry aims to provide an efficient service, many applicants experience extended waiting times, which can hinder property transactions and affect land ownership clarity.

Recent reports state that the average processing time for straightforward applications has stretched to several weeks and complex cases can linger for months, with registering a transfer of part estimated to take up to 20 months. These delays are often attributed to a combination of increased demand, staffing shortages, and the growing complexity of applications due to changes in property law and ownership structures. As a result, a backlog has developed, leaving many property owners in limbo regarding their land rights. However, the assurance of the Land Registry is that legal ownership rights are secured from the moment the application is received, not at the point at which it is processed and completed. The Land Registry states it protects the transaction it is registering from the day it is received by it.

Notwithstanding the Land Registry’s position, this registration gap poses various risks. Unregistered land can lead to disputes over ownership, complicate sales or mortgages, and create uncertainty for developers. Furthermore, delays can result in financial losses for individuals and businesses that depend on timely transactions for investment and development. The long delays at the land registry exacerbate issues as parties may not have access to accurate or up-to-date information, which can cause uncertainty when serving break notices and notices under the Landlord and Tenant Act 1954, which must be served by or upon the legal owner. However, should the delay in the registration cause legal, financial, or personal problems not related to a land transaction or put a property transaction at risk, there is the option to apply to the Land Registry for the application to be expediated. The Land Registry are aiming to process expedited applications within 10 working days.

To address these challenges, the Land Registry has been implementing measures to improve efficiency, including digital transformation initiatives and enhanced staff training. However, the urgency to close the registration gap remains. Streamlining the application process and reducing wait times is essential for ensuring clearer property rights, fostering confidence in the real estate market, and supporting economic growth in the UK. As these efforts continue, closing the registration gap will be crucial for the stability and transparency of land ownership in the country.

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Victoria Salter-Galbraith

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Manhattan Bishop

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Forsters’ Family Partner Simon Blain wins Family Law Commentator of the Year award at the LexisNexis Family Law Awards.

25 November 2024
News

Simon was recognised alongside his co-host Anita Mehta for their Resolution podcast – Talking Family Law.

As Resolution family law experts, Simon and Anita welcome guests to take a deep dive into topical issues in Family Law including surrogacy, prenups, and navigating parenting after separation.

This win recognises Simon’s ongoing contributions to the field of Family law, in providing accessible and engaging content for listeners.

Our Family team are members of Resolution, a community of family law professionals who work with families and individuals to resolve issues in a constructive way. Their main message is around ensuring better support for families and children going through difficult times.

If you would like to hear more, you can find the Resolution podcast here.

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Simon Blain

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Forsters’ Middle East team win ‘Family Governance Service Provision Team of the Year’ at the WealthBriefing MENA Awards 2024

22 November 2024
News

Forsters’ Private Wealth team has been recognised for their unique approach to advising UHNW families across MENA as they were awarded Family Governance Service Provision Team of the Year at the WealthBriefing MENA Awards 2024 .

Showcasing ‘best of breed’ in the MENA region, the awards recognise outstanding organisations which the prestigious panel of independent judges deemed to have ‘demonstrated innovation and excellence during the last year’.

Winners and highly commended companies were announced on 21 November 2024 at the Gala Ceremony in Dubai.

Forsters’ dedicated Middle East team

With an established track record in the region stretching back 25 years, our Middle East team is well known for its expertise in family governance. This award acknowledges our reputation for delivering best-in-class aservices to our clients.

As trusted advisers to individuals and their families across MENA and beyond, our approach to Family Office Governance is truly unique. Placing a significant emphasis on psychology as well as the legal and technical aspects, we look at the overall picture of what the family is seeking to achieve. We take the time to understand each family member and the family as a whole. This allows us to uncover challenges and support them in achieving their goals and long-term prosperity.

Our use of Family Office structures as a multi-generational succession tool, goes beyond the usual investment purposes and forms part of a wider Family Governance exercise to enable families to make decisions easily.

