The UK-based company, Pleese, has accused Aldi of copying its product and infringing on its intellectual property (IP) rights.

The product at the center of the claim is ‘Freezecakes’ which is a scoopable frozen cheesecake in a tub made from 40% cream cheese with flavored sauces and biscuit pieces.

Pleese claims that Aldi has infringed its rights by using an almost identical name, slogan, and flavors for its own product.

The trademark IT’S NOT ICE CREAM is used by Pleese on the Freezecakes product, and Aldi has displayed the exact wording on the alleged infringing product.

During a recent interview, an Aldi spokesperson said: “We go to great lengths to ensure that all our own exclusive Aldi brand products adhere to strict copyright guidelines.” Many would argue that is not the case.

Further, as many may already be aware, this is not the first time Aldi has been at the center of an IP dispute. For example, Aldi has been in previous disputes with Marks and Spencer over caterpillar cakes and light-up gin bottles.

The function of a trademark is to act as an indication of origin and not to gain a monopoly over the market. It can be argued that Pleese is gaining a monopoly over the market by having trademark protection in place, as it is using a generic and descriptive term such as ‘it’s not ice cream’ for the product it is selling, which is in fact not ice cream. However, Pleese is within its powers to enforce the rights it has been afforded through trademark law in the UK.

Aldi is usually up against a larger company perhaps taking its protection too far, but in this case, Aldi is potentially infringing the IP rights of a smaller company. How will the public perceive this? Could this be potentially damaging to Aldi’s reputation if it copies and passes off products created by a smaller company?

The bigger brands need to assess their claims on a case-by-case basis and take into consideration how big of an issue it could be if a smaller company starts using their branding on their products. For example, will the public be confused by the two businesses and the products? However, for a smaller company like Pleese, Aldi selling an identical product for a cheaper price could really affect Pleese’s sales and the business.

This article was written by Craig Kelly, one of our Corporate and Commercial Associate Solicitors for The Trademark Lawyer magazine.

Capital Gains Tax – Annual Exempt Amount Changes 2023/24 & 2024/25

With the financial whirlwind we were all subjected to in the last quarter of 2022, you’d be forgiven for missing a fairly significant change relating to Capital Gains Tax (CGT).

Currently, an individual has a “tax-free” allowance of £12,300 in each tax year where they can make a gain on a capital asset before a charge is due. Anything over and above that, ignoring acquisition and disposal costs for the purpose of this blog, is taxed at 10% or 20% for non-residential property gains (depending if you are a basic or higher/additional rate tax payer) or 18% or 28% for residential property gains (depending if you are a basic or higher/additional rate tax payer).

The allowance has increased gradually over time, much like the personal allowance had with income tax, until the most recent budget by Chancellor of the Exchequer (Jeremy Hunt). Among other measures, he announced that for the next two tax years beginning 2023/24, the annual allowance for CGT would be reduced by either half or more than half each year. For individuals and personal representatives (executors), in 2023/24 the allowance will be reduced to £6,000 and 2024/25 it will be reduced again to £3,000. This will have a significant impact on individuals but also on estates where assets may have increased in value. For trustees the allowance is half that at £3,000 in 2023/24 and £1,500 in 2024/25. It has been suggested by the Office for Tax Simplification, that an additional 235,000 more people will need to report their capital gains.

Whilst the need to increase tax revenues post pandemic and post Truss “mini-budget” is necessary to balance the books, it does bring into question whether the reduction in the CGT allowance will achieve this or whether it will simply result in a larger volume of returns with only a marginal increase in tax revenue.

Going forward, financial advisors and private client practitioners will need to be much more aware of smaller capital gains in order to guide clients and mitigate their CGT liability in any given tax year.

Aquabridge Law advised the sellers on the sale of Apex Lifts Group Ltd to Cibes Lift UK Ltd.

Cibes Lift UK Ltd is a subsidiary of the global giant Cibes Lift Group, one of the world’s largest manufacturer’s of low speed lifts.

