It is strongly advised to instruct a solicitor if you wish to prepare drafts of a new will or codicil (a document amending an existing will) so that such documents give proper effect to your wishes. Instructions for drafting a new will can be given remotely. In the current circumstances, it would be advisable to give instructions to your solicitor by video call so that the solicitor can be satisfied that they are indeed your wishes and that no one is exerting undue influence over you.

Unfortunately, the strict requirements for executing a valid will or codicil under English law have not been relaxed to take account of the current lockdown. It remains the law that the you, as the person making the will, must sign the will in the presence of two witnesses who attest your signature by signing the will themselves (whilst remaining in your presence and each other). In the current circumstances, you will need to find a way of having the execution of the will witnessed while maintaining safe social distancing practices. Case law indicates that you and the witnesses being in each other’s line of sight would be enough to satisfy the requirement that the witnesses be ‘present’ at the execution. The witnesses could therefore stand in an adjoining room, in your sight, in order to maintain a safe distance while effectively witnessing the act.

It is now particularly important to keep a record of the circumstances in which the will is executed. Make a note at the time of executing the will of who is present, where they are and in what capacity they are acting. The record will be useful evidence should the will later by challenged on the grounds of its formal validity or of undue influence being exerted on you.

Michael Rutili | Senior Associate | Private Client and Tax | London

Clients are now more than ever eager to ensure that their affairs are in order from an estate planning perspective. The following aspects should always be considered when putting in place estate planning documents (including wills, letter of wishes and nomination letters) that work comprehensively as well as tax efficiently:

• What is the domicile status of the testator?
This would be relevant to determine the law applicable to the succession as well as the possible inheritance tax implications on death.

• Where is the testator resident? What is his nationality?
This would be relevant to formalities requirements for a valid will as well as for establishing what law may apply to an individual’s succession (by way of a specific election).

• Where are the assets located?
Where there are foreign assets it is important to establish whether the will, will be recognised as formally and substantially valid to deal with these assets in the jurisdiction in question in line with the testator’s wishes. Consideration should be given to the application of foreign law regimes such as continental style forced heirship rules or sharia law and whether anything can be done to override these restrictions.

• Are there jointly held assets?
In the UK, most jointly held assets will automatically pass to the survivor. However, do not assume that foreign assets would pass to the joint owner by survivorship in the same way, as different rules may apply in the country in question.

• Is the testator married?
Is there a foreign matrimonial property regime I need to consider? This would be relevant to determine what assets pass under the will. Certain assets (or shares over certain assets) may in fact already belong beneficially to the surviving spouse despite being registered in the name of the deceased spouse.

• How do you want your spouse to benefit?
Most people will want assets to pass directly to their spouse. However, some (especially when it is a second marriage) prefer there to be some form of trust for their spouse rather than an outright gift).

• Are there minor children?
Guardianship provisions are essential to protect your minor children in the event of a premature and sudden death of both parents.

• What age would you like your children to benefit under the will?
Although the default age is 18, many people prefer to provide that their children will not take any assets outright until later, say age 25 for example.

• Who should be the executors/trustees of your will?
The executors are the individuals responsible for administering your estate and putting your will into effect, whilst the trustees (normally the same people as the executors) then administer any ongoing trusts. Often a surviving spouse will be an executor alongside one other family member or friend, or, sometimes a professional.

• Do you want to make any provision for charity?
A number of people will want to make provision for charity in their will and this can have tax advantages as well. This will range from either a specific legacy of cash or a share of the residuary estate.

• Legacies and personal belongings
Do you want to include any legacies or either cash or personal belonging to any family members or friends?

• Burial wishes
Often an individual will want to provide whether they should be buried or cremated and whether they have any funeral wishes in their will.

• Are there any pensions?
It is important to ensure that nomination forms for your pensions are completed as normally pensions do not pass under your will.

• Are there any insurance policies of which the testator is the policyholder?
UK insurance policies will normally pay the estate in the event of death unless they have been assigned to a trust in the policyholder’s lifetime. Foreign insurance policies would, by contrast, pay beneficiaries in accordance with the policyholder’s beneficiary nomination forms. So it is important to understand the type of policy and what planning can be put in place in this respect.

