Monday 22 June 2026
Your weekly SQE Prep Quiz has arrived
Dear Subscriber,
Hope you had a great weekend. Please see below for the question, the answer to the previous question and associated resources. This is the web version of this newsletter.
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This Week’s Question: A solicitor acts for a buyer purchasing a commercial property. The firm receives one payment of £362,500 into client account, comprising £350,000 for completion, £10,000 for SDLT, £2,000 to settle an interim bill already delivered, and £500 to reimburse a search fee already paid from the firm’s business account. The engagement letter explained that paid disbursements would be reimbursed from money received. Completion is due in one week. Which of the following is the correct treatment of the payment under the SRA Accounts Rules?
A. The firm should retain the entire £362,500 in client account until completion and transfer the costs afterwards.
B. The firm should transfer £12,500 to business account because the SDLT, fees and search cost relate to the matter.
C. The firm should promptly transfer £2,500 to business account and retain the remaining £360,000 in client account.
D. The firm should transfer only the £2,000 billed fees and retain the search reimbursement in client account until separately billed.
E. The firm should transfer the entire payment to business account because an interim bill has already been delivered.
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Last Week’s Question: A testator executes a valid will leaving “my flat at 10 Market Street” to an adult son, £30,000 to a friend, and the residue of the estate to a daughter. The friend is one of the two witnesses to the will. The son dies before the testator, leaving two children. Before death, the testator sells the flat and pays the sale proceeds into a savings account, but does not update the will. Which of the following best reflects how the estate should be distributed?
A. The son’s children receive the sale proceeds, the friend receives £30,000, and the daughter receives the remaining residue.
B. The son’s children receive nothing from the flat gift, the friend’s gift fails, and the daughter receives the residue.
C. The son’s children receive the sale proceeds, the friend’s gift fails, and the daughter receives only the remaining residue.
D. The son’s children receive nothing, the friend receives £30,000, and the daughter receives the remaining residue.
E. The whole estate passes on intestacy because one beneficiary witnessed the will and one gift has failed.
Correct answer: B. The son’s children receive nothing from the flat gift, the friend’s gift fails, and the daughter receives the residue. Feedback: This question combines three difficult wills issues: ademption, anti-lapse, and gifts to witnesses. The gift of the flat is a specific gift. Because the testator sold the flat before death, the subject matter of the gift no longer forms part of the estate. The gift is therefore adeemed, meaning it fails. The son’s children do not receive the sale proceeds merely because the money can be traced into a savings account. HMRC’s inheritance tax manual explains the general rule that a specific gift fails by ademption if the property no longer forms part of the estate at death. The son’s children might at first appear to benefit under section 33 of the Wills Act 1837, because that provision can prevent a gift to a child or remoter descendant of the testator from lapsing where that beneficiary dies before the testator leaving issue. However, section 33 deals with lapse caused by the beneficiary’s prior death; it does not save a gift where the subject matter itself has disappeared through ademption. The £30,000 gift to the friend also fails. Under section 15 of the Wills Act 1837, a beneficial gift to an attesting witness, or to the witness’s spouse, is void, although the will itself remains valid. The failed specific gift and the void legacy therefore fall into the residue, so the daughter, as residuary beneficiary, receives the residue including the sale proceeds and the amount that would otherwise have gone to the friend.
The other options are incorrect because:
A wrongly treats both the sale proceeds and the witnessed gift as valid gifts.
C wrongly assumes section 33 gives the son’s children the sale proceeds.
D correctly denies the son’s children the flat gift but wrongly validates the gift to the witnessing friend.
E is wrong because the failure of particular gifts does not invalidate the whole will.
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Dr Ioannis (Yannis) Glinavos
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