In a continuing series, the Law Society’s practice advice service offers guidance on a range of issues




Q I am acting for the tenant in a transaction in which my client is required to pay the costs of the landlord’s solicitor. I have just received details of these costs, which are excessive. What can I do?



A The tenant is not entitled to ask the landlord’s solicitors to obtain a remuneration certificate, because he is not their client. However, the tenant can ask the landlord to request a remuneration certificate from his solicitors, although there is no obligation on him to do so. As a matter of practice the Law Society will accept an application for a remuneration certificate in such circumstances, but only if the landlord consents. In appropriate cases the council would hope that landlords’ solicitors would encourage their clients to give such consent.



If the landlord is unwilling to give such consent the tenant is entitled to apply to the High Court for assessment of the bill under section 71 of the Solicitors Act 1974.



Please note the Leasehold Valuation Tribunal can determine costs payable by tenants and landlords in a variety of cases.





Q My client is abroad on business and urgently needs to swear an affidavit for use in court proceedings here. Can I send the affidavit to him for swearing abroad?



A Yes. He can swear it before any person who has authority to administer an oath in that place (section 3(1) of the Commissioners for Oaths Act 1889).



Alternatively, section 6 (as amended) of that act empowers every British ambassador, envoy, minister, consul and other officials exercising their functions abroad to administer oaths there.



Please see the Law Society’s Execution of Documents book, available from our bookshop, tel: 020 7320 5640.





Q I have been approached to act in the administration of an estate in which there appear to be no living relatives. What should I do?



A If approached about the administration of an estate in which there are apparently no living relatives you should immediately contact the Treasury Solicitor, Bona Vacantia Section, One Kemble Street, London WC2B 4TS, tel: 020 7210 3116 or 020 7210 3117.



Time should not be spent on searches nor costs expended – because the Treasury Solicitor is responsible for searching for relatives of the deceased and may not be able to pay solicitors who have incurred expenditure. If the Treasury Solicitor traces relatives, they may be unwilling to reimburse costs in respect of extensive work done before they were found. Please see The Law Society’s Probate Practitioners Handbook, 5th edition, available for purchase from The Law Society Bookshop.



Please note this is the procedure to be followed if there are no living relatives. If there are beneficiaries who cannot be traced, see The Probate Practitioners Handbook.





Q My firm has just set up an internal online banking system. We propose charging our clients a fee for telegraphic transfer of funds. Will this fee attract VAT?



A The view of Customs & Excise is set out in the Law Society’s VAT Guide, page 5: ‘Telegraphic transfer fees are not disbursements for VAT purposes and, thus, must be subjected to VAT when passed on to the client’.



In the case of Shuttleworth & Co. v Commissioners of Customs & Excise (Lon/94/986A) it was held that the transfer of funds by a solicitor was part of the overall conveyancing service provided by a solicitor to his client. Therefore, a telegraphic transfer fee could not, for VAT purposes, be treated as a disbursement in the solicitor’s bill to his client.





Q My client is based overseas and is purchasing a property in the UK. Will he be liable to pay VAT on his legal costs?



A Yes. The supply of legal services in relation to UK land is always subject to UK VAT at the standard rate wherever the client is based. Customs takes the view that land-related services include all services that relate directly to specific sites or property. This would include conveyancing services, advice on the sale, disposal, transfer or surrender of an interest in or right over land or buildings, advice on title and advice on applying for or challenging the refusal of planning permission.



Customs does not regard the administration of a deceased’s estate that includes property situated in the UK as a land-related service. In order to fall outside the land-related category the legal services must primarily involve some other area, for example a company acquisition to which the land element is incidental – in such a case a single composite bill would also help to support an argument that the legal services were not land-related.





Q What is the interest rate payable on legacies?



A Legacies should be paid with due diligence and usually within the executor’s year. Practice direction 40 of the Civil Procedure Rules states: ‘Where an account of legacies is directed by any judgement, then, subject to any directions contained in the will or codicil in question, and any order made by the court, interest shall be allowed on each legacy at the basic rate payable for the time being on funds in court or at such other rate as the court shall direct, beginning one year after the testator’s death.’



The rate on funds in court is currently 4%.



This column is compiled by the Law Society’s practice advice service, 0870 606 2522. Comments relating to questions should be sent to Nasrin Master, Practice Advice Service Manager, The Law Society, 113 Chancery Lane, London WC2A 1PL.



While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.