Mara Monte | Senior Associate | Private Client and Tax | London
Charlie Tee | Partner | Private Client and Tax | London

Deciding to use a trust could be for asset protection purposes and well as for personal tax planning reasons. If you are already thinking about creating a trust for the benefit of others then the current market conditions could present an opportunity for funding the trust in a tax efficient manner.

Transferring assets into a trust will usually trigger a 20% charge to inheritance tax if more than £325,000 is contributed for UK resident and domiciled individuals, as well as those who are treated as ‘deemed domiciled’ in the UK for all tax purposes. However, exemptions and reliefs are available in respect of certain assets, for example, certain types of businesses or AIM listed shares (for now). There may also be assets whose valuations have been disproportionately affected by the crisis that is ensuing in the global financial markets, which could be transferred into trust free of IHT and CGT due to their depressed valuation.

Capital losses will also be triggered on a transfer into a trust which, again, could be used to offset future gains which may be taxed at higher rates.

Bear in mind, however, that creating a trust means giving up ownership and control of the asses in question. The key benefits of utilising a trust can be undermined if the assets are viewed and treated in the same way as prior to contribution, and furthermore expected benefit from the assets may then come at a tax cost. Therefore, in answering the question is it a “good” time to look at trusts, the answer must be, if a trust is considered an appropriate vehicle for achieving some wider aim then creating it now may afford some tax efficiencies whilst providing for the beneficiaries in the desired way.

Choice of trustees for any type of trust will be important. In the current turbulent markets, trustees may be particularly nervous of their liability to beneficiaries if investment portfolios held by trusts suffer disproportionately (even given the unprecedented circumstances) due to actions or, indeed inactions of trustees, whether or not advised by separate investment managers. The importance of a properly drafted trust deed with suitable protections for beneficiaries is therefore vital. And on the flip side, the experience of professional trustee service providers and/or investment managers for more complex and/or bespoke asset classes may put up the costs of running trusts which will need to be borne in mind.

Natasha Oakshett | Senior Associate | Private Client and Tax | London

New emergency legislation has extended the notice period for terminating most tenancies to 3 months in most cases. These measures are temporary and apply for a period of 6 months (expiring on 30 September 2020), although the legislation envisages that this period might be extended, and that the new 3 month notice period might be extended to a period of up to 6 months.

Further, it will not be possible to obtain or enforce a possession order until after the end of June 2020 at the earliest.

A new procedural direction has reinforced the position by immediately suspending all possession claims of any kind until 30 June 2020.

The courts are likely to be under great pressure when the restrictions are lifted, so we would recommend that any termination notices are served as soon as possible.

Eloise Illingworth | Associate | Real Estate | London

The government has issued guidance for people who are buying/selling homes during the COVID-19 lockdown period. This guidance differs depending on whether the property is vacant or occupied, but stresses the need to comply with the measures for self-isolating/shielding and social distancing in all cases.

If the property is vacant, the parties may continue with the transaction provided that everyone involved complies with government guidance on social distancing. However, even in these cases it may be difficult to obtain removal services.

Where the property is currently occupied and exchange of contracts has already occurred, the parties are encouraged to reach agreement and delay the move until the government restrictions have been lifted. Critical home moves are exempt from the police emergency enforcement powers in the event that a new date cannot be agreed, however the majority of moves are unlikely to be considered critical. UK Finance has confirmed that where delays are agreed, lenders are looking at ways to support borrowers in this position, including by extending mortgage offers for up to three months.

Where contracts have not yet been exchanged, the government has stated that while there is no need to pull out of transactions, the parties are advised not to proceed to exchange unless the contract provides express provisions relating to the risks arising from COVID-19.

