1 Intestacy: surviving spouse or civil partner

(1) Section 46 of the Administration of Estates Act 1925 (succession to real and
personal estate on intestacy) is amended as follows.

(2) For the Table in paragraph (i) of subsection (1) substitute—

(3) For subsection (1A) substitute—

“(1A) The interest rate referred to in paragraph (B) of case (2) of the Table in
25subsection (1)(i) is the Bank of England rate that had effect at the end of
the day on which the intestate died.”

(4) After subsection (4) insert—

“(5) In subsection (1A) “Bank of England rate” means—

(a) the rate announced by the Monetary Policy Committee of the
30Bank of England as the official bank rate, or

(b) where an order under section 19 of the Bank of England Act
1998 (reserve powers) is in force, any equivalent rate
determined by the Treasury under that section.

(6) The Lord Chancellor may by order made by statutory instrument
35amend the definition of “Bank of England rate” in subsection (5) (but
this subsection does not affect the generality of subsection (7)(b)).

(7) The Lord Chancellor may by order made by statutory instrument—

(a) amend subsection (1A) so as to substitute a different interest
rate (however specified or identified) for the interest rate for the
40time being provided for by that subsection;

(b) make any amendments of, or repeals in, this section that may be
consequential on or incidental to any amendment made by
virtue of paragraph (a).

(8) A statutory instrument containing an order under subsection (6) is
subject to annulment pursuant to a resolution of either House of
Parliament.

(9) A statutory instrument containing an order under subsection (7) may
5not be made unless a draft of the instrument has been laid before and
approved by a resolution of each House of Parliament.”

2 The fixed net sum

(1) In the Administration of Estates Act 1925, after the First Schedule insert the
Schedule set out in Schedule 1 to this Act (which provides for the
10determination of the fixed net sum).

(2) The Family Provision Act 1966 is repealed.

3 Definition of “personal chattels”

(1) For paragraph (x) of section 55(1) of the Administration of Estates Act 1925
(definitions) substitute—

“(x) 15Personal chattels” means tangible movable property, other
than any such property which—

• consists of money or securities for money, or

• was used at the death of the intestate solely or mainly for
  business purposes, or

• 20was held at the death of the intestate solely as an
  investment:”.

(2) If a will or codicil containing a reference to personal chattels defined (in
whatever form of words) by reference to section 55(1)(x) of the Administration
of Estates Act 1925 was executed before the coming into force of subsection (1),
25then unless the contrary intention appears subsection (1) is to be disregarded
in interpreting the reference to personal chattels.

4 Adoption and contingent interests

(1) In section 69 of the Adoption and Children Act 2002 (rules of interpretation for
instruments concerning property), in subsection (4)—

(a) 30omit “or” after paragraph (a), and

(b) after paragraph (b) insert “, or

(c) any contingent interest (other than a contingent interest
in remainder) which the adopted person has
immediately before the adoption in the estate of a
35deceased parent, whether testate or intestate.”

(2) The amendments made by subsection (1) have effect only in relation to
adoptions whose date is the day this section comes into force or later.

5 Presumption of prior death

In section 18 of the Family Law Reform Act 1987 (succession on intestacy), after
40subsection (2) insert—

“(2ZA) Subsection (2) does not apply if a person is recorded as the intestate’s
father, or as a parent (other than the mother) of the intestate—

(a) in a register of births kept (or having effect as if kept) under the
Births and Deaths Registration Act 1953, or

(b) in a record of a birth included in an index kept under section
30(1) of that Act (indexes relating to certain other registers etc).”

6 5Amendments of Inheritance (Provision for Family and Dependants) Act 1975

Schedule 2 amends the Inheritance (Provision for Family and Dependants) Act
1975.

7 Date when representation is first taken out

Schedule 3 amends enactments relating to the determination, for various
10purposes, of the date on which representation with respect to the estate of a
deceased person is first taken out.

8 Power to apply income for maintenance

In section 31 of the Trustee Act 1925 (power to apply income for maintenance
and to accumulate surplus income during a minority), in subsection (1)—

(a) 15in paragraph (i) for “as may, in all the circumstances, be reasonable,”
substitute “as the trustees may think fit,” and

(b) omit the words from “Provided that” to the end.

9 Power of advancement

(1) Section 32 of the Trustee Act 1925 (power of advancement) is amended as
20follows.

(2) In subsection (1), in the words before the proviso—

(a) after “subject to a trust,” insert “or transfer or apply any other property
forming part of the capital of the trust property,” and

(b) after “payment” insert “, transfer”.

(3) 25In subsection (1), in paragraph (a) of the proviso—

(a) for the words from the beginning to “amount” substitute “property
(including any money) so paid, transferred or applied for the
advancement or benefit of any person must not, altogether, represent
more than”, and

(b) 30omit “one-half of”.

