7 12 Surrogacy, parenthood and the limits of traditional trusts
- Rose-Marie Drury & Katharine Watson
Can AI really write your will? - Emma Fosh
The UK’s Temporary Repatriation Facility: A three-year window of opportunity
- Alice Ogden 18
Managing social media and privacy during divorce
- Richard Dawson-Gerrard
2 Rings, romance and regret
4 Surplus income gifting: A powerful but overlooked inheritance tax exemption
7 Surrogacy, parenthood and the limits of traditional trusts
10 60 seconds with… Rachael Armstrong
12 Can AI really write your will?
14 Why more families are exploring Swiss education
16 The Renters’ Rights Act and the future of residential asset strategy
18 Managing social media and privacy during divorce
20 The UK’s Temporary Repatriation Facility: A three-year window of opportunity
22 Protector, interrupted
24 Welcome to the team
What happens to the ring if an engagement doesn’t lead to a wedding?
We take a look at surplus income gifting, an often overlooked inheritance tax exemption.
As routes to parenthood change, the laws around traditional trusts haven’t necessarily kept up.
We sat down with Rachael Armstrong from our private client team in Birmingham.
Managing social media during divorce or relationship breakdown can be a minefield.
The UK’s tax code for internationals has been overhauled to encourage settlors to wind up their non-UK trusts.
Chris Belcher Partner, Head of Private Wealth chris.belcher@mills-reeve.com
Welcome to the Summer 2026 edition of Private Affairs
The articles in this edition reflect both the technical developments shaping the market and the human context in which those developments sit.
There is, as ever, a strong focus on inheritance tax and succession planning, whether through the practical application of exemptions such as surplus income gifting, the evolving treatment of trusts, or the strategic considerations facing business owners. Alongside this, we explore the implications of wider tax reform, including the introduction of the Temporary Repatriation Facility and the changing landscape for internationally mobile families.
But this edition also recognises that estate planning doesn’t exist in isolation. It’s intertwined with family dynamics, personal relationships and societal change. Articles on surrogacy and the limits of traditional trust structures, the legal treatment of engagement rings, and the management of social media during divorce all highlight the extent to which the law must continually adapt to modern living.
We also turn to emerging risks and opportunities. From the increasing sophistication of fraud in alternative investments, to the practical realities of residential property ownership following the Renters’ Rights Act, and the growing interest in international education as families take a broader view of lifestyle and legacy.
Threaded throughout is a common theme: the need for clarity of advice, documentation and communication. Whether considering the role of AI in will writing, the governance of complex trust structures or the positioning of assets for future generations, the value of thoughtful, tailored guidance remains paramount.
We hope this edition provides both insight and practical perspective as you continue to navigate a period of significant change. As always, if any of the topics resonate, do reach out to your usual contact or any of the contributors.
Nicola Rowlings Professional Support Lawyer, Family nicola.rowlings@mills-reeve.com
Rings, romance and regret
A celebrity engagement is enough to set social media alight, with a dazzling diamond ring causing instant widespread speculation. But behind the sparkle and the pop culture buzz lies a surprisingly common legal question: what happens to the ring if the engagement doesn’t lead to a wedding?
Whether your ring is a modest token of love or something worthy of a red carpet proposal, English law has a clear – if slightly nuanced –approach to ownership when engagements end.
The ring as a gift
Under Section 3(3) of the Law Reform (Miscellaneous Provisions) Act 1970, an engagement ring is presumed to be an absolute gift. Once given, it legally belongs to the recipient regardless of who ends the engagement.
If a celebrity were to call things off after a headline making proposal, the recipient would still be entitled to keep the ring under English law. The law doesn’t concern itself with who broke off the engagement or why. The ring would usually remain with the person who received it.
The exception!
There is, however, an important exception.
If the ring was given on the condition, stated or implied, that it must be returned if the marriage doesn’t happen, the giver may have a legal right to reclaim it.