Michaela Belham | Associate | Real Estate | London

The imposition of the UK-wide lockdown and the restrictions on travel between countries have left some individuals, who would not otherwise be UK tax resident, marooned in the UK. UK tax residence status subjects an individual’s worldwide income and gains to UK tax (subject to claiming the remittance basis of taxation for those eligible) and in certain circumstances can also bring previous years’ income and gains into charge. UK tax residence can also have an impact on an individual’s domicile position, which affects also an individual’s exposure to UK inheritance tax.

The UK’s statutory residence test takes many factors (notably an individual’s ‘ties’) into account for the purpose of determining residence status but focuses heavily on the number of days an individual is present in the UK in a given tax year. It is possible under the statutory residence test for any individual to calculate how many days he or she can spend in the UK in a tax year (6 April to 5 April) without becoming UK resident (often referred to colloquially as the “day count”). Days spent in the UK in excess of an individual’s limit (if that individual wishes to remain non-resident) are only disregarded by HMRC in ‘exceptional circumstances’, up to a maximum of 60 additional days. Guidance has been issued stating that the following circumstances might be regarded as exceptional:

• being in quarantine or receiving advice by a health professional (or public health guidance) to self-isolate as a result of the virus;
• receipt of official Government advice not to travel from the UK as a result of the virus;
• inability to leave the UK due to the closure of international borders; or
• a request being made by the individual’s employee for his temporary return to the UK as a result of the virus.

To date, the 60-day limit to the exceptional circumstances concession has not been increased. Furthermore, a number of questions remain unanswered, such as what happens if an individual could freely leave the UK but would not be admitted into the destination country, and whether individuals must leave immediately after their 14-day Government-advised quarantine period in order to avoid accruing more non-exempt days in the UK. Advice should be sought in order to ascertain the safest course of action from a residence perspective given the circumstances and limited HMRC guidance.

Michael Rutili | Senior Associate | Private Client and Tax | London

Globally the financial markets have suffered significant losses over recent months due to Covid-19. For anyone who isn’t too afraid to look at their pension statement, the fall in value in your assets is likely quite shocking. At times like this it can be very tempting to think that you should perhaps change your investments with a view to improving your position.

Industry bodies such as the Financial Conduct Authority and the Pensions Regulator are, however, urging caution, and encouraging individuals to avoid knee-jerk reactions which could in fact worsen your position in the long-run.
Market volatility is normal, and pension investments are designed to be long-term investments which can tolerate even significant market movement. We recommend that people speak to their pension advisor and financial advisor in respect of such investments.

Bodies such as The Pensions Advisory Service can provide basic, impartial advice. Alternatively you may wish to seek professional advice on your legal options as well as financial advice. If you have started to draw your pension benefits, or if you are close to retirement, the financial impact of Covid-19 will likely have been more acute. In this situation, it is even more important that you do not act hastily, and that you seek professional advice.

Estella Bogira | Senior Associate | Private Client and Tax | London

Unless you meet very limited criteria, such as suffering from chronic ill-health, the answer to this question is “NO!”. Sadly, times of economic uncertainty and strain result in an increased number of scams preying on vulnerable people, and we have already seen a 400% increase in fraudulent activity as reported by Action Fraud at the end of March. It is very important that now, more than ever, individuals are aware of the risk of pension scams, and that you exercise extreme caution before doing anything with your pension savings.

Pension scammers may entice you by suggesting they have a mechanism for allowing you to access your pension savings earlier than you would otherwise be permitted to. Alternatively, they may promise superior investment returns or access to investments which are somehow protected from market volatility. Whatever the scam, the outcome is usually that the scammer will disappear with most if not all of the pension savings, leaving the victim of the scam with greatly depleted savings and most likely a hefty tax bill for unauthorised use of pension assets.

Pensions tax legislation heavily restricts the transfer of pension assets other than in limited authorised circumstances. If you are minded to transfer your savings from one pension arrangement to another, it is advisable to first seek legal advice on whether the proposed transfer qualifies as “authorised” and so can be made free of tax.