Until the sale to Cibes the company was owned by the Jenchner family since being founded more than 50 years ago. Over that time, it has grown significantly and now has over 3500 maintenance contracts across the UK and an excellent reputation for lift modernisation and installation.

Corporate partners Simon Letts and Keith Vincent led the Aquabridge team with support from Harshita Samani (corporate associate) and property lawyers Kieran Lowe and Priyanka Kamal.

This is the second successful sale to Cibes Group that the Aquabridge team has advised on, during what has been a very busy period across all areas of the Firm.

For further details see the announcement from Cibes at www.cibeslift.com

There Are Two Things Certain in Life – Death and Taxes

With the recent health and social care levy putting up national insurance contributions there has been a lot of talk about who and what should be taxed. As a private client solicitor at every budget I pray that the changes are not going to be to the taxes I deal with so the advice I give on a day to day basis doesn’t need to change. However unfortunately for my profession and those individuals who are subject to inheritance tax the head of the Asset Allocation Research at Rathbones has said that an increase in inheritance tax is inevitable.

At the moment the inheritance tax rate sits at 40% and I often find clients are disgruntled by paying inheritance tax as they have already been income taxed on the money they are passing to their beneficiaries. So how would a change the inheritance tax regime actually go down?

Well, the reality is that there are a wide variety of tax planning measures in place which can help reduce your Estate for inheritance tax purposes.

Tax Legislation

The first is not really a tax planning measure as it involves the legislation itself. Provided an individual has access to their full nil rate band, each individual is allowed £325,000 worth of assets before they pay inheritance tax on their death. If they are married and leave their Estate to their spouse then this can be transferred and a couple may then have access to £650,000 worth of nil rate band on the second death of the couple.

There is another nil rate band which could be available to an individual and can be transferred within a married couple. An individual whose Estate is worth less than £2million can access a residence nil rate band of £175,000 to be applied to property which is passed to lineal beneficiaries.

Charitable Gifts

If you leave a gift to charity this part of your Estate will not be taxable. So if you gave a gift of £20,000 to the Alzheimers Society your Estate would technically be reduced by £20,000 for inheritance tax purposes.

Charitable gifts can also reduce the rate of inheritance tax from 40% to 36% if you leave 10% of your total Estate to charity.

Gifts to Other People

There are certain rules surrounding gifting to non-charitable beneficiaries. If there were not any restrictions surrounding gifting it would be very easy to be an inheritance tax advisor as you could gift away your entire Estate on your deathbed. However if you die within seven years of making a gift, unless it is very large, it will be included in your Estate for the purposes of inheritance tax.

However, there are some exceptions to this rule. There is an allowance of £3,000 per year of gifts that are able to be made without it being included in your Estate.

Where there are special events such as a marriage there can be an increase in your yearly gifting allowance. It is important to look in detail at the rules surrounding gifts which can be given at certain festivities as an incorrect understanding of the rules could lead to a gift being unintentionally included in your Estate.  

It is also possible to give regular gifts out of your income. These gifts are designed to be from your excess income and should not change your lifestyle.

Many people take advantage of gifting in order to reduce their Estates for inheritance tax. At Aquabridge our approach to tax planning is to work with accountants and financial advisors to give holistic tax planning advice. Should you wish to discuss tax planning matters please contact Samuel Flower at sflower@aquabridgelaw.co.uk or Lorna Bastian at lbastian@aquabridgelaw.co.uk

Daniel Craig to Leave his Children £0.07?

A story has been released this week that Daniel Craig finds the concept of inheritance ‘distasteful’. Daniel Craig and his actress wife Rachel Weisz are rumored to have a combined net worth in the region of $190 million but they do not intend to leave their vast fortune to their children.

Whilst being interviewed for his most recent film he was asked about leaving his Estate to his children. He quoted the adage that if you die a rich person that you have failed, he intends to spend his money or give it away. Whilst I understand Daniel Craig wanting to make sure that his children fend for themselves and learn the value of work it is quite an unusual decision to disinherit your children.

As a private client solicitor this brings two things to mind;

• Has Daniel Craig outwitted all tax advisors and removed his inheritance tax liability?
• Is there anything his children can do about being disinherited? Short of becoming the next bond villain.

