We are thrilled to announce that Benest & Syvret has been re-accredited with the prestigious Lexcel accreditation for 2024.

This marks the firm's unwavering commitment to legal excellence.

Lexcel is the Law Society’s legal practice quality mark for practice management and client care. It is only awarded to firms that have achieved excellence in compliance and practice management, as well as delivering exceptional client service.

The accreditation process involves a detailed two-day audit of files, procedures, and interviews with partners and staff, ensuring an objective and comprehensive evaluation.

Advocate Nina Benest expressed her pride in the firm's achievement:

"We are delighted to announce that Benest & Syvret has been re-accredited with Lexcel. Lexcel is a Law Society quality mark for law firms demonstrating legal excellence. The assessment process is independent and objective and is testament to the hard work, file management, and personal service that the team at Benest & Syvret deliver to our clients."

Only a small percentage of law firms in England and Wales have been awarded Lexcel accreditation. Benest & Syvret is one of only two private firms holding this accreditation in Jersey since the award became available to firms outside of England and Wales in September 2010.

Partner Philip Syvret also highlighted the rigorous standards of the Lexcel accreditation process:

"The standards applied in the Lexcel accreditation are rigorous and closely monitored via an annual inspection by an independent assessor appointed by the Law Society. I am delighted that following a full two-day examination, our assessor was able to report not a single failure in compliance with Lexcel standards. Indeed, the report indicated that our risk management approach was exemplary. It was particularly pleasing that the assessor acknowledged that the ethos of providing outstanding client service was embedded within all of our team from partner level through to junior administrator."

After years of consecutive Lexcel accreditation, Benest & Syvret does not propose to rest on its laurels. 

Stay tuned for more updates and developments from Benest & Syvret as we continue to strive for excellence in legal practice and client service.

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Having recently dealt with a 17-and-a-half-foot long family tree, identifying 73 potential heirs to an  intestate estate, I am once again reminded of the importance of making a will, choosing who you wish  to inherit your assets on your death.  

Often people fail to make a will because they cannot decide upon who to benefit. As many charities  face significant financial challenges due to shortfalls in funding caused by COVID-19, perhaps it is time  to consider a charitable bequest, rather than risk the possibility of Jersey law on intestacy determining that relatives who may not have known of your existence, inherit your estate.  

Benefiting a local charity is often preferred, so that the bequest is utilised for the good of our Island.  The Charities (Jersey) Law 2014, much of which came into force on 6th March 2018 and the remainder  on 1st January 2019, introduced the Jersey Charity Commissioner, whose role it is to administer and  supervise the operation of the Law.

The Commissioner is required to perform his or her function in a  way that, in so far as is reasonably practicable, protects public interest and confidence in charities  registered under the Law. To register under the Law a charity must satisfy several requirements including, producing statements relating to the public benefit and charitable purposes of the charity,  the names of the governors of the charity, financial information (including total income and  expenditure, and the value of its assets), details of any payment made to a governor and details of any  reportable matters as set out in the Law in respect of each governor (e.g. conduct issues). Once  registered this information is publicly available. This goes some way towards alleviating public  concerns of mis-management of charitable funds. When considering charitable bequest, you may  therefore wish to make enquires as to whether your chosen charity is registered with the Jersey  Charity Commissioner. A list of registered charities, including the information set out above, is  available on the Jersey Charity Commissioner website.  

To receive a gift of Jersey immovable property (e.g. freehold or flying freehold property) a charity must  be an incorporated entity. Many smaller charities in Jersey are unincorporated and in those cases the  members of the charity take personal responsibility for entering into contracts on behalf of the charity  and for the debts of the charity. Charitable Trusts and Foundations are also unincorporated entities  and may not own Jersey immovable property. An incorporated entity has a legal existence separate  from and independent of its members. An incorporated charitable entity will typically either be an  incorporated association registered under the Lois (1962 et 1963) sur les teneures en fidécommis et  l’incorporation d’association or a limited company. Should you wish to benefit a charity in your will  of immovable estate, it is imperative therefore that the charity is incorporated, otherwise the gift will  fail and your immovable property will be inherited by your heirs-at-law, in the absence of any fall-back  provision in your will.  

