Archive for September, 2016

Succession (Scotland) Act 2016

Tuesday, September 20th, 2016

A WillThe Succession (Scotland) Act 2016 will come fully into force on 1st November 2016.  This is the first significant reform in this area of law for over 50 years.

The 2016 Act implements a number of technical legal changes and addresses a number of anomalies within the current legal framework.  This Act is likely to be the first stage in what is anticipated to be a two-stage reform of the law of Succession in Scotland.  The second stage of the proposed reforms on which the Government consulted towards the end of last year could result in a far more radical and controversial overhaul of the law on Succession as we know it, including changing how an estate is distributed if an individual dies intestate, without making a Will.

The key reforms in the 2016 Act are as follows:

  1. If your Will contains a mistake, the Act makes it possible to apply to the court within a certain period of time to have the Will rectified, but this will only be possible if the Will was prepared by someone other than you and there is evidence that the Will does not reflect what you instructed.
  2. If you die on or after 1st November 2016 and your ex-spouse or ex-civil partner is named as a beneficiary and/or appointed as executor in your Will, then that bequest will no longer be valid unless you make it clear in your Will that this bequest is to stand.
  3. If there is a survivorship destination, also commonly known as a special destination, in title to property held by you and your spouse or civil partner, which provides that on the death of one of the spouses or civil partners, their title automatically passes to the survivor, this will not take effect if you get divorced, your civil partnership is dissolved or your marriage is annulled.
  4. Currently, if you have a Will and then make a new Will and then change your mind and cancel the new Will, the previous Will would revive and dictate how your estate would be distributed.  The Act changes this so that the previous Will would not automatically be revived.
  5. If you leave a legacy to a direct descendant, ie a child, grandchild or great-grandchild only, and that beneficiary predeceases you, then that beneficiary’s descendants would automatically inherit in place of the predeceasing beneficiary unless you clearly state otherwise in  your Will.
  6. If you set out a time period in your Will by which a beneficiary must survive you in order to inherit, and if it there is any uncertainty as to whether the beneficiary survives for that period, the Act introduces a new presumption that the beneficiary has not survived for the specified period.
  7. Where a person dies without a Will, and an executor requires to be appointed by the court, an insurance policy known as Bond of Caution is normally required (although this is not always required where the executor is the surviving spouse).  The Act abolishes the requirement to find Caution where the estate is classified as a “Small Estate” which is currently an estate valued at less than £36,000.
  8. The Act gives Trustees and Executors protection where they have incorrectly distributed assets provided they have done so after making reasonable enquiries and in good faith, or in accordance with an order of the court.

Should you have any queries about how the Act may affect you, or should you wish to discuss any matter in relation to Succession or the making or updating of your Will, please contact our Philip Dawson (p.dawson@jgcollie.co.uk) or Vivienne Bruce (v.bruce@jgcollie.co.uk).

JAMES AND GEORGE COLLIE CHARITY FUND RAISING

Tuesday, September 20th, 2016

James and George Collie are proud to be raising funds for both Maggie’s House and Mrs Murray’s Cat and Dog Home throughout 2016. Both charities were selected by staff at the Firm and signify causes close to their hearts. We are pleased to report that we are on course to eclipse the total funds raised for charities in 2015, and will be presenting cheques to both these charities at the end of the year. The staff currently fundraise through dress down days every month, as well as holding charity lunches and raffles, and raising funds at our annual BBQ.

In addition to the two selected charities, the Firm will be supporting the Macmillan Cancer Support “World’s Biggest Coffee Morning” on 30th September by holding the “Great Collies Bake Off”. Two of our partners will take on the role of judges as 1 East Craibstone Street’s most skilled bakers contend for the title. On 21st October, all staff will be encouraged to wear pink in support of Wear It Pink Day and standing up to Breast Cancer. We are also supporting Inspire’s ongoing used stamp appeal to raise funds for people of all ages with learning difficulties throughout the North-east of Scotland.

We will be continuing our fundraising next year when two new charities will be selected by staff. If you have any comments or wish to support the charitable fundraising at James and George Collie, please feel free to get in touch with your usual contact at the Firm.

Residential Tenancies – an update on future developments

Tuesday, September 20th, 2016

The Private Housing (Tenancies) (Scotland) Bill was recently passed by the Scottish Parliament and is expected to come into effect perhaps as early as 2017.

The aim of the legislation is to create simpler tenancies, offer stability and security for private tenants and ensure predictability over rent increases. It also fundamentally changes the nature of the relationship between landlords and tenants from contractual to statutory. A single new tenancy type called a ‘Private Rented Tenancy’ will replace the current Assured and Short Assured regime, though exceptions will apply to purpose-built student accommodation and holiday lets.

The main measures contained in the Private Housing Tenancies Scotland Bill include:

  • Enhanced security for tenants, with the loss of the “no fault” ground, which allows landlords to seek possession of a property on the basis that the agreed period of let has come to an end;
  • No defined term of a lease and no minimum period of let;
  • New grounds for recovery of possession, some mandatory and some discretionary;
  • Rent increases limited to once every 12 months and with a right for tenants to refer matters to a rent officer;
  • The opportunity for local authorities to implement restrictions on rent increases in areas where there are excessive rent increases by the creation of Rent Pressure Zones;
  • Simplification of notice requirements with the replacement of Notices To Quit, Section 33 notices and Section 19 notices (AT6) by a new Notice to Leave with two notice periods for landlords and one for tenants and no need for pre-tenancy notices;
  • Introduction of a model tenancy agreement with mandatory clauses.

Supporters of the legislation argue that this creates a more streamlined and modernised system.  Pre-tenancy notices which can set out specific, tailored grounds for landlord repossession of that property will become a thing of the past and it is envisaged that tenancy agreements will be easier for all parties to understand.