The most obvious example is a family heirloom. Courts may infer that such a ring was given with the expectation it would be returned if the engagement ended. But proving this can be challenging unless there’s clear evidence, like a written agreement or a clause in a prenuptial agreement.
Even a verbal agreement made before the engagement ends can, in theory, be binding – although it is harder to prove. Many couples resolve these issues privately, but when emotions run high and the ring is valuable (financially or sentimentally), disputes can arise.
A well publicised example was the break up of Maya Jama and Ben Simmons, when Simmons reportedly sought the return of the $1 million ring he had given her. In the end, she returned the ring, but legally the question turned on the same issue that affects everyone: was there an understanding – spoken or unspoken – about what would happen if the marriage didn’t take place? Was anything agreed, and was it recorded?
What about prenups?
While prenuptial agreements aren’t automatically enforceable in England and Wales, they can influence court decisions if they meet the usual criteria on fairness, disclosure and independent legal advice.
A prenup can specify what happens to the ring in the event of a breakup, but it must be properly drafted and signed well before the wedding.
On a practical level, many rings are bought on credit, meaning that long after the relationship has ended, the purchaser may still be paying off the debt. This can understandably fuel disputes. If the ring is expensive or sentimental, it’s wise to agree at the outset what will happen to it and put that agreement in writing.
Do disputes over engagement rings ever get to court?
Yes – they can and do.
Recently, the Family Court was asked to decide whether a woman should return a diamond engagement ring and other jewellery worth nearly £68,000 after calling off her engagement just two weeks before the wedding.
There had been a whirlwind romance, which Mr RI said led to an engagement. When the relationship ended, Ms NG denied there had ever been an engagement, said no wedding was planned (at least not one she agreed to), and claimed the ring was an unconditional gift.
Mr RI provided social media posts showing Ms NG wearing the ring and referring to him as her “future husband”, an email where she called him her fiancé, and even confirmation of a booked wedding date from Chelsea Old Town Hall.
Ultimately, the court found Mr RI the more credible witness, determined that the couple had been engaged, and ordered the ring’s return.
So where does that leave the rest of us?
While celebrity engagements may be announced with dramatic sunsets, custom cut diamonds and viral fan reactions, the underlying legal principles apply just the same to everyone else.
If you’re giving or receiving an engagement ring, it’s worth thinking pragmatically:
• Is it a gift with no strings attached?
• Is there an understanding – spoken or unspoken –that it should be returned if things don’t work out?
In most cases, the ring stays with the recipient. But if you want to avoid future drama, a clear agreement can go a long way.
And if you’re unsure, speak to one of our family lawyers. Even if your engagement isn’t trending on social media, the legal implications are just as real and we’re here to help you navigate them with care and confidence.
Catriona Attride Partner, Private Client
catriona.attride@mills-reeve.com
Many people assume that lifetime gifting for inheritance tax (IHT) purposes is limited by the familiar “seven‑year rule”. However, there’s a valuable and often underused exemption that allows certain gifts to be immediately outside the estate, regardless of how long the donor survives.
This relief is commonly known as surplus income gifting, or more formally the “normal expenditure out of income” exemption. For clients who have reliable income and consistently spend less than they earn, it can be one of the most effective and flexible ways to pass wealth to the next generation.
What is surplus income gifting?
Surplus income gifting is based on section 21 of the Inheritance Tax Act 1984. In simple terms, gifts will be exempt from IHT if they:
1. Form part of the donor’s normal expenditure
2. Are made out of income (not capital)
3. Don’t reduce the donor’s usual standard of living
When these conditions are met, gifts are immediately exempt. They don’t use the nil rate band and don’t depend on surviving for seven years.
Importantly, there’s no upper limit on how much can be gifted under this exemption. The effective cap is the donor’s genuine surplus income.
Who is this most suitable for?
This exemption is particularly relevant for individuals who:
• Have predictable income (for example, pensions, dividends or rental income)
• Spend comfortably less than they earn each year
• Want to support family members during their lifetime
• Are concerned about rising IHT exposure
There are conditions that need to be met.