Where a person dies without making a will relating to movable property (cash, investment, jewellery,  household contents etc), their surviving spouse or civil partner inherits the household effects, £30,000  and half of the remainder of the estate. The issue of the deceased (children and failing that  grandchildren etc) inherit the remainder. Where there is no spouse or civil partner, the issue inherit  equally. Where there is no spouse, civil partner or issue, the inheritance is referred to as a collateral  succession. The estate is inherited by the closest blood relatives identified in accordance with what is  referred to as the civil (or Roman Law) method. 

Where a person dies without making a will relating to immovable property, their spouse or civil  partner inherits the life enjoyment of the matrimonial home (presuming that it was not owned jointly for the survivor of the couple) and an equal share in the remainder, with each of the issue. Where 

there is no surviving spouse or civil partner, the issue inherit in equal shares. Where there is no  surviving spouse, civil partner or issue (a collateral succession), who inherits is determined by whether  the immovable property is what is known in Jersey Law as an acquêt or propre. Essentially an acquêt is property that the deceased purchased during their lifetime and a propre is inherited property.  Different succession rules apply depending upon whether a propre is inherited from the maternal or  paternal side of the family.  

It is evident that Jersey law on intestacy is complicated and the application of its rules may result in  unknown and potentially undesired outcomes. It is important to take professional advice on these  matters. Including a charity in your will, either as primary beneficiary or a fall-back beneficiary in the  event that your close family predecease you, may be a desirable option in many cases.

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Stamp Duty on Immovable Property (Freehold/Flying Freehold) on Death

Stamp duty payable on immovable property on death can be significant and requires careful  consideration when estate planning. By way of example, stamp duty on a property with a value  of £1,500,000 is £47,000.  

Where a person dies intestate (without leaving a will) relating to their immovable property no  stamp duty is payable and ownership transfers automatically to their heirs at law. Despite this  it is advisable to make a will. Making a will which is registered in the Public Registry following  your death provides certainty as to who owns the property and allows you to choose who  inherits and in what shares.  

Are there any stamp duty exemptions?  

Most married couples and civil partners own their freehold property jointly for the survivor of  them. In such cases ownership passes to the survivor on death and no stamp duty is payable regardless of the value of the property. Where the family home is owned by one of the couple  and they leave it to the other by will, the transaction is exempt from stamp duty. However, if  there is more than one property and there are children involved, the situation is not so  straightforward. 

In the event the last surviving parent leaves their immovable property to their children equally,  again no stamp duty is payable. This arrangement may not always suit, particularly where a parent wishes to leave the property to one of their children.  

When a will leaves immovable property to some or all of the children, but not in the  proportions set out in the law on intestacy, or where identified properties are left to specific  children, it is possible to obtain a concession on stamp duty from the Registrar of Deeds on a  case by case basis. This usually results in some reduction on the stamp duty payable.  

I am due to inherit immovable property. Can I reduce stamp duty?  

Where you are due to inherit movable property (e.g. bank accounts, investments, share  transfer property) it is possible to vary the terms of the will as part of an estate planning/tax  saving initiative. It is not possible to vary a will relating to Jersey immovable property.  

There are however other means of reducing stamp duty in these circumstances, for example  by renouncing an inheritance and/or generation skipping.  

Do Charities pay stamp duty?  

An incorporated charity may inherit immovable property. Typically such charities will be an  incorporated association registered under the Loi (1862) sur les teneures en fidécommis et  l’incoporation d’association (as amended) or a limited company. Such charities are usually  exempt from payment of stamp duty on registration of a will of immovable estate.  Unincorporated charities may not receive Jersey immovable property.  

Should I transfer ownership of my home to my children and retain a life interest?  