Tax Position

Inheritance tax liability is based upon the amount that your Estate is worth at the date of your death. In England and Wales you have a nil rate band of £325,000 subject to any gifts you may make in the seven years before death and a residence nil rate band of £175,000, as long as you leave your home to lineal descendants, before you have to pay inheritance tax. Married couples are also able to double up their nil rate bands by passing everything to each other depending on the size of their Estate. In Estates over £2million a claw back provision applies where £1.00 of the residence nil rate band will be reduced for every £2.00 over £2 million.

However, inheritance tax is one of the heftier taxes put in place and everything over the £1 million mark is taxed at a rate of 40%. However, if you have given it all away how can you be taxed on it?

Well it largely depends on when they decide to give it away. HMRC are unfortunately a little bit too clever for you giving your entire Estate away on your deathbed. HMRC will include gifts which you have given in the seven years proceeding your death in your Estate. Therefore, Daniel Craig and Rachel Weisz will have to be very careful when they give away their Estate to make sure to do so more than seven years ago before passing away.

Is there Anything their Children Can Do?

In England and Wales we have freedom of testation. This means that you do not have to provide any assets to our children if you do not want to. You can leave our assets to the cats home or your local bartender if you so desire.

However, your family do have some ability to make a claim on your Estate for Inheritance. The family members who have the best claim against your Estate are your spouse and any minor children. They can make a claim under the Inheritance Family Provision and Dependents Act. This Act states that an individual should make reasonable financial provision for those who are financially dependent on them.

There are certain factors that a court will take into account such as the relationship between the deceased and the person making the claim, the size of the estate, the financial needs of beneficiaries amongst others.

Given Daniel Craig has not said he will be disinheriting his children and in fact just may leave them money during his lifetime or simply leaving him a smaller amount of his Estate a claim may well be unnecessary.

Should you wish to discuss Estate Planning or gifting during your lifetime please contact Samuel Flower at sflower@aquabridgelaw.co.uk or Lorna Bastian lbastian@aquabridgelaw.co.uk to make an appointment.

Does Money Bring Out the Worst in People?

As a Wills and Probate solicitor you tend to be involved in some of the worst times of a client’s life. We see people when they have lost someone very close to them and work with them throughout the grieving process. Losing someone is difficult enough without having to deal with contentious probate proceedings.

The amount of claims which are made against people’s Estates are rising as time goes on. The figures are yet to be released for 2020 but 2019 set a record for the most claims made against people’s Estates made by people wanting a larger share. Further, Wills and Probate Today have noted that the pandemic has led to an increase in adult beneficiaries making claims.

By making a claim against someone’s Estate, I am largely referring to claims under the Inheritance Provision for Family and Dependants Act 1975. Under this act individuals make a claim if they feel that they have not been fairly provided for by the deceased.

Only certain classes of individuals can make a claim against the Estate of a deceased person. For example, spouses or individuals who were financially dependent on the deceased during their lifetime. These individuals then make an application to the court for a higher inheritance from the deceased’s Estate.

However, what may prevent some beneficiaries from making a claim is that probate claims are extremely expensive. There is a particularly famous case of Scarle v Scarle which largely centred around arguments of which of a couple died first. It was a tragic circumstance of trying to decide which of a couple who died before the other as they were not discovered for an extended period. The relevant point from this case to this blog is not the circumstances of the case but the costs. The case went all the way to the High Court and the estate of both individuals only contained a bungalow and a very modest bank account. In fact, on the settlement which both parties received, it pretty much only paid their legal costs. Contentious probate cases can leave family relationships irreparably broken and as can be seen in Scarle v Scarle the parties not really better off.

So the question is, how to avoid these sorts of claims?

Whilst there isn’t anything that you can do to absolutely prevent a contentious probate claim there are certain steps that you can take to try to reduce the chances.