Estella Bogira | Senior Associate | Private Client and Tax | London

Though under UK domestic law the tax residency of a company can be determined by where its central management and control is, we would not expect that a ‘one off’ meeting which you attend virtually from the UK will be sufficient to make the company UK tax resident. However, if the current circumstances to continue for an extended period we would recommend that any strategic business decisions (e.g., decisions on the company’s fundamental business policy rather than day-to-day management) are not taken by persons physically present in the UK. We therefore would recommend the following steps:

• only your non-UK resident board colleagues should make strategic business decisions on behalf of the company;
• the board meetings should not be chaired by a UK resident director;
• you should consider recusing yourself from a board meeting or appointing a non-UK resident
person as an alternative (to the extent that is possible under the constitutional documents of the company); and
• board minutes should be drafted, ideally after each boarding meeting and not in advance,
detailing where the meeting was held, who attended (and where each member was located with a note as to why any particular members of the board could not attend in person), as well as what was discussed in the meeting to evidence the decision making process.

Ultimately, provided that you can show that the strategic business decisions are taken by persons outside the UK there should be minimal risk that the company will become UK tax resident.

HMRC have also just issued updated guidance in respect of this which gives some further comfort and states that HMRC considers that the existing legislation and guidance in relation to company residence already provides flexibility to deal with changes in business activities necessitated by the response to the COVID-19 pandemic. They add that they do not consider that a company will necessarily become resident in the UK because a few board meetings are held here, or because some decisions are taken in the UK over a short period of time. HMRC guidance makes it clear that they will take a holistic view of the facts and circumstances of each case.

Rachel Hawkins | Partner | Corporate | London

The right approach will depend on the type of business you are and how you run your operations. While specific categories of business (including restaurants, pubs & many retail outlets) have been required to close, there is no general prohibition on continuing to operate a business at present. However, as an employer, you should bear in mind your general duty of care to employees and, specifically, your obligations to safeguard their health, safety and welfare.

The current Government guidance is that travel should only be undertaken where necessary and where work cannot be done from home. Some types of work (for example, strategic or administrative roles within a family office) will lend themselves more readily to home-working than other, more site-specific jobs (such as manufacturing, or household-based roles such as nannying or housekeeping), but health and safety obligations apply equally to both.

In respect of on-site staff, while there is not an absolute prohibition on requiring employees to come to work, you should consider whether the need for work to continue outweighs the risks in requiring staff to continue travelling to work and interacting with colleagues / customers. If you decide that it does, you should think carefully about what steps you can take and/or additional procedures you can introduce to mitigate those risks (for example, by promoting social distancing in the work place and/or introducing more stringent hygiene measures).

If your operations are severely affected by coronavirus (including where your employees are unable to work due to coronavirus related caring responsibilities), the Government’s temporary Coronavirus Job Retention Scheme allows you to ‘furlough’ employees (place them on a temporary leave of absence) and claim for up to 80% of those employees’ usual monthly wage costs, up to £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. The scheme is currently open to all UK employers for at least 3 months (from 1 March to 31 May 2020), in respect of all staff who were on the payroll for PAYE purposes on 28 February 2020. The most recent guidance confirms that the scheme will cover staff employed by individuals, including nannies or other domestic workers. The HMRC portal is expected to be up and running by 30 April 2020 but you will need to be enrolled for PAYE online in order to use it. With this, and with other employment issues during this period, it will be important to communicate carefully and appropriately with staff, in writing. In particular, you should consider carefully whether you need to secure the agreement of staff before implementing any changes. A decision to furlough staff must be communicated in writing and the communication retained for five years, potentially against future HMRC audits.

Further information on this scheme and other employment considerations which may be relevant to you (including redundancy and lay off) can be found here.

Hugh More | Partner | Employment | London

If you are currently in the UK on a visa which is due to expire soon and will not be able to leave the UK prior to your visa expiry due to reasons beyond your control specifically caused by the coronavirus (ie flight cancellations, border closures, told to self-isolate, etc.), you may be eligible for an automatic extension of your leave in the UK.