Although our office is in London, the team are in the Middle East monthly to advise our clients. Having cultivated strong relationships with many private wealth and family office professionals in the region, we are renowned for our ability to co-ordinate complex, cross-border advice involving multiple jurisdictions.

The Private Wealth Middle East team is part of Forsters’ wider Middle East group advising clients based in the region on a wide range of services including:

Family Governance
Estate and Succession Planning
UK and International Tax
Trusts Structuring
UK Residential and Commercial Property
Employment
Asset Management
Banking and Finance
Joint Ventures

Please do get in touch with any of the team, to find out more about our Middle East services.

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Charlotte Evans-Tipping

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James Brockhurst

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Deadline looming for Biometric Residence Permit holders

22 November 2024
News

Biometric Residence Permits (‘BRP’) will expire at the end of the year. Understand what urgent action is required before 31 December 2024.

If your BRP expires on or before 31st December 2024, you don’t need to make an application for a BRP renewal of your physical card. Instead, you must register for a UK Visas and Immigration (‘UKVI’) account on the Home Office website before the end of the year, to access your eVisa. Failure to do so will create complications when trying to re-enter the UK in the new year.

If you hold a BRP card and have an eVisa you are not required to create a UKVI account and no further action is required.

Why is this happening?

The UK government is developing a fully digital Border and Immigration system. The Home Office is phasing out physical immigration documents including BRP cards by the end of 2024 and replacing this with an online records system in the form of eVisas.

What is an eVisa?

An eVisa is an online record of your immigration status and the conditions of your permission to enter or stay in the UK. In the future you’ll be able to use an eVisa to travel to the UK – you will not need to carry a physical document, except for your current passport, which must be registered to your UKVI account. Until the end of 2024 you will still need to carry your physical document when you travel, if you have one.

How do I access my eVisa?

You will need to create a UKVI account online to be able to access your eVisa. Updating your physical document to an eVisa does not affect your immigration status or conditions of your permission to enter or stay in the UK. There is no charge to create a UKVI account.

What happens when I create a UKVI account?

By registering for a UKVI account, you will be able to access an eVisa to prove your immigration status with a share code through the Home Office’s ‘View and Prove’ service. This share code will allow you to prove your right to work to an employer and your right to rent to a landlord. The share code can also be issued for other purposes, such as proving your right to study to educational institutions. These share codes can be used prior to the expiry of your physical BRP.

It is important to be aware that that individuals should still travel with their physical travel documents and visas until 31 December 2024.

How do I register for a UKVI account?

All existing Biometric Residence card holders must create an online UKVI account by 31 December 2024. To create a UKVI account, please follow the the link here.

What do I need to register for a UKVI account?

To create a UKVI account and access your eVisa, you will need:

Your date of birth

Your BRP number or Unique Application Number (UAN)

Your passport (if you do not have a BRP)

Access to an email address and mobile phone number

Access to a smart phone

Once you have created your UKVI account you will be able to view the details of your eVisa online, for example your type of permission, when it expires and your conditions of stay. You will also be able to update your personal details and register your passport in your UKVI account so that you can easily travel to and from the UK.

How we can help?

We can help you set up your UKVI account and access your eVisa ahead of the impending deadline or answer any queries you may have. Please do contact our Immigration team or your usual Forsters contact for assistance as soon as possible.

Deadline looming for Biometric Residence Permit holders

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Tracy Evlogidis

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Ben Barrison shares his thoughts on potential reforms to the Landlord and Tenant Act 1954

21 November 2024
News

Partner and Head of Real Estate Disputes, Ben Barrison, shared his thoughts with CoStar, Property Week, and BE News, on The Law Commission launching a consultation on potential reforms to the Landlord and Tenant Act 1954.

The overall consultation focuses on Part 2 of the Act, dealing with ‘security of tenure’ for business tenancies. Discussion points focus on the security of tenure model, alternatives to this, and how this reflects the rise of online retail and sustainability needs. This follows 70 years on from the introduction of the Act, and 20 years since the last review.