Condition 1:
Gifts must form part of “normal” expenditure
The first requirement is that the gifts must be part of a pattern of giving that is normal for the donor.
“Normal” doesn’t mean modest or average. It simply means normal for that individual, looking at factors such as:
• Frequency of gifts (monthly, annually, or regularly linked to a purpose)
• Consistency of amounts
• Who receives the gifts
• The reason for the gifts
The courts have confirmed that a pattern can be shown either by a history of regular payments or by evidence that the donor made a clear decision or commitment to give regularly and then followed through on it.
As a practical point, putting in place a letter of intention, explaining what will be gifted, to whom, and why the gifts are affordable, can be valuable evidence for HMRC if there’s a challenge.
Condition 2:
Gifts must be made out of income, not capital
Only gifts made from income can qualify. Gifts funded from savings or investments will not fall within this exemption.
There’s no statutory definition of income for this purpose, but HMRC look at the donor’s overall position “taking one year with another”. Income includes:
• Employment/pension income
• Dividends and interest
• Rental income
By contrast, withdrawals that represent a return of capital (for example, from investment bonds) won’t qualify.
Condition 3:
The donor must maintain their usual standard of living
The final condition is that, after making the gifts, the donor must still have enough income to maintain their normal lifestyle.
This doesn’t mean living frugally or restricting spending. Rather, the donor mustn’t be forced to cut everyday costs or rely on capital to fund ordinary living expenses because of gifting.
Using accumulated surplus income
Many clients discover surplus income gifting later in life. In some cases, surplus income from earlier years may have built up and remained unspent.
There may be scope for this accumulated surplus income to support an initial gifting strategy, particularly where it can be clearly identified and traced. Careful analysis is required to ensure accumulated income has retained its status and hasn’t been capitalised.
Good record-keeping becomes especially important if accumulated income is relied on. Where income has clearly retained its character (for example, remaining in a current account), arguments are easier to sustain.
Common uses of surplus income gifting
Surplus income gifting is flexible and can be tailored to a family’s needs. Common applications include:
• Regular gifts to family members
• Contributions towards education costs
• Funding pensions, ISAs or Junior ISAs (where appropriate)
Gifting surplus income into trust
Surplus income gifts don’t have to be made directly to individuals. In some cases, it can be appropriate to gift surplus income into a trust, most commonly a discretionary trust for children or grandchildren. This is particularly relevant when a gift of accumulated income is being made. Using a trust allows gifted funds to be set aside for future use, rather than passing immediately to a beneficiary.
By contrast with a gift of capital to a trust, which uses the donor’s nil rate band and is immediately subject to inheritance tax at 20% where it exceeds that band, a gift made out of surplus income is fully exempt. Because surplus income gifts don’t count as chargeable transfers, there’s no limit on the amount that can be gifted into trust and no immediate IHT charge, which is why gifting surplus income to multiple trusts (established on different days) can be a particularly effective planning tool.
The key to successful record-keeping
Although surplus income gifting is claimed only on death, the evidence must exist during lifetime. Executors are required to report gifts to HMRC if the donor dies within seven years of making those gifts. Without clear records, executors can struggle to demonstrate that the exemption applies.
As best practice, an annual income and expenditure summary should be maintained by the person making the gifts. Maintaining these records annually is far easier than reconstructing them later.
A note on loss of capacity
One practical risk is loss of mental capacity. Attorneys acting under a power of attorney cannot usually continue significant gifting without court authority, even if gifting was established previously.
It can often be appropriate to enter into a Deed of Covenant to allow gifting to continue in the event of incapacity. This requires careful advice and isn’t suitable for everyone.
Final thoughts
For clients with consistent surplus income, this exemption can be one of the most straightforward and effective lifetime planning tools available. It allows wealth to be transferred gradually, efficiently and without the uncertainty of survival periods.
The focus isn’t on complexity but on discipline: understanding the conditions, documenting intention, keeping clear records and reviewing arrangements regularly.