The Home Office has announced that UK visa holders whose leave expires between 24 January 2020 and 31 May 2020, who are prevented from leaving the UK (for the above coronavirus reasons), and who have adhered to the terms of their visa prior to the pandemic, will have their leave extended to 31 May 2020. The Home Office has said that these individuals should not be classified as ‘over-stayers’ and as this extension is caused by reasons beyond their control, any future immigration applications should not be adversely impacted.

On the face of it, it appears that provided the listed conditions are met, the above stipulations apply to all UK visa holders, no matter what type of visa they hold. However, this does not seem to be the case. As with most Home Office guidance, the fine print is not made clear.

The Home Office has instructed that eligible visa holders should contact the Home Office’s designated Coronavirus Immigration Help Centre via the ‘COVID-19 UK Visas & Immigration form – visa extension to 31 May 2020’ online form.

The form begins with the following disclaimer: No individual of any nationality whose leave has expired or is due to expire between 24 January 2020 and 31 May 2020, and who cannot leave the UK because of COVID-19, will be regarded as an overstayer or suffer any detriment in the future. If you already have leave in the UK and planned to extend your leave when it expires, you do not need to complete this form. Please continue to apply using the appropriate online application form.

This disclaimer reiterates that the use of this form is only for those visa holders who originally did not plan to extend their stay in the UK (ie not on an extendable longer-term visa route), and who are prevented from leaving the UK prior to their visa expiry solely due to the coronavirus, and importantly this form should not be used by visa holders who would normally extend their leave to remain through an established application process (ie on an extendable longer-term visa route).

It is important to note that whilst satisfying the above criteria and successfully submitting this form should, according to the Home Office’s own published guidance, theoretically secure an extension of leave in the UK to 31 May 2020, in practical terms this is not turning out to be the case.

Visa holders should not assume that their leave will automatically be extended upon submission of the form. It is only when a visa holder receives the a reply from the Coronavirus Immigration Help Centre confirming the extension – Your leave has been extended under existing conditions until 31 May 2020. You will not be regarded as an overstayer or suffer any detriment in any future applications. However, you must make plans to leave as soon as you are able to do so. This will only apply where you hold an existing valid visa which has already expired or is due to do between 24 January and 31 May – that they can be safe in the knowledge that their immigration status has been temporarily safeguarded.

If you are a UK visa holder in or outside of the UK, or are planning to immigrate to the UK, and are having difficulty navigating the complex UK immigration system during the coronavirus pandemic, please contact our UK Immigration team who will work with you to attain your goals.

Tracy Evlogidis | Partner | Immigration | London
Rebecca Hone | Associate | Immigration | London

This is of course a stressful time for those who are co-parenting. Guidance regarding children arrangements in the UK has been released to help separated families and those with Child Arrangement Orders decide on the right approach, but the guidance may not be clear enough, and it could be exploited or misused. There are a number of useful resources in this area, and we have set out what the guidance means and our suggested principles to keep in mind when making decisions about contact arrangement for children during the crisis. Read it here

Katharine Landells | Partner | Divorce and Family | London

If you are ready to start the formal separation and divorce process, it is possible to begin this process now online. We would strongly recommend you seek advice before starting online proceedings so you know where you stand and the most appropriate course of action – there are numerous non-court options to consider. Our lawyers are available for meetings with you on Skype and other channels. The process can be managed end to end online, and in many cases without the need to go to court. There are various options available to help you deal with arrangements for children, finances, your home and other assets, and we will discuss the most suitable approach with you. The Withers Separation Model may be of interest, it is a new approach which can guide you both towards a mutually agreed resolution, quickly cost effectively, find out more here

In the meantime, if you are finding it difficult sharing the marital home during the lockdown, we have a number of resources which may help you manage any conflict which can arise:

Podcast: How to argue better
Blog: Child focused separation
Blog: The choppy waters of separation: How to argue better

For more information on a range of family and relationship issues, do listen to our podcast series ‘Mariella on Modern Relationships’ hosted by journalist and broadcaster Mariella Frostrup. Also, do check out the wide range of issues and guidance available on our family blog page.

Katharine Landells | Partner | Divorce and Family | London