‘Of the four options they are considering, a modernised contracting-out regime, to reflect the 20 years of tech advancement since it was last updated, would be an important first step and this would retain the balance the Act brings to commercial landlord and tenant relationships. Apart from security of tenure, there is a great deal of additional work for the Law Commission to do in terms of the other mechanics of the 1954 Act to deliver a modern regime for determining the lease terms and opposing renewal/termination cases. The 1954 Act is currently too slow and cumbersome for the digital age, but the overarching intent remains good.’

Read the full articles here on CoStar, Property Week, and BE News.

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Ben Barrison

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Listen to our Instant Insights – 2024 Autumn Budget

11 November 2024
Podcasts and videos

Listen to our quick explainers for a straightforward breakdown of some of the finer details from the Chancellor’s 2024 Autumn Budget. Our lawyers deliver bite-sized insights in under three minutes, covering the practical, need-to-know issues including:

The SDLT surcharge for second homes
CGT and concerns over anti-avoidance provisions
The sale of shares to an Employee Ownership Trust
Close company loans
Changes to carried interest

SDLT surcharge for second homes

Tax Partner, Elizabeth Small explains the change to SDLT Tax rates for second homes and what happens if a contract was exchanged on or before 31 October 2024:

More Than Law – The Forsters Podcast · Budget 2024 – Forsters' Tax Partner Elizabeth Small on SDLT

Transcript

Barely a Budget ever goes by these days without there being a change to SDLT tax rates and the Autumn 2024 Budget saw no change there. This time the target was not the non-resident SDLT, which had been mentioned in the Labour Party manifesto, but instead the higher rates for additional dwellings, sometimes called the surcharge for second homes.

These rates, with effect from the 31st of October 2024 have now gone up by a further 2%, i.e. from 3% to 5%. This means that taking into account the NRSDLT rate of 2%, that one is now at a top SDLT rate on the most expensive properties of 19%, very close in my mind to the 20% current VAT rate.

If a contract was exchanged on or before the 31st of October 2024, it will be possible to argue that the contract is still only subject to the 3% rate and not the 5% increased rate, but in order to do that, it is absolutely vital that the contract must not be, to use a colloquialism, messed with. In other words, you mustn’t vary that contract, or assign the rights under that contract, and you mustn’t sub-sale the contract, or in any other way make it such that somebody other than the original purchaser becomes entitled to call for a conveyance.

As long as you stay outside those rules, it should be possible for your old contract to be grandfathered and protected from these new rates. Going forwards, whenever you’re looking at a pre 31st of October 2024 contract, it’s going to be very important to understand that this contract has not been altered, varied or subsold.

CGT and concerns over anti-avoidance provisions

Tax Partner, Elizabeth Small explains the changes to CGT rates and the uncertainty facing those that exchanged contracts on or close to Budget day.

More Than Law – The Forsters Podcast · Budget 2024 – Forsters' Tax Partner Elizabeth Small on CGT changes

Transcript

The Autumn Budget 2024 was eagerly anticipated. There were great concerns that there’d be a number of very significant tax changes. One of the prevalent rumours was that CGT rates might be upped from their current 10% and 20% up to the income tax rates of potentially 45%.

Over the last few months there was an increasing rumour that in fact, a CGT rate of 33% might be adopted. So in many ways, people were pleasantly surprised by the Autumn Statement in which the Chancellor announced that the rates for assets, other than residential property and carried interest, moved from 10% basic rate to 18%, and 20% higher rate to 24%, and that is obviously far better rates than the feared 33%, let alone the 45%.

One area for concern, however, is that of an anti-avoidance provision. The current rule had always been that if one had exchanged a contract which was an unconditional contract, that was the date of disposal, regardless of when completion takes place. The Autumn Statement, however, has thrown doubt on that by introducing an anti-forestalling rule, the principle of which is to say that if there was a motivation in exchanging the contract to get a tax advantage by reason of a timing issue, then the tax advantage will not be obtained. Therefore, that means there’s going to be uncertainty for many of the people who are racing to exchange contracts on or before Budget day.