Rent predictability is another policy aspiration of the legislation.  Landlords will be unable to increase rents any more than once per year and will have to provide three months’ notice when doing so. The tenant will also have the option to challenge what they deem to be an unreasonable rent increase by referring the matter to a Rent Officer who can then determine a ‘fair’ rent.  The Rent Officer’s decision can also be subject to appeal to the Private Rented Sector Tribunal.

Finally, a local authority will also have the ability to create designated ‘rent pressure zones’.  This will enable councils to apply rent caps in areas they determine have been subject of excessive rent increases in recent times.

Should you wish to discuss any aspect of this article, or indeed require advice on renting a private dwelling, please contact Senior Solicitor, Mary Birse, in our Stonehaven Office on 01569 763555 or by email at m.birse@jgcollie.co.uk

Brexit Decision Made: The Divorce, the Fallout and the Reaction

Tuesday, September 20th, 2016


Now that the United Kingdom has chosen to head for the EU exit door, the ramifications for investors, savers and borrowers have been quick to be felt. Falling interest rates, Sterling weakness and market volatility are already with us and once ‘Article 50’ is invoked things will really start to happen.

The initial market reaction was a significant fall in both sterling and UK equities as fear and uncertainty reigned for investors. However, this was shortly followed by a significant recovery in equity markets which has resulted in strong performance for many assets over the period.

Overseas assets have been boosted in Sterling terms by the currency devaluation, whilst UK equities recovered on hopes that the Bank of England will provide further stimulus as a consequence of the Brexit vote. During the reporting period the FTSE 100 increased in value by 6.54% and the FTSE World Index by 8.71%. Fixed interest investments were also boosted in value as the expectation of future interest rate rises lessened dramatically, leading the FTSE Gilts All Stocks Index to increase in value by 6.18%.

In the meantime, Standard & Poor’s and other ratings agencies have reduced their view of the creditworthiness of the UK, warning of further downgrades due to lower economic growth expectations. Despite this the effect to date for investors has been generally positive and some investors will be surprised that their portfolios have risen sharply as a result of Brexit.

In fact, there may be more positives than investors perceive right now. The almost overnight devaluation in our currency is something which other Western economies have being trying to achieve for many years, as the benefit of a weak currency is that exports become cheaper and imports more expensive, boosting demand for domestic goods and services. The Brexit effect has created a 10% price cut for UK exporters.

From an investment perspective, the referendum result was a shock to global markets and initial thoughts were of a disorderly and rushed exit from the EU. As the initial shock subsided, it became clear that this exit will be over a number of phases and on a glacial time scale rather than a ‘quickie’ divorce. The uncertainty will continue and lead to market volatility.

Prior to Brexit we believed that economic progress was likely to exceed expectation with signs that the second half of 2016 could experience accelerating growth. This indication is no longer valid as the effects of the referendum are unknown as we await further Post Brexit data to come through.

Initially, signs of falls in confidence have been observed with downgrades to UK, European and Global growth being reported by many agencies. This reflects apprehension, which is understandable, and if indicators improve in the short term this will be positive; however sustained falls will cause concern and could reverse the recent upward momentum in markets.

In the meantime, we continue to believe that investors should accept the volatility of equity markets for modest medium and long term returns, rather than leaning towards the near-zero return of cash and bonds. We further believe if you are not already doing so that you seek independent financial and tax planning advice to check and ensure that your financial arrangements are fit for purpose now and for your future. If they are not, then appropriate changes will require to be made to put you on track and move forward accordingly.

Should you wish to discuss any aspect of this article or indeed arrange to meet with one of our financial advisers, please contact Doug Blanchard of James & George Collie Financial Management in the first instance by email at FSDepartment@jgcollie.co.uk

Pre-nuptial Agreements – for one and all!

Tuesday, September 20th, 2016

The popularity of the pre-nuptial agreement in Scotland is continuing to grow and we are regularly asked to prepare and advise on such agreements.  These are not just for international celebrities with vast fortunes, but can be equally as important for the man and woman in the street.

A pre- nuptial agreement is a contract between two parties who intend to marry.  It is a popular way to protect assets in the event the subsequent marriage breaks down.  A properly drawn up pre-nuptial agreement is likely to be binding upon both parties.   Scots Law has acknowledged the effectiveness of the pre-nuptial agreement for many years.  In England, high profile cases have illustrated the increased weight and importance of such agreements.

Typically, pre-nuptial agreements are used where one or both parties have existing assets, such as a property or savings or have inherited funds.  Individuals will seek to “ring-fence” those assets with the intention of excluding them from division in the event of separation or divorce.  In addition, the pre-nuptial agreement may stipulate that anything bought with the proceeds of a particular asset will be excluded from division between the parties upon separation. It can generally be tailored to suit individual needs.    It is important to give consideration to future aspirations, plans and likely events.  The pre-nuptial agreement may also provide for the agreement to be reviewed, for example, if children are born or there is a major change in circumstances of one or both parties.

Pre-nuptial  agreements can be set aside by court if they are deemed to be unfair or unreasonable at the time they were signed.   The classic case where one party has been strongly encouraged by the other party to sign an unfavourable agreement on the eve of the wedding, may be construed as being unfair.  It is important that both parties are given the opportunity of obtaining independent legal advice prior to signing the agreement and that it is discussed well in advance of the wedding to avoid such a scenario.

Should you require advice on Pre-nuptial Agreements or indeed any other family law or matrimonial matter, please contact Senior Solicitor, Susan Waters, in the first instance on 01224 581581 or by email at s.waters@jgcollie.co.uk