Transferring ownership of your home to your children whilst you are living triggers full stamp  duty. There are no exemptions.  

Importantly, where an applicant for Long Term Care financial assistance has transferred  ownership of their home to other family members at any time in the past, and has continued  to live in the property by retaining a life enjoyment, the full value of the home will be included  in their financial assessment for Long Term Care. 

It is evident that stamp duty implications on death may result in potentially undesired  outcomes for your loved ones. It is important to take professional advice on these matters. A  little planning may result in significant savings. 

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Philip Syvret, Head of the Property Team at Benest & Syvret looks at the tangled web of stamp duty on buy to let property purchases and calls for a radical rethink.

Never trust a politician who promises that a tax will be temporary! Did you know that stamp duty was first introduced in England in 1694 to help fund the war with France? It was said to be a temporary measure. But, if you'll pardon the pun, somehow it stuck! 

Such was the ease of collection and the level of revenue recovered from stamp duty over the years it came to be applied to items as diverse as playing cards and printed publications. Some may even remember that in the middle of the last century there was a stamp duty on a cheque. 

There remain in Jersey's tax rules some relics of the tax man's fondness for stamp duty, but most are now relatively low-cost duties. Not so however, in respect of property transactions. In recent decades the Treasury has seen the taxation of property buyers as a nice little earner and the duties payable have become ever-more prominent and expensive. 

I say "little" earner, but that rather depends on your perspective. The median price of a three- bedroom house in Jersey in 2022 was £866,000. To purchase that you'd have to pay the tax man a shade under £20,000 in duty. Want a median-priced 4 bed house and your tax is £38,000. As a consequence, stamp duty on property transactions in Jersey during 2021 brought in the immodest sum of £62 million. 

On the face of it stamp duty is an easy win for the Treasury and their political masters. They like a duty which taxes those for whom many of the public hold only a modicum of sympathy. If you can afford to buy a house at £866,000, let alone buy a second house to let out, then you're fair game. 

It seems that it was this mindset that led to the introduction, a few months ago, of a surcharge of an additional 3% above the standard rate on people buying an additional home to let out. On the £866,000 3-bedroom home, a prospective landlord has to pay a whopping £45,880 in tax in order to provide a rental home for a family to occupy. 

If you think that's bad some of our States Members voted for the surcharge to be 10%. Ironically the report to the States said that the 10% surcharge would be temporary until the present housing crisis had passed - where have we heard that before? 

The rationale for this punitive surcharge was that prospective landlords were outbidding first time buyers and mopping up a large share of the already limited supply of homes. This was based on what was described as "anecdotal evidence" in the report to the States. The projet candidly acknowledged that Government had almost no data to underwrite the rationale. Hardly a valid basis for such a significant new tax. 

As a lawyer I dislike propositions which are not based in evidence. Given the failure of Government to produce Jersey data, we must look across the water for a steer. 

In 2016 George Osborne introduced a similar 3% surcharge for buy-to-let properties. Hamptons, an agency respected for its detailed analysis of the UK market, reported that the proportion of first-time buyers coming up against an investor when bidding on a property was just 19% in 2020 – in effect only a one in five chance that a first-time buyer could be edged out by an investor. 

Was this as a result of investors being disincentivised by the surcharge? In the absence of evidence, we cannot be sure. One thing is certain policy on the hoof supported by anecdotal evidence is unsatisfactory, particularly where that policy carries risk. 

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And the risks of increasing the costs of buy to let investments are clear. The higher the cost of acquisition, the higher the return has to be. The additional costs will therefore have a direct inflationary effect on rental rates. Equally, less investor buyers will mean fewer rental properties available. Unless Andium and Housing Trusts can build so quickly that they can meet the extra demand, less supply with demand remaining constant, will again contribute to higher rental prices. With an economy already reeling from high rents, those risks seem to me to have been too great for a policy to have been set upon merely "anecdotal evidence". 

In turn, often property purchases are part of a chain of transactions, many with an investor purchaser somewhere in the mix. Reduce investor activity and those chains miss a link. Property transactions will therefore stall to the detriment of all, including the revenue takers. 