The sale of shares to an Employee Ownership Trust

Tax Partner, Elizabeth Small explains the changes which will tighten up on the requirements for the sale of to shares to an Employee Ownership Trust to be exempt from CGT .

More Than Law – The Forsters Podcast · Budget 2024 – Forsters' Tax Partner Elizabeth Small on CGT and Employee Ownership Trusts

Transcript

The Autumn 2024 Budget introduced a number of changes and one of those was in respect of the sale of shares to an Employee Ownership Trust.

A sale of shares to an EOT provides a full exemption from capital gains tax and has therefore become a relief that has been much used and perhaps to the mind of the Treasury, has been misused. Therefore, the Treasury has introduced changes which will tighten up on the requirements needed to be satisfied in order to obtain this relief.

One of the changes is to require that there is a current market value of the company in order to obtain the exemption. Many taxpayers who are properly advised would have already been undertaking such a valuation, so this should not provide to be too onerous. Similarly, the requirement that the trustees are UK tax resident will not be surprising to many, who will already have chosen to have UK trustees, but is going to be important to take into account these changes, because they took effect for disposals on or after the 30th of October 2024, and there may be as a result of these changes, limitations on the way that a tax payer will want to manage their relationship between themselves and the trustee going forward.

Close company loans

Tax Partner, Elizabeth Small explains the anti-avoidance measures introduced on close company loans to stop so called “bed and breakfasting”.

More Than Law – The Forsters Podcast · Budget 2024 – Forsters' Tax Partner Elizabeth Small on close company loans

Transcript

Companies that are typically owned by five or fewer people often make loans to their shareholders, and those loans can attract a tax charge for the company if the company does not repay the amount of the loan by nine months after the end of the accounting period in which the loan was made by the company.

It’s become apparent that what some people were doing was “bed and breakfasting”. In other words, if the loan was not going to be repaid within nine months of the year end that the loan would be, for argument’s sake, repaid in eight months and 13 days, and then a new loan for the same amount was given by the company that very afternoon, and, as a result, the company was able to say “there wasn’t a loan outstanding at nine months, because it had been repaid.” The fact that a matching loan had been given was neither here nor there. Unsurprisingly, the Chancellor has now stamped upon this.

Changes to carried interest

Tax Partner, Elizabeth Small explains the changes to how carried interest will be taxed.

More Than Law – The Forsters Podcast · Budget 2024 – Forsters' Tax Partner Elizabeth Small on carried interest

Transcript

One of the most eagerly anticipated parts of the Budget speech from the chancellor was in respect of carried interest. A vexed topic of conversation for chancellors over many, many years, perhaps even decades. Famously a beneficiary of carried interest in the private equity market, had said that he paid an effective tax rate of less than his cleaner. That had been changed over the years and current rate of taxation of carried interest is 28%.

Currently, carried interest is subject to the capital gains tax regime and with the concerns regarding the taxation and change of rate of CGT, there was a concern that carried interest would have moved up to an income tax rate of say 45%, which would have been at variance with other jurisdictions which treat carried interest as capital and at a rate of around 30%.

What the Chancellor has announced is that with effect, for carry being cashed in on or after the 6th of April 2025 that the rate will increase from 28% to 32%, but for carry that is cashed in after the 6th of April 2026 that there will have been a whole scale alteration of the carried interest regime, with the potential that carried interest will be treated as trading profits, subject to income tax and Class 4 NICs.

This will apply to qualifying carried interest. What that term means will be debated and explored between now and April 2026, although there are some indications in the press releases that came out with the Autumn Statement as to the initial view of the meaning of a qualified carried interest, but even though the profits will be treated as trading profits post 2026, that doesn’t mean a 45% actual tax rate will apply, because the initial indication is that tax will be subject to an adjustment by applying a 72.5% multiplier to the amount of tax.

This will be a significant increase and change the taxation of carried interest and so it’s going to be very interesting to see how private equity funds and the like adjust their incentivisation of managers between now and April 2026.

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Elizabeth Small

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Heather Corben

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The Lifecycle of a Business – Dispute resolution: What are a company’s options?