Used thoughtfully, surplus income gifting can substantially reduce IHT exposure while allowing families to benefit from wealth at a time when it’s likely to be most useful.
Rose-Marie Drury Head of Fertility Law, Family rose-marie.drury@mills-reeve.com
Katharine Watson Principal Associate, Private Client katharine.watson@mills-reeve.com
Surrogacy, parenthood and the limits of traditional trusts
Many families rely on long standing wealth planning structures, such as trusts. But as family formation has changed, the law hasn’t necessarily kept up to recognise these different pathways to parenthood.
At any stage of wealth planning, whether creating new structures or updating existing ones, it’s important for settlors, trustees, beneficiaries and their advisors alike to consider the definitions used for family relationships and how they may impact upon wealth planning structures.
In Cator v Thynn [2026] EWHC 209 (Ch), the Seventh Marquess of Bath had to grapple with the fact that pre-existing family trusts might not recognise his second son, Henry, who had been born through surrogacy in the US, as falling within the class of beneficiaries.
An intention to be a parent alone isn’t sufficient to confer legal status as a parent and it’s important that anyone conceiving using a donor or surrogate takes early legal advice to understand who will be a legal parent.
Although the trusts had been established within the Marquess’ lifetime (in 2004 and 1987 respectively), they expressly retained pre-1970 definitions of family relationships. The precise definitions used in the trust aren’t detailed in this case, but it was clear there was doubt as to whether or not Henry would fall into the class of beneficiaries despite being recognised as the Marquess’ legal son in the jurisdiction of England and Wales.
Many long-established trusts continue to rely on traditional common-law definitions of terms such as “child”, “issue” and “descendant”. It isn’t likely that these definitions were deliberately preserved to exclude children born through surrogacy or other modern family building methods. It’s more likely the case that surrogacy, IVF and international fertility arrangements weren’t part of the legal landscape, so there was no perceived need to define beneficiaries in broader or more flexible terms.
Why was this in court?
The substantive application before the court sought approval for the trustees’ proposed use of their power of advancement, which would allow the Marquess to add Henry to the class of beneficiaries under the family trusts. This hasn’t been ruled upon yet.
The initial hearing dealt solely with a procedural “blessing” application. The trustees asked the court to determine whether the existing beneficiaries (including Henry’s older brother and any future children or issue) ought to be formally represented in the proceedings.
Given the size of the beneficiary class, many individuals could be potentially disadvantaged by the proposed exercise of the advancement power. As it wasn’t possible to identify an adult beneficiary who could act without a conflict of interest, the court accepted the trustees’ proposal to appoint an independent solicitor to represent the wider beneficiary group, ensuring that all interests would be properly protected before any substantive decision is taken.
This case underlines the challenging position trustees may face when exercising discretionary powers. Even a seemingly straightforward decision to include a child as a beneficiary must be weighed carefully against the trustees’ overriding obligation to treat existing beneficiaries fairly and to consider the impact on their respective interests.
Cross-jurisdictional parentage issues
Legal parentage is a fundamental relationship that impacts on a wide range of issues. The law relating to parentage of children conceived through artificial reproductive technology (ART) varies from jurisdiction to jurisdiction and there’s currently no international convention which confers recognition of parentage of children born through ART between different jurisdictions. This can mean that a person may be a legal parent in one jurisdiction but not in another. An intention to be a parent alone isn’t sufficient to confer legal status as a parent and it’s important that anyone conceiving using a donor or surrogate takes early legal advice to understand who will be a legal parent.
Even a seemingly straightforward decision to include a child as a beneficiary must be weighed carefully against the trustees’ overriding obligation to treat existing beneficiaries fairly
In England and Wales, where a child is conceived through ART as part of a surrogacy arrangement than at birth, the legal mother is the surrogate. If she’s married, her spouse or civil partner is the other legal parent. The persons who intend to parent the child (who may be genetically related to the child, also known as intended parents) won’t have any status as parents at birth.