If the intent of the surcharge was to help first time buyers then there were clear alternatives. Let's consider a few. 

The surcharge is intended to create a difference in cost to purchase between first time buyers and investors. The investor has to pay more to buy so the theory is that he will run out of steam in a bidding situation earlier that the first-time buyer. 

That advantage to the first-time buyer can however be created by reducing (or dare I say abolishing altogether) the stamp duty payable by a first-time buyer. Youngsters would not need to raise the stamp duty costs through savings or borrowing, but a material difference in the purchase cost between them and investors will be maintained, 

Such a solution would have been common sense where first-time buyers are being pushed away from purchases because of inflated prices already built into the market and the recent hikes in mortgage rates. First-time buyers are more likely to be near the credit limit and unable to extend borrowing to cover stamp duty. Reducing the cost of stamp duty for those 

buyers would have been the better way forward. I have a fear that the tendency to wallop tax on the wealthier (for whom the public sympathy would have been limited) might have clouded the judgment of our policy makers here. 

Presently, even if you are a first-time buyer, on a purchase of a property valued at more than £500,000 you will not benefit from a reduced rate of stamp duty. In a market where median priced 3-bed houses are £866,000, that £500,000 threshold is unrealistic. It means that full stamp duty is in fact paid by many first-time buyers. 

Tragically, those saving hard for their deposit have not only seen house prices race away from them in recent years, but also those prices exceeding the threshold for a lower stamp duty, meaning that more money has to be found to purchase. 

It is beyond time that the threshold for the reduced stamp duty rate for first-time buyers is adjusted to a meaningful figure. Further, that figure should be pegged to the house prices index going forward so it does not fall out of kilter with the market in the future. 

The downside of these alternatives, the bean counters would say, is a loss of revenue to the Treasury. If we are determined to find a fix to the housing crisis (and we must), then that measurable loss in revenue can be addressed by savings in expenditure. The failure by Government to meet its own targets for savings reported in recent weeks, and the shocking dissembling approach to the reported savings that went with that, is a matter which needs to be addressed. 

In turn we should perhaps consider why we have stamp duty at all? It clogs the property system, forcing people to stay in property whether rented or owned, which they may not want. The inflexible slab structure of different rates for different value properties creates irrational inequalities. Freeing the property market of these impositions would create a better turnover of property which in turn produces other taxable economic activity. 

In the 21st century, faced with our own peculiar housing crisis, it is time perhaps for a radical rethink rather than clinging to a "temporary" system created in 1694. 

Philip Syvret, a solicitor with Benest & Syvret, has advised on many of the Island's largest residential property development and is a regular commentator on housing policy.

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As of March 24th 2023, Jersey law will require residents to wait until they are 18 years old before tying the knot.

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Philip Syvret, a Partner at Benest & Syvret has advised on the legal structures for some of the island's largest housing developments.

Here, he explains the social impact of rising house prices in Jersey.

This article originally appeared on bailiwickexpress.com

Every time I advise on a property purchase I am required to look back at the history of the property, principally to check the boundaries and the rights and duties that have accumulated in the property’s history over the years.

My eyes however are often drawn to the price for which the property has sold over the last few decades.

Last week I was looking at a property on what was a social housing development in St. Brelade, first constructed in the 1960s. When its first owner sold and moved on in 1974 he sold the property for £14,000.00. In 1990 it changed hands again, then for £90,000.00. By the year 2000 it was sold for £208,000.00. Somewhat remarkably at the end of last year it sold for a total of £795,000.00.

Whilst I accept that the property has been improved and extended, the basic footprint and layout is much the same as it was in 1974.  It has however, seen an eyewatering increase of over 5,000% in value in the 50 or so years since it was built.

There can be no doubt that the trajectory of Jersey house prices has been remarkable.  If one stands back from the detailed statistics, broadly speaking, house prices have doubled every ten years.  Sometimes prices have levelled out for a few years and then seen a dramatic spike, as in the last three years or so, which have contributed to that doubling.