6 November 2024
News

Setting up and running your own business is an amazing achievement. It requires vision, creativity, motivation and stamina. On occasion, it can even bring you fame, riches and fortune. But it can also result in reams of paperwork and cause sleepless nights. And as someone once said to me about children “It doesn’t get easier, it just changes”, so the same can be said for your business throughout its lifecycle. From setting up to exit, it will force you to consider issues that you might not previously have known anything about and it will need you to make many decisions, sometimes very quickly. What it certainly is not is mundane.

With this in mind, the corporate team at Forsters, together with some of our specialist colleagues, has written a series of articles about the various issues and some of the key points that it may help you to know about at each stage of a business’s life. Not all of these will be relevant to you or your business endeavours, but we hope that you will find at least some of these guides interesting and useful, whether you just have the glimmer of an idea, are a start-up, a well-established enterprise or are considering your exit options. Do feel free to drop us a line or pick up the phone if you would like to discuss any of the issues raised further.

We’ve already discussed various topics, including funding, employment and commercial contracts, but it’s now time to discuss when things go wrong…

Dispute resolution: What are a company’s options?

While disputes are something commercial parties naturally seek to avoid if at all possible, one will arise at some point in the lifecycle of most businesses. When a dispute does arise, there are a variety of legal mechanisms available to seek to resolve matters. These include adversarial proceedings in which a binding decision is made by a court or tribunal, as well as “alternative dispute resolution” procedures based on party to party negotiation.

Adversarial proceedings: arbitration vs. litigation

If adversarial proceedings are to be pursued, the two main options are litigation and arbitration. In litigation, disputes are determined by a country’s national Courts. In contrast, when parties choose to arbitrate, they agree to submit their dispute to a privately appointed tribunal for determination, usually pursuant to an arbitration clause in their contract.

Aside from this difference, the procedures in litigation and arbitration are often similar. The parties will typically serve statements of case, give disclosure of relevant documents and exchange factual or expert witness evidence, with the proceedings culminating in a trial, sometimes known as an evidentiary hearing.

Whether arbitration or litigation is preferable is context-sensitive. However, litigation may be the better option in the following scenarios:

Precedent: Arbitrators’ decisions on points of law do not bind other Courts or tribunals (not least because they are usually confidential – see below). Litigation will therefore be preferable where it is important to obtain a decision that will bind other parties in future (e.g., a case regarding the meaning of a clause in a supplier’s standard terms and conditions).
Multi-party disputes: Arbitration requires all parties to have agreed to submit the dispute to arbitration. It is therefore often unsuitable for cases involving multiple parties, not all of whom have signed up to the same arbitration clause or otherwise agreed to arbitrate. That said, complex transactions increasingly involve all parties signing up to the same arbitration clause with a view to achieving a “one stop shop” for dispute resolution. Further, the rules of the leading arbitral institutions increasingly provide mechanisms for related disputes to be consolidated. Multi-party arbitration is therefore becoming more common.
Cost: It is sometimes said that arbitration is cheaper than litigation. While this may be true in some contexts, as a general rule, hard-fought commercial arbitration will often end up being more expensive than litigation, given the need to pay the tribunal’s costs (which can be extensive) on top of the other costs of the proceedings.

On the other hand, arbitration may be preferable to litigation in some contexts. For example:

Enforcement: Most countries are parties to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the New York Convention. This makes enforcing arbitral awards more straightforward than enforcing Court judgments in many jurisdictions, particularly emerging markets.
Confidentiality: Unlike Court proceedings, arbitral proceedings are conducted in private, with all submissions and evidence remaining confidential. This is likely to be desirable, for example, in cases involving sensitive commercial information or trade secrets.
Neutrality: While parties from the same jurisdiction will be content for their disputes to be resolved by the national Courts of that jurisdiction, parties from different jurisdictions may well wish to opt for arbitration to provide a neutral forum.

Alternatives to adversarial proceedings: “without prejudice” negotiations including mediation

As an alternative to adversarial proceedings, parties can pursue a variety of negotiation-based forms of “alternative dispute resolution” or “ADR”.