If the surrogate is unmarried, the second legal parent will depend upon where conception took place and whose sperm was used for conception. This may sharply contrast the law in the jurisdiction where the child was born. For example, in a number of US states, pre-birth orders are available to confer legal parentage on the intended parents, and they will be named on the child’s US birth certificate as the parents. Such orders and birth certificates aren’t recognised in England and Wales as conferring legal parentage, and it’s therefore necessary for intended parents to apply for a parental order or adoption to ensure they’re recognised as legal parents and the surrogate (and her spouse/civil partner’s) status is removed.
Early advice to understand the position between the different jurisdictions involved is key. Although a parental order is usually the preferred route to recognition of legal parentage following a surrogacy arrangement, there may be reasons why this isn’t possible (for example, if the intended parents don’t meet the criteria for an order to be made) or why other routes, such as adoption, may be preferred.
In some circumstances it may be necessary for there to be multiple orders in different jurisdictions to secure recognition of parentage.
Finally, although the Marquess and his wife are no strangers to the public eye and have previously spoken publicly about their decision to conceive Henry through surrogacy, the case further highlights the publicity such cases can attract, which not all families will welcome.
Practical considerations
As surrogacy arrangements become more common, the world of family law and private client law must come together to accommodate today’s diverse family structures.
As family structures continue to develop, trust and estate planning must adapt to keep pace.
At Mills & Reeve, we can help with:
• Reviewing, and if applicable, updating trust documentation to ensure it reflects current family arrangements.
• Advising trustees on exercising their discretionary powers and the potential risks associated.
• Managing cross-border trust and tax considerations, particularly where differing legal systems are involved.
• Providing tailored guidance to families as they navigate surrogacy, different routes to parenthood and succession planning, ensuring their arrangements remain resilient and aligned with their long-term intentions.
• Advising individuals and trustees on whether legal parentage will be conferred through different routes to parenthood, such as surrogacy or donor conception, including cross-border arrangements and the options available to ensure recognition of legal parentage.
What has surprised you most about the Mills & Reeve private client team?
I’ve been genuinely surprised by the kindness and generosity of spirit within the team. Joining a new firm can often feel daunting, but I couldn’t have hoped for a warmer or more welcoming environment. Every individual brings their own strengths, and together these combine to create an exceptionally strong and supportive team with a real sense of heart.
What do you enjoy most about your role?
I take great satisfaction in educating people and helping them achieve their goals. There’s something incredibly rewarding about meeting clients who feel nervous or uncertain and seeing them leave with clarity, confidence and a clear plan for the future. Being someone they trust and regard as part of their inner circle is a privilege I value deeply.
Why did you choose Mills & Reeve?
Since moving to Birmingham more than nine years ago, I’ve always held the Mills & Reeve private client team in the highest regard. The breadth and depth of expertise across the team is exceptional.
The opportunity to work alongside colleagues who are recognised nationally for their leading work in areas such as agriculture, family investment companies, trusts, owner managed businesses and estate administration is a genuine privilege.
What is the best advice you’ve received and follow?
My parents always encouraged me to be kind, and this advice has stayed with me throughout my career. I strive to treat my clients in the same way I would want my own parents to be treated. We often meet clients at vulnerable moments in their lives, so it’s vital they feel safe, supported and free from judgement. I make a point of reassuring clients that there’s no such thing as a stupid question and encourage open, honest conversations so they feel comfortable sharing even the most sensitive details.
What is the best professional compliment you have been given?
After advising a couple on their succession planning and wills last year, the wife told me that coming to see me felt like coming home. That comment has stayed with me. My aim is always to ease clients’ worries and help them feel confident, informed and reassured in the decisions they make.
If you hadn’t been a lawyer, what do you think you’d be doing now?
I would most likely have become an accountant. I’ve always enjoyed working with figures, which is why I particularly enjoy drafting estate accounts. They provide a clear and accurate reflection of what has taken place during estate administration. I also believe there is real value in showing clients the numbers behind their succession planning, particularly when discussing tax. Seeing the figures themselves often makes the implications far more tangible than simply hearing that inheritance tax is charged at 40%.