This little exercise on the price of a simple St. Brelade property made me reflect on the affordability of Jersey property and the large volume of gifting or loans that we are seeing from what is often termed “the Bank of Mum and Dad.” Previous generations in Jersey have accumulated capital, often from the dramatic rise in property values and are now lending that forward to the younger generations of their family.

These days all lawyers are required to focus very carefully on the source of funds for a transaction.  We now know with intimate detail where every last penny for a property purchase is coming from.  It has become clear in recent years that the Bank of Mum and Dad is one of the most important of lenders in the Island, whilst perhaps not from a total monetary value, but at least by numbers of transactions.

With an average mean full-time salary in Jersey at a little over £44,000.00, and with the salary of a first-time buyer in their early or mid-twenties undoubtedly somewhat less than that, that volume of parental assistance is perhaps unsurprising.  

A person looking to buy solo a reasonable one-bedroom or even a two-bedroom flat with parking, will now need somewhere between £50,000.00 and £60,000.00 in cash to pay a ten percent deposit and related costs of buying.  Expressed as a multiple of net salary for a youngster setting out, that is almost impossible.  The prospect of buying a three-bedroom family home on its own plot, as that buyer of the St. Brelade house did in 1974, would be almost an impossible dream. 

Having family who are both able and willing to give financial support their youngest generation gives those first-time buyers a significant advantage.  The higher the value of the deposit, the more preferential the interest rate on a mortgage that can be achieved.  The recent sharp raises in mortgage rates has made this factor all the more important.  House prices may have been high relative to incomes in recent years, but low interest rates kept mortgage payments relatively affordable, even for those borrowing large amounts.  

The challenge has not been, insofar as I can see, paying the monthly payments.  Instead it has been getting hold of the deposit.  Ironically with mortgage rates going up, those two factors have combined.  The higher deposit available, the better the mortgage rates that will be available. The need for a significant deposit with help from Mum and Dad has become all the more important. 

There is of course an elephant in the room here.  For an inter-generational gift to be made, Mum and Dad or family need to be in a position to advance funds. It came to mind that we are perhaps seeing as a consequence an inequality gap being created where those with prior family wealth are the only ones who can truly have aspirations for Jersey property ownership.  

Whilst there are shared equity schemes in respect of certain publicly funded developments, there is no such scheme supporting young buyers in the open market.

There are of course subsidiary advantages in having a family who can contribute to deposit funds.  Receiving wealth earlier in life allows a property investment to be made earlier and thus a longer time to enjoy the growth in value like the owners of that property in St Brelade saw.  

Those who don’t have the benefit of family wealth that can be passed down between generations during lifetimes rather than by inheritance, therefore see yet another disadvantage.  

Equally having that extra £10,000 to pay for a higher deposit puts that slightly better property within reach, meaning better family facilities and a better start in life for children. Again, my concerns as to inequality within our Island community arose. 

There are of course positive aspects to the increasing importance of the Bank of Mum and Dad. It may be that it reasserts the importance of the family as a social group.  Children will need to live longer with their parents to save a deposit.  Equally the parents may say “we will assist you, but in turn this is so you can stay in the Island and assist us later in life”. From a social point of view, it is an interesting mix of interactions.  

If government are genuine in their desire to address such concerns, then the focus cannot solely be on constructing large volumes of social housing apartments in the hope that increased supply will reduce prices. Equally tinkering with the supply chain of homes by walloping buy-to-let investors with huge stamp duty rises is not the way forward.   

Neither of those strategies will genuinely address the inequality that those who don’t have the backup of Mum and Dad suffer. A sustainable shared equity scheme for all properties, not just States backed entities, is one that screams for attention. I see that as government’s duty to the younger members of its community, rather than hoping that everyone has a friendly Bank of Mum and Dad.

For legal advice on property in Jersey, contact Philip and the team here.

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