At its simplest, ADR involves negotiations between the parties or their lawyers either in person or via correspondence on a “without prejudice” basis. Such negotiations cannot be referred to before a Court or tribunal, and this encourages parties to take a pragmatic, “cards on the table” approach to resolving matters.

If the parties consider that a more structured approach would be beneficial, a further option is mediation. Here a third party mediator is engaged to facilitate the without prejudice negotiations between the parties, usually at an in person meeting. Unlike a Court or tribunal, a mediator will not make any decision which binds the parties. However, they are able to provide an impartial view on the strengths and weaknesses of their cases, and this can be helpful in encouraging more realistic settlement discussions.

Whichever option is pursued, ADR has the potential to resolve disputes more quickly and cheaply than adversarial proceedings, allowing the parties to return to their day to day business activities and, in some cases, to maintain their business relationship. In circumstances where the outcome of adversarial proceedings is often unpredictable, a settlement via ADR also has the advantage of crystallising the parties’ positions, with neither party being entirely vindicated, but neither losing outright.

Given these benefits and the burden placed on the state by running the Court system, the English Courts are increasingly keen to encourage parties to explore ADR as an alternative to Court proceedings. In Churchill v Merthyr Tydfil, a landmark Court of Appeal decision in 2023, the Court ruled (contrary to previous authority) that the Courts have the power to stay claims in order to compel ADR in certain circumstances. From May 2024 onwards, certain low value claims (those worth less than £10,000) are also required to be mediated before they can be determined in Court, and it seems likely that compulsory mediation will become increasingly common in future.

Disclaimer

This note reflects the law as at 10 October 2024. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.

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Edward Richards

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‘Planning to make a better rental market’ Helen Streeton shares her thoughts with Landlord Today

5 November 2024
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Following its General Election victory, the Labour Government sprang into action to tackle the housing crisis, tabling a Planning and Infrastructure Bill and Renters’ Rights Bill in the King’s Speech within weeks of taking office.

It also announced an eight-week consultation on a revised NPPF, reiterated its manifesto commitment to delivering 370,000 homes a year in this parliament, and addressed mandatory housing targets for councils and the ability to build homes on the ‘greybelt’ (greenbelt of poor quality and underutilised land).

It’s clear that Britain’s 12 million renters won’t be forgotten under a Labour Government, but will Labour policies create an appealing landscape for investors?

The UK Build to Rent sector is one of the fastest-growing sectors in the housing market, with the delivery of units increasing at an average rate of 54% per annum between 2015 and 2021, according to JLL. Despite this, there is disparity up and down the country regarding planning authorities’ knowledge and understanding of BTR as a product and how financial viability modelling works. This is different to housing delivered for sale.

The number of households renting is rising, 35% of households now rent, compared with 35% who own outright (most of whom belong to the over 65 age category) and 30% who own with a mortgage. Renting is no longer the reserve of the young, with the number of households in England where the main tenant is between 45 and 64, sitting at around 70% of the rental market.

The Renters’ Rights Bill seeks to ensure that renters have long term secure and high-quality housing. BTR developers and operators welcome new laws which will provide these protections – the vast majority of landlords want their tenants to be with them long-term and already provide the flexibility to move between properties as needs change.

At the same time, any new legislation needs to ensure a balance between those protections and investor appetite – it would backfire if the upshot is that landlords, especially smaller PRS landlords, withdraw from the market, further choking off supply and putting upward pressure on rents.

Research from the British Property Federation earlier this year showed that 40% of BTR sites take at least a year to achieve planning consent and there are concerns within the industry about the pace at which the new Building Safety Regulator can review buildings within the Building Safety Act Gateways.

Changes to the planning system are a key priority for the government, with Labour hoping it can unlock schemes and investment. Great certainty in planning timelines and a clear framework should enable schemes to progress more quickly. But with both the planning system and building safety, questions remain over resource – is there enough focus on ensuring we have professionals with the necessary skills within the sector?