Emma Fosh Associate, Private Client emma.fosh@mills-reeve.com
Can AI really write
Technological innovation continues to advance at remarkable speed, and AI is increasingly being used to generate wills quickly and at little or no apparent cost. While this may seem appealing, any savings achieved at the outset can be illusory. In practice, AI generated wills can expose individuals and their families to significant risks, including disputes, costly rectification, and litigation after death.
While AI tools can produce documents that resemble standard will templates, they cannot engage in meaningful estate planning or provide tailored advice on tax exposure. Effective will drafting begins long before the document itself is prepared. The real value of a skilled advisor lies in understanding a client’s circumstances and asking the right questions at the right time.
What do we mean by estate planning?
Estate planning is a holistic process. Professional legal advisers will:
• Gather detailed information about a client’s personal and financial circumstances, including trusts, business interests, and lifetime gifting.
• Advise on the most appropriate legal and tax efficient structure to meet the client’s objectives.
• Prepare bespoke documentation that reflects those objectives clearly and robustly.
This depth of analysis cannot be replicated by automated systems.
A tool, not a replacement
AI may be capable of generating basic will structures and referencing certain legal requirements, such as the need for two independent witnesses. However, it’s a generative tool and only as reliable as the information supplied to it. Without specialist legal knowledge, it’s unlikely that a non-professional will identify the key issues that should inform the drafting process, potentially resulting in documents that are inappropriate or ineffective.
If clients do use AI, it should be as an educational starting point only, for example to help frame initial thinking ahead of a meeting with professional advisers.
Final thoughts
Bespoke advice from experienced professionals remains essential when preparing a will or undertaking wider estate planning. This isn’t to suggest that AI has no role to play; rather, it should be viewed as one of many tools. Just as the invention of the laptop didn’t render the pen obsolete, the development of AI doesn’t diminish the value of professional expertise.
If you’re reviewing your will or considering wider estate planning, particularly in light of recent inheritance tax changes, our private client team would be pleased to assist.
Where AI falls short
A personal approach
Estate planning is inherently personal. Legal advisers often work with families across generations and understand wider family estates and long-term objectives. AI cannot properly assess lifetime gifting arrangements, existing trusts, or the broader family picture in the way an experienced practitioner can.
Tax planning and legislative change
AI platforms typically provide general educational information, not advice tailored to an individual’s circumstances. Tax law changes frequently and recent developments, particularly in relation to agricultural and business property reliefs, have had a significant impact on estate planning strategies. A professional adviser can assess the law as it stands, anticipate known changes, and consider practical issues such as liquidity to meet any inheritance tax liability.
For high-value estates, missed planning opportunities can result in substantial and unnecessary tax charges. In certain cases, such as farming families, poor planning can jeopardise business continuity and succession.
Family dynamics and vulnerability
AI cannot assess issues such as mental capacity, vulnerability, or the complex dynamics that often exist within families. The needs of dependants, the potential for conflict, and the risk of future challenges all require careful and sensitive consideration. Failure to address these matters can result in a poorly structured will that’s open to dispute, causing distress and significant cost for those left behind.
Validity and execution
Perhaps most concerning is the risk that errors in AI-generated wills go unnoticed. Wills are subject to strict formalities, including precise execution and witnessing requirements. A seemingly minor mistake can render a will invalid, leaving the estate to pass under the intestacy rules and only coming to light after death, when it’s too late to remedy.
Why more families are exploring Swiss education
Grant Ferguson Director, Verbier International School g.ferguson@vischool.ch
International education has always been a considered decision for globally minded families. While the UK continues to offer some of the world’s most respected schools, many families are increasingly exploring options beyond its borders. This isn’t a reaction to any single change, but rather part of a long‑established pattern of seeking the right environment for each child.
Switzerland has long been part of that conversation
For decades, families have chosen Swiss schools for their blend of academic quality, safety and discretