Budget 2014: Pension changes
In the 2014 Budget, the Government introduced significant changes to how members of defined contribution pension schemes can access their pension savings. The changes will come into force from April 2015. In the meantime transitional arrangements have been put in place.
From April 2015, all member of a defined contribution pension scheme will be entitled to withdraw the entirety of their pension savings as a lump sum from the age of 55. The first 25% of the withdrawal will be tax free with the remaining 75% being treated as income tax for that year and taxed accordingly.
This means that members will be free to withdraw and invest their whole pension pot as they wish rather than being restricted, in certain circumstances, to purchasing an annuity or taking a gradual income drawdown. This is likely to reduce the amount of annuities being purchased and see increasing numbers of members making alternative investments such as buy-to-let properties etc.
Budget 2014: Stamp Duty Land Tax rate of 15% for residential purchases by companies
In the 2012 Budget the Government introduced a Stamp Duty Land Tax (‘SDLT’) rate of 15% for residential properties with a value of over £2m being purchased by non-natural persons. Non-natural persons include companies, partnerships with at least one corporate member and collective investment schemes.
In the 2014 Budget, this 15% SDLT rate has been extended to properties with a value of over £500,000 being purchased by non-natural persons. This applies to properties which are purchased on or after 27th March 2014.
Validity of a Section 8 notice
In a recent case the Court of Appeal held that a notice under Section 8 of the Housing Act 1988 (‘Section 8 Notice’) was valid even though it did not contain the exact wording from the statute.
Under the Housing Act 1988, the landlord can apply for possession of a property during a fixed term on various grounds, one of which is non-payment of rent. In order to apply for possession in the case of non-payment of rent the landlord must serve a Section 8 Notice on the tenant. It is established that a Section 8 Notice does not have to contain the exact wording that is set out in the Act. However, the wording must be adequate to provide the tenant with the necessary explanation of the ground being relied on and the information to make him away of any action he could take to remedy the situation and prevent the loss of his property.
In this case the landlord served a Section 8 Notice on the tenant seeking possession and stating the tenant owed 2 months’ rent. The County Court granted the landlord a possession order. The tenant appealed to the Court of Appeal on the grounds that the Section 8 Notice was defective as it did not contain the words ‘rent means rent lawfully due from the tenant’ which are contained in the Act. The tenant argued that the additional words ‘lawfully due’ would have alerted the tenant to the fact that his counterclaim for the cost repairs that should have been done by the landlord could have been set off against the rent due.
The Court of Appeal found in favour of the landlord. Although it found that there is a difference between ‘unpaid’ rent and rent that is ‘lawfully due’, the Court of Appeal found that the wording of the Section 8 Notice that stated the rent was ‘owed’ was sufficient to make the tenant aware that he could find some basis for showing that the rent was not owed.
This case is reassuring in that it reiterates that a notice under the Housing Act 1988 will not always be defective even if it does not contain the exact wording from the Act. However, when drafting a notice, it is always safest to include the exact wording used in the Act to avoid any dispute.
Important decision regarding planning and private nuisance
In February this year, the Supreme Court delivered an important judgment relating to the principles of private nuisance.
Private nuisance is usually caused by a person doing something on their own land, which they are lawfully entitled to do, but which becomes a nuisance to their neighbour.
Whether a particular activity causes a nuisance often depends on an assessment of the character of the locality in which the activity concerned is carried out. For example, something that is a nuisance in the countryside may not be a nuisance in a city, or vice versa.
A claimant can bring a claim against a defendant for private nuisance and request:-
- Damages to compensate for its loss; and/or
- An injunction to stop a current nuisance and to prevent its recurrence.
Planning permission is not normally a defence to a nuisance claim.
This case related to a noise nuisance caused by a motocross and speedway stadium. The Supreme Court unanimously allowed the appeal by the Appellants who lived near to the stadium.
This judgment is important as it clarifies the following points:-
- It is possible to acquire a right to commit what would otherwise be a noise nuisance by prescription (i.e. by exercising the right over a period of 20 years without interference).
- In some circumstances, it may be a defence that it is only because the claimant has changed the use of, or built on, their land that the defendant’s pre-existing activity has become a nuisance.
- The existence of a planning permission which expressly or inherently authorises carrying on an activity in such a way as to cause a nuisance may encourage a court to refuse to grant an injunction and award compensation instead.
The comments in this note are of a general nature only. Full advice should be sought on any specific problems or issues.