(4) In paragraph (b) of that proviso for “the money so paid or applied” substitute
“the money or other property so paid, transferred or applied”.

(5) In paragraph (c) of that proviso—

(a) after “payment” (in both places) insert “, transfer”, and

(b) 35for “paid” substitute “or other property paid, transferred”.

(6) After subsection (1), insert—

“(1A) In exercise of the foregoing power trustees may pay, transfer or apply
money or other property on the basis (express or implied) that it shall
be treated as a proportionate part of the capital out of which it was paid,
40transferred or applied, for the purpose of bringing it into account in
accordance with proviso (b) to subsection (1) of this section.”

10 Application of sections 8 and 9

(1) Section 8 applies in accordance with subsections (4) and (5).

(2) Section 9, apart from subsection (3)(b), applies in relation to trusts whenever
created or arising.

(3) 5Section 9(3)(b) applies in accordance with subsections (4) and (5).

(4) Subject to subsection (5), the provisions mentioned in subsections (1) and (3)
apply only in relation to trusts created or arising after the coming into force of
those provisions.

(5) Those provisions also apply in relation to an interest under a trust (not falling
10within subsection (4)) if the interest is created or arises as a result of the
exercise, after the coming into force of those provisions, of any power.

11 Minor and consequential amendments

Schedule 4 makes minor and consequential amendments.

12 Short title, commencement, application and extent

(1) 15This Act may be cited as the Inheritance and Trustees’ Powers Act 2014.

(2) This section comes into force on the day on which this Act is passed, but
otherwise this Act comes into force on such day as the Lord Chancellor may by
order made by statutory instrument appoint.

(3) An order under subsection (2) may appoint different days for different
20purposes.

(4) The provisions of this Act, except sections 4 and 8 to 10, apply only in relation
to deaths occurring after the coming into force of the provision concerned.

(5) Subject to subsection (6), this Act extends to England and Wales only.

(6) The repeals made by paragraph 4 of Schedule 4 extend to the United Kingdom.

SCHEDULES

Section 2

SCHEDULE 1 Determination of the fixed net sum

The following is the Schedule inserted after the First Schedule to the
5Administration of Estates Act 1925—

“Schedule 1A Determination of the fixed net sum

1 This Schedule has effect for determining the fixed net sum referred
to in paragraph (B) of case (2) of the Table in section 46(1)(i).

2 On the coming into force of this Schedule, the amount of the fixed
10net sum is the amount fixed by order under section 1(1)(a) of the
Family Provision Act 1966 immediately before the coming into
force of this Schedule.

3 (1) The Lord Chancellor may from time to time by order made by
statutory instrument specify the amount of the fixed net sum.

(2) 15An order under sub-paragraph (1) relates only to deaths occurring
after the coming into force of the order.

(3) The first order under sub-paragraph (1) supersedes paragraph 2 of
this Schedule.

(4) A statutory instrument containing an order under sub-paragraph
20(1) is subject to annulment pursuant to a resolution of either House
of Parliament.

(5) Sub-paragraph (4) does not apply in the case mentioned in
paragraph 6(3), or in the case of an instrument which also contains
provision made by virtue of paragraph 8.

4 (1) 25This paragraph applies where—

(a) a figure for the consumer prices index for a month has
become available, and

(b) the consumer prices index for that month is more than 15%
higher than the consumer prices index for the base month.

(2) 30The Lord Chancellor must, before the end of the period of 21 days
beginning with the day on which the figure mentioned in sub-
paragraph (1)(a) becomes available (“the publication date”), make
an order under paragraph 3(1).

(3) But if the Lord Chancellor determines under paragraph 6 that the
order should specify an amount other than that mentioned in
paragraph 6(1), the Lord Chancellor is to be taken to have
complied with sub-paragraph (2) if, within the period of 21 days
5beginning with the publication date—

(a) a draft of a statutory instrument containing the order is
laid before each House of Parliament, and

(b) paragraph 6(4) is complied with.

(4) In this paragraph—

• 10“the base month” means—

  (a)

  the month in which this Schedule came into force, or

  (b)

  if one or more orders under paragraph 3(1) have been
  made before the publication date, the most recent
  month for which a figure for the consumer prices
  15index was available when the Lord Chancellor made
  the most recent of those orders;

• “consumer prices index” means—

  (a)

  the all items consumer prices index published by the
  Statistics Board, or

  (b)

  20if that index is not published for a relevant month,
  any substituted index or index figures published by
  the Statistics Board.

5 The Lord Chancellor must ensure that the power under paragraph
3(1) is exercised in such a way that an order is made—

(a) 25before the end of the period of 5 years beginning with the
date this Schedule comes into force, and then

(b) before the end of the period of 5 years since the date on
which the last order under paragraph 3(1) was made, and
so on.