Put a Will in Place

If you do not have a Will you will have to rely on the intestacy rules. The intestacy rules are a statutory order in which people inherit if you die without a Will. The intestacy rules very rarely provide for the people you would have wanted to inherit your Estate. They do not take into account modern family circumstances such as cohabitation or step-children and are best to be avoided.

By putting a Will in place, you will be able to decide who you would like to inherit from your Estate, taking into account all of your family circumstances.

Talk About the Contents of your Will During your Lifetime

Whilst a Will is a confidential document which no one has the right to read until after you have died, it may help your family by disclosing the contents of your Will during your lifetime. If you feel that some of your beneficiaries would be surprised about the contents of your Will it may be best to discuss this with these individuals during your life. This may ease the ‘sting’ of being left out of Will or receiving a smaller share if beneficiaries have the opportunity to discuss the reasons for your decisions.

Put in Place a Statement of Intention

If you do not wish to discuss the contents of your Will during your lifetime or in fact do not have the ability to contact the beneficiaries that you do not want to inherit it would be sensible to put in place a statement of intention. Whilst a statement of intention is not legally binding it can go some way to explain your mindset at the time of making a Will.

This statement could be put before a Judge if your Will did end up in court and explain why you have made the choices you have. It may also persuade a family member not to make a claim if they understand your reasons for leaving them out.

No Contest Clauses

A no contest clause is a clause included in a Will designed to prevent beneficiaries who have received a smaller share under the Will from contesting it. The clause would say for example that a beneficiary is to receive £1000.00 under the Will, however if they contest the Will or make a claim under the Inheritance Family Provision and Dependants Act 1975 that they will not receive their £1000.00.

Whilst there is nothing guaranteed about a no contest Clause and a beneficiary may dispute the validity of the Will or make an Inheritance Act Claim anyway but it may prevent some beneficiaries from making a claim. 

Are Wills Entering the Digital Age?

Due to the coronavirus pandemic many different industries have been forced to modernize. Client appointments have moved to Zoom and conversations which would’ve happened face to face are happening via email. The legal industry has always tended to be a little archaic and has had to be dragged kicking and screaming into the modern world on a lot of different occasions. In fact 100 years ago I wouldn’t be writing this blog, women were not yet practicing solicitors as the profession was not deemed a suitable place for women.

So when it comes to Wills, can the law actually keep up with the times?

In order to create a valid Will in England and Wales we need to look to the Wills Act 1874. No, that is not in fact a typo, we are still working from a 147 year old act in order to deal with Wills. The relevant section of the act is section 9 which dictates when a Will is valid. This section states that a Will should be in writing, signed by the person making the Will and in the presence of two witnesses.

It is this final strand which has been challenged by the pandemic. How can the person making the Will be in the presence of two witnesses if the country is in a national lockdown. Well according to a statutory instrument which was enacted in September 2020 Wills can now be witnessed virtually.

According to the advice by the Law Society this should only be done as a last resort and if the situation dictates that an individual very urgently requires a valid Will.

You may be thinking fantastic, this will save me a journey to a solicitors office in order to sign my Will or will save me pestering my neighbors to act as witnesses, but this isn’t really the case. It is not as simple as a Zoom call in order to validly witness a Will, in fact three different Zoom calls may be required so that all parties witness each other’s signatures. Further, there is a general wariness amongst solicitors about this method of witnessing.

Wills are vitally important documents and contain the wishes of someone who cannot advocate for themselves. It is therefore not uncommon for people to try and take advantage of this. Whether that be by influencing a person to include them in their Will or by fraudulently creating a document. One of the checks on this sort of behaviour is having two independent witnesses, witness the signature of the document. If the witnesses are able to do this digitally it may well increase the chances of fraud.

Whilst there are a lot of things that need to be modernized surrounding Wills – for example the recognition of the rights of a cohabitee, I do not believe digital witnessing in its current form is one of them. Unless there was some way to check that a person making a Will was alone in a room, not being influenced by any individual and the witnessing could take place without multiple calls this is not the positive step forward into the digital age it could have been.

The Importance of LGBT+ Wills

Happy Pride Month! In order to celebrate I have decided to write a blog on the very celebratory and not at all morbid topic of making sure you have a plan in place for when you die or lose capacity. Whilst it is vitally important for everyone to have the relevant documents in place it can be particularly important for LGBT+ individuals.

Cohabitation and Inheritance Tax

If you do not have a Will in place when you die then you rely on the intestacy rules. These rules set out the order in which people inherit your Estate after you die. Unfortunately these rules are somewhat archaic. They do not take into account what your wishes would have been or who you were closest to during your lifetime they are simply based on a statutory order.

Under the intestacy rules a spouse or civil partner will inherit the first £270,000 of your Estate and 50% of the residue if you have any children. Unfortunately, the same cannot be said of cohabitees, no matter how long a couple has been together or has lived in the same household. A cohabitee has no right to inherit any of their partners Estate under the intestacy rules, the Estate may in fact end up with the parents or siblings of the deceased individual.

Further, the inheritance tax rules in England and Wales favour married couples. An individual has the ability under the inheritance tax rules to have an Estate worth £325,000 before inheritance tax is payable. If an individual then leaves their Estate to their spouse they do not pay inheritance tax on their death and their £325,000 of tax relief can be transferred over to their spouse. However the same cannot be said for cohabitees. If a cohabitee leaves their Estate to their partner then they will use up their tax relief.

With a recent study finding over half of cohabiting couples are LGBT it is important to put in place the correct Estate planning measures to ensure your wishes are carried out and tax reliefs are taken advantage of.

Children

Once again not having a Will in place can lead to real trouble where the intestacy rules are concerned. As with cohabitation the intestacy rules have not been updated as the way in which people have children has changed.

It is common for modern families to have children which they have raised or taken care of that are not biologically theirs. This is particularly common in families with LGBT parents. However, the intestacy rules does not allow for the inheritance of children who are not biologically yours unless they have been legally adopted. It is common for a child of a same-sex couple to biologically belong to one party and not the other. Further, adoption is an arduous and lengthy process which in some cases can take many months and even years.

By putting a Will in place you can leave your Estate to a named individual. The circumvents the need to rely on the law’s archaic interpretation of what is constituted to a sufficient definition of a parent and child relationship.

Transgender Individuals

The issue surrounding gender and Wills is not actually due to the intestacy rules. Problems can arise surrounding gender and Wills where a Will is not regularly reviewed.

Under the Gender Recognition Act 2004, the law (finally!) acknowledged an individuals right to legally change their gender. Under this act they could obtain a Gender Recognition Certificate which corrected the gender which they have listed on their identification documents.

Where an individual’s transition becomes relevant to Will drafting is in respect to gifts to a class of individuals for example ‘£2000 to each of my granddaughters’. This gift could have been given with the best intentions of all female grandchildren at the date of the Will to inherit £2000. However if one of the granddaughters subsequently transitioned, an application to the court would be required to ensure that he inherited following his Gender Recognition Certificate.

The key message here is to keep your Will as up to date as possible by regularly reviewing it.

The Lessons Business Owners Can Learn from Succession: 

Don’t be Logan Roy

Succession is a Golden Globe winning TV Show on HBO (Prime Video for UK viewers) which is well worth a watch, it is filled with all your favorite HBO drama elements – betrayal, deceit and a dysfunctional family. It centers around a media empire, Waystar RoyCo, whose future is thrown into chaos due to the failing health of the patriarch of the family Logan Roy. Granted I would hope in practice I wouldn’t see an 80 year old CEO make last minute announcement that he has no intention of retiring, fire a long term COO in favour of an estranged nephew and change his entire succession plan in favour of his new wife in the space of one meeting – seriously that’s just the first episode. However Succession does demonstrate the issue, albeit in a rather extreme manner, that if you do not have a plan in place for the future of your business if you were to die or lose capacity is can cause huge problems.  

It is not very pleasant to think about what would happen to your business if you lost capacity or died whilst you are still of working age. Regardless of how unpleasant it is, the reality of the situation is that not planning for the future can have a disastrous effect on your business. In 2020 research was undertaken on the effect of a lack of succession plan by an owner in a small business. This research concluded that if a business does not have a succession plan it is 20% more likely to fail and has on average a 60% drop in revenue.

This research makes it clear that it is vital for a business to have a succession plan in place but it is difficult for business owners to know where to start.

The first step is to look at the makeup of your assets and who your potential beneficiaries may be. I have often found that clients want to ensure their children inherit equally but not all of their children are involved in their business. Clients often need to undertake the difficult process of assessing whether they have enough personal assets to equal the value of the share in the business. I have seen particularly complex situations when the business involved is agricultural and involves a significant amount of farmland with development value. Trying to get the right balance of business and personal assets and who is inheriting them often requires the assistance of solicitors, accountants and financial advisors.

If there isn’t an obvious choice of a child who is involved in the day to day running of the business who do clients turn to? I have had many clients suggesting their spouse may be a sensible choice, even in cases where their spouse is not involved in the business. This can however lead clients into tax trouble as it can potentially remove the availability of business property relief which can be a vital relief for inheritance tax for business owners.

A client may also want to keep their business with the person who they built it with even if they are not related. This may be the most sensible commercial decision as it prevents any kneecapping of the business by getting outsiders (or estranged nephews) involved. If this is the case a provision may need to be made in the business documents that if an owner dies or loses capacity their family should be paid out the value of the business which is being retained by a business partner.

It may be that you need a joint approach so that your personal documents reflect your business documents. It is sensible when looking at future planning and making amendments to your Will to make future plans for your business to ensure that your business documents are up to date. It can cause confusion and a significant increase in legal fees in the administration of your Estate if for example your shareholders agreement states that your shares in a business pass to a business partner but your Will states they should be passed to your spouse.

Essentially there are a lot of options when it comes to planning for the succession of your business, whether you are wanting to keep it within your family or leave it to those who will run it more successfully. The key thing to note is here is that in order to prevent a loss of revenue and potentially even a business going bust these conversations need to happen and happen as early as possible.

At Aquabridge we endeavour to provide you with legal advice but also take into account the commercial ramifications of all decisions that are made for a business either now or in the future. 

You cannot seem to turn on the news these days without seeing the latest trends in crypto currency. Whether it is the latest over night millionaire who invested in an online currency the rest of us hadn’t heard of in the year 2000 or the poor soul who has lost their password to their online account and simply does not have access to their millions.

Clients with digital assets are on the increase and provision needs to be made for these assets in their Wills. Unfortunately for solicitors working in Wills and Probate we are still working from the Wills Act of 1837 and dragging the lawmakers into the 21st century has proved to be quite a challenge.

As it is currently stands there is no one size fits all for online currency and digital assets therefore it is vital that if you have a digital assets portfolio you speak to a solicitor who is able to provide you with the best advice. Whilst there is not a current statutory definition for digital assets it is generally understood that they would cover everything from crypto currency to digital artwork and social media platforms.

Many people will fall into the trap of believing that their current Will covers their digital assets as most Wills include a personal possessions clause. However it is possible that digital assets do not fall into the requisite definition as they are not ‘tangible’, this would be especially relevant when dealing with online creative works or the new wave of non-fungible tokens.

The way in which you choose to deal with your digital assets is as personal as the way you wish to deal with you physical property. It may be appropriate for your circumstances to include a Clause which leaves your digital assets to a chosen beneficiary or to leave your digital assets at your Executors discretion. A key thing to remember when dealing with digital assets is just because you have left your iPad to your brother does not mean you have left him all of the family photos which are stored on your iPad! It also may be the case that you do not own your digital assets at all and instead have a license to use them during your lifetime. Sadly for the avid gamers out there the currency which is collected in a game is often not transferable after your death so all those hours become lost!

The real risk when it comes to digital assets is that by not leaving a list of assets which you consider to be of sentimental or monetary value is that they become lost or inaccessible due to a lack of passwords. It is therefore essential a hard copy of passwords and an inventory of digital assets is stored with your Will to make the administration of your digital Estate as smooth as possible.