fbpx

Get an Agreement – Especially Where Family Members Are Involved!

20th September 2018 By Arman Khosravi

It is normal for money, often considerable sums, to pass between family members. However, when this is done without legal advice, it is only too common for disputes to arise as to whether or not the sums concerned were meant as gifts. Disputes between family members often become particularly fractious. Exactly that happened in one case in which a mother and son ended up at loggerheads over ownership of properties worth £800,000.

The case concerned a flat and a house which were both held in the son’s sole name. A family row erupted some years after the properties were acquired, and his mother claimed that she had paid the whole of the flat’s purchase price and made a significant contribution to buying the house. She launched proceedings, asserting that she was the beneficial owner of the flat and a proportion of the house equal to her contribution, and that both were held by her son on trust for her benefit.

In ruling on the dispute, the High Court noted that the son was a successful businessman and would well have been able to afford to purchase the flat for £56,000 without his mother’s help. Although she had made payments to him exceeding £60,000 in the years before the purchase, the Court found that they were gifts and there had been no intention that she would thereby obtain equity in the property. Her belief that she had made payments to her son specifically to enable the flat’s purchase was erroneous.

The house had been bought for £375,000 and there was no dispute that the mother had paid her son £111,000 prior to its acquisition. The Court found that, in that instance, the payment had not been intended as a gift and it entitled the mother to a one-third beneficial interest in the property.

The courts are not the place to sort out issues like this: simple documentation completed at the time of the transactions would have prevented any misunderstanding and an expensive legal battle.

Source: Concious

Latest News

Tenants Can Purchase Freehold When Landlord Cannot Be Found

11th June, 2024 By

The Leasehold Reform, Housing and Urban Development Act 1993 gives qualifying leaseholders the right to join together to buy the freehold of their properties – a process known as collective enfranchisement. A recent case demonstrated that this right can be exercised even when the landlord cannot be found. The leaseholders of two flats in a terraced house wished to purchase it from the landlord, but were unable to ascertain his whereabouts and therefore could not serve notice on him under Section 13 of the Act. They therefore applied for an...

Court Refuses to Set Aside Divorce Order Applied for by Mistake

6th June, 2024 By

While the courts have a range of powers to set aside orders, they will only exercise them in limited circumstances. In a somewhat surprising case that has attracted much comment, the High Court declined to set aside a final order of divorce that had been applied for by mistake. A couple separated in January 2023, after more than 21 years of marriage. In October that year, while financial remedy proceedings were still ongoing, the wife's legal representatives inadvertently applied for a final order of divorce in respect of her instead...

Waiting Time for Grants of Probate Falls

3rd June, 2024 By

Following concerns last year about delays in processing probate applications, recent figures from HM Courts and Tribunals Service show that waiting times for grants of probate are continuing to improve. The average time from submission of a probate application to probate being granted fell to 11.3 weeks in March 2024, a decrease from 13.7 weeks in February and 13.8 weeks in January. This is the lowest figure since March 2023, when the average was 10.8 weeks. The longest waiting time since then was in November, at 15.8 weeks: that month,...

Late Appeal Against Tax Penalties Rejected

31st May, 2024 By

It is incumbent on taxpayers to make sure they fully comply with their obligations to file returns and pay any tax due. The point was illustrated by a recent case in which a taxpayer whose return had not been received by HM Revenue and Customs (HMRC) failed to persuade the First-tier Tribunal (FTT) that he should be permitted to appeal against the resulting penalties. On the evening of 31 January 2014, the man had completed his 2012/13 Income Tax return on HMRC's website. Shortly afterwards he went to Cyprus, and...