From the 6th April it is no longer necessary for private companies to have a company secretary.  However, existing companies will need to check their articles of association carefully to ensure that this is permitted.  If it not, then the Articles will need to be changed.

From the same date there are changes to the ways in which companies can execute documents.  In addition to the two existing ways of sealing a document by using the common seal, and executing in the presence of a Director and Secretary or two Directors, there is a third.  This is execution by a single Director in the preence of a witness.  Again, companies need to check if this is permitted by their internal rules and in particular whether it is desirable to change the rules to permit execution by only one Director.

From the 1st October all directors of companies have had to exercise five core duties when making decisions that bind their companies.  They have to:

 
• exercise independent judgement;
 
• exercise reasonable care, skill and diligence;
 
• avoid conflicts of interests;
 
• not accept benefits from third parties; and
 
• declare an interest in any proposed transaction or arrangement.

In addition there is a new duty that directors must act in a way which would be most likely to promote the sucess of the company for the benefit of its members as a whole.  There is guidance set out in the Companies Act 2006 on how this should be achieved, for example considering the long term consequences of any decision and the need to act fairly as between members and the company.

The net result of this is that directors are likely to need to be more careful in minuting their decisions, setting out their decision making processes and perhaps even resorting to a 'box ticking' exercise to show that all the statutory factors have been considered.

From the 14th December all properties will require a Home Information Pack to be commissioned before they can be marketed.  The concession whereby the property can be marketed provided the HIP has been commissioned but not yet completed, has been extended to the 31st May 2008.  After that date a property may not be marketed without a fully completed HIP.

The government has recognised the difficulty caused by leasehold properties, which of course usually consist of 1 or 2 bedroom properties.  As a temporary measure therefore, the only document which is mandatory and must be included in the HIP is the lease itself.  As a side issue to this, the Land Registry has recently changed its rules so that obtaining copies of leases is now much harder and can only easily be obtained by solicitors or licensed conveyancers.

As we have said before, a HIP is a legal document and therefore who better to prepare it but your solicitor who fully understands the implication of everything in it.

If you have any questions about the sale of your property or HIPs generally please contact Bryn Howell-Pryce or Karen Charles who will be happy to help.

Chancellor Alistair Darling in his Pre-Budget Report has announced that from 9^th October 2007 it will be possible for spouses and civil partners to transfer their nil rate band allowances so that any part of the nil rate band that was not used when the first spouse or civil partner died can be transferred to the surviving spouse or civil partner on their death. In effect this can double the value of assets which couples can leave behind when they die without incurring inheritance tax.

Previously the threshold above which inheritance tax was payable for each individual was £300,000 (the nil rate band allowance) and tax would be paid at the rate of 40% on assets above that limit . Married couples or couples  in a civil partnership will now have a combined threshold of £600,000 which will rise to £700,000 by 2010.

Gifts between married couples or civil partners are exempt from inheritance tax  in any event and a Will giving everything to a surviving spouse or civil partner would therefore waste the nil rate band allowance available on the first death. Now this nil rate band (or any unused proportion thereof) will not be wasted as , when the surviving spouse or partner dies the nil rate band allowance that is available on their death will be increased by the proportion of the nil rate band allowance unused on the first death.

The benefit of this combined allowance can be backdated indefinitely giving those who have already lost their spouse or civil partner the ability to take advantage of the combined allowance. The allowance is claimed on the survivor's death and it is important therefore to keep records of the value of the estate on the first death to ascertain the amount of the nil rate band unused at that time .

Will this combined allowance benefit many?

In practice we believe not as it is simply giving to most people what they already have. Many married couples or civil partners have already executed Wills to allow the surviving spouse or civil partner to take advantage of any nil rate band allowance unused on the first death. The new rules will not change the effect of existing wills so those of you who have a nil rate band trust written into your Will or have given to your children a nil rate band legacy will not have to take any action as a result of the new rules.

Those of you who have already lost a spouse or civil partner and inherited all or the bulk of the estate absolutely may want to review your wills  however, as the amount you can now give away before inheritance tax is charged will be significantly more than you had in mind when you executed your wills.

For further advice please contact Karen Charles or Anthony Guy

At some point in our lives we are all likely to be affected by a lack of capacity to make decisions, either personally, or because someone close to us is unable to make decisions for themselves.

Millions of people lose their ability to make decisions that affect their lives through illness, disability or injury.

The Mental Capacity Act will improve all of their lives. It will come into force on 1st October 2007.

The Act provides a statutory framework to empower and protect vulnerable people who are not able to make their own decisions. It makes it clear who can take decisions, in which situations, and how they should go about this. It enables people to plan ahead for a time when they may lose capacity.

The Act enshrines in statute current best practice and common law principles concerning people who lack mental capacity and those who take decisions on their behalf. It replaces current statutory schemes for enduring powers of attorney and Court of Protection receivers with reformed and updated schemes.

The Act also creates a new statutory form of power of attorney called a Lasting Power of Attorney (LPA). You are probably already familiar with an Enduring Power of Attorney (EPA) which  basically enables a person (the donor) to appoint a person (the attorney) to manage their finances only. An LPA will replace the EPA which is currently provided for by the Enduring Powers of Attorney Act 1985.The LPA will enable you (the donor) to nominate a spokesperson (the attorney) to make decisions regarding your personal welfare, including healthcare and consent to medical treatment. Different attorneys can be named for making different decisions and you will therefore have to think carefully about whom you nominate. The LPA therefore can extend to personal welfare matters as well as property and affairs.

Whereas an EPA can still be used when the donor still has capacity, an LPA will only become legal once the donor has lost capacity.

The Act creates two new public bodies to support the statutory framework, both of which will be designed around the needs of those who lack capacity

• A new Court of Protection - The new Court will have  jurisdiction relating to the whole Act and will be the final arbiter for capacity matters.  It will have its own procedures and nominated judges. 
• A new Public Guardian – The Public Guardian and his/her staff will be the registering authority for LPAs and deputies. They will supervise deputies appointed by the Court and provide information to help the Court make decisions.  They will also work together with other agencies, such as the police and social services, to respond to any concerns raised about the way in which an attorney or deputy is operating.

Although the Enduring Powers of Attorney Act 1985 will be repealed on implementation of the Mental Capacity Act, the legal effect of an EPA already made under the current law will be preserved.  You will need to draw up a separate LPA even though you will still be able to go on using an EPA after the Act is implemented  if you wish to appoint someone to deal with your personal welfare matters in addition to your finances.

If however you only require an attorney to act on your behalf in relation to your financial affairs then we strongly suggest that this is done before October.You may  also consider executing before October what is often referred to as "a living will". Although "Living Will" is not a legal term, it is referred to in the Mental Capacity Act as an advance decision to refuse treatment. It means that you can make a decision now, about treatment you would not want in future when you have lost capacity. An advance decision must be in writing, signed and witnessed, and if it applies to life-sustaining treatment there must be a statement that the decision stands even if life is at risk.

Executing  and EPA and/or Living Will before October is a much simpler and cheaper option than an LPA  which appears to have complicated and substantial cost implications. If you would like to discuss the matter further or have any questions or concerns please feel free to contact Karen Charles or Anthony Guy for assistance.