6 (1) 30Unless the Lord Chancellor otherwise determines, an order under
paragraph 3(1) must specify the amount given by paragraph 7(2)
or (as the case requires) 7(3).

(2) If the Lord Chancellor does otherwise determine—

(a) an order under paragraph 3(1) may provide for the fixed
35net sum to be of any amount (including an amount equal
to or lower than the previous amount), and

(b) the Lord Chancellor must prepare a report stating the
reason for the determination.

(3) A statutory instrument containing an order under paragraph 3(1)
40that specifies an amount other than that mentioned in sub-
paragraph (1) of this paragraph may not be made unless a draft of
the instrument has been laid before and approved by a resolution
of each House of Parliament.

(4) The Lord Chancellor must lay the report before Parliament no
45later than the date on which the draft of the instrument containing
the order is laid before Parliament.

7 (1) The amount mentioned in paragraph 6(1) is found as follows.

(2) If the consumer prices index for the current month is higher than
that for the base month, the amount to be specified in the order is
found by—

(a) increasing the amount of the previous fixed net sum by the
5same percentage as the percentage increase in the
consumer prices index between the base month and the
current month, and

(b) if the resulting figure is not a multiple of £1,000, rounding
it up to the nearest multiple of £1,000.

(3) 10If the consumer prices index for the current month is the same as,
or lower than, that for the base month, the amount specified in the
order is to be the same as the amount of the previous fixed net
sum.

(4) In this paragraph—

• 15“the base month” means—

  (a)

  in the case of the first order under paragraph 3(1), the
  month in which this Schedule came into force, and

  (b)

  in the case of each subsequent order, the month which
  was the current month in relation to the previous
  20order;

• “the current month” means the most recent month for which
  a figure for the consumer prices index is available when
  the Lord Chancellor makes the order;

• “consumer prices index” has the same meaning as in
  25paragraph 4.

8 (1) The Lord Chancellor may by order made by statutory instrument
amend paragraphs 4 and 7 so as to—

(a) substitute for references to the consumer prices index (as
defined) references to another index, and

(b) 30make amendments in those paragraphs consequential on
that substitution.

(2) A statutory instrument containing an order under sub-paragraph
(1) may not be made unless a draft of the instrument has been laid
before and approved by a resolution of each House of Parliament.”

Section 6

35SCHEDULE 2 Amendments of Inheritance (Provision for Family and Dependants) Act 1975

1 The Inheritance (Provision for Family and Dependants) Act 1975 is amended
as follows.

Children of the family

2 (1) 40Section 1 (application for financial provision from deceased’s estate) is
amended as follows.

(2) In subsection (1)(d), for the words from “who” to the end substitute “who in
relation to any marriage or civil partnership to which the deceased was at

any time a party, or otherwise in relation to any family in which the
deceased at any time stood in the role of a parent, was treated by the
deceased as a child of the family;”.

(3) After subsection (2) insert—

“(2A) 5The reference in subsection (1)(d) above to a family in which the
deceased stood in the role of a parent includes a family of which the
deceased was the only member (apart from the applicant).”

Maintenance

3 In section 1 (application for financial provision from deceased’s estate), for
10subsection (3) substitute—

“(3) For the purposes of subsection (1)(e) above, a person is to be treated
as being maintained by the deceased (either wholly or partly, as the
case may be) only if the deceased was making a substantial
contribution in money or money’s worth towards the reasonable
15needs of that person, other than a contribution made for full valuable
consideration pursuant to an arrangement of a commercial nature.”

Powers of court

4 (1) Section 2 (powers of court to make orders) is amended as follows.

(2) In subsection (1), at the end insert—

“(h) 20an order varying for the applicant’s benefit the trusts on
which the deceased’s estate is held (whether arising under
the will, or the law relating to intestacy, or both).”

(3) After subsection (3) insert—

“(3A) In assessing for the purposes of an order under this section the extent
25(if any) to which the net estate is reduced by any debts or liabilities
(including any inheritance tax paid or payable out of the estate), the
court may assume that the order has already been made.”

Matters to which court is to have regard

5 (1) Section 3 (matters to which court is to have regard when exercising powers
30under section 2) is amended as follows.

(2) In subsection (2), at the end of each of the final two sentences insert “; but
nothing requires the court to treat such provision as setting an upper or
lower limit on the provision which may be made by an order under section
2.”

(3) 35In subsection (3)—

(a) for paragraph (a) substitute—

“(a) to whether the deceased maintained the applicant and, if so,
to the length of time for which and basis on which the
deceased did so, and to the extent of the contribution made
40by way of maintenance;

(aa) to whether and, if so, to what extent the deceased assumed
responsibility for the maintenance of the applicant;”;