Labour’s ‘getting Britain building’ rhetoric will only succeed if there are fundamental changes to how Britain’s planning system operates in tandem with a concerted effort to increase resource at a local and national level.

The industry and investors will be eagerly awaiting next steps on the Renter’s Rights Bill tabled by the Government, which is now at the committee stage. Early signs are promising for individual renters, with increases to rights and protections including banning Section 21 ‘no-fault’ evictions for new and existing tenancies. However, the precise and final details of the Bill will be critical in determining the impact on investor appetite.

Labour needs to work closely with industry stakeholders to develop a rental framework that balances the interests of landlords, tenants, and local communities, ensuring fair and transparent practices.

This article was published in Landlord Today on 04 November 2024.

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Helen Streeton

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Amy France tells EG about the diversification of the later living sector

5 November 2024
News

After a lacklustre year so far, we are finally seeing some positive movements in the later living sector. The exciting part is that many of the new developments demonstrate the diversification of the industry in terms of ownership models and affordability, both of which have been anticipated for some time.

Although the primary focus on the Older People’s Housing Taskforce has been to explore ways to increase the provision of homes to meet a high level of projected demand, we are also anticipating in-depth guidance on how the sector should adapt to meet the increasingly sophisticated nature of those consumer demands. In practice, this means a much greater choice of tenures across a much wider variety of locations.

We might still wait with bated breath for the outcomes of the task force, however there are signs that the sector is already rising to the diversification challenge, fuelled by a gradual increase in investment.

Affordable options

A recent example is New York-based private investor Meadow Partners’ partnership with shared ownership specialist Affordable Housing & Healthcare Group to build a £500m senior living shared ownership portfolio. AHH is an affordable housing-focused provider with a footprint in the South West which has a unique shared ownership model, in that it typically sells off 50% of its retirement living developments and rents the other half to occupiers. In a similar move, albeit on a smaller scale, Vistry Group has recently agreed a £19m deal with Anchor to build 77 affordable homes in the East Midlands.

It is not just affordable housing that is spreading beyond its usual parameters. We are also seeing retirement villages, most commonly found in London and the South East, gaining ground elsewhere in the UK. In this regard, Adlington Retirement Living stands out, having recently announced plans to build a 96-home community in Leicester, to add to its 18 independent retirement communities created since 2008 across the North West, Yorkshire, Wales, Bedfordshire and the Midlands.

The level of amenity is an area that can be adjusted by developers to deliver more affordable options, with some developments scaling back to one multi-purpose community room to accommodate social activities. Mid-market solutions might, for example, forgo an on site restaurant, particularly in town centre locations, where there is less need.

This trend will continue as economic conditions improve and developers become more ambitious in terms of scale. Shared facilities between a higher number of homes reduces operating costs and consumer prices. There is also hope that the new government, with its emphasis on housing delivery, might finally reduce some of the current strain on senior living developments caused by the planning system and serve to boost numbers.

Catalyst for action

Another key shift is a growing provision of rental housing for older people. This is happening for a plethora of reasons that deliver multiple benefits to consumers, providers and the general health of the housing market. These include greater flexibility over the timing of the sale of the family home, quicker access to services and care, no maintenance worries, no exit fees and no long resale periods.

So far, Birchgrove is the only dedicated developer building retirement homes solely for rent. But with such a huge and growing demand, others are likely to follow. Birchgrove itself is exploring different formats. For example, in conjunction with Hybr, the developer has launched an intergenerational living scheme in north London which will see students, key workers and retirees living alongside one another.

As the sector races to address the deficit of housing for older people, it is pleasing to see that, at the same time, careful thought is going into meeting the needs of a diverse range of people. The eventual publication of the findings of the task force should act as a further catalyst for action, with backing from the UK’s new pro-housing and development government.

It would be great to see Labour’s planned new towns becoming a template for delivering the right balance of the different types of senior housing into a single location. Certainly, the older generation deserve to have their varied needs met just as much as other demographics, such as first-time buyers and families, which have been the priority for so long. Let’s hope that this new focus on diversification continues at pace.

This article was published in EG on 26 October 2024.

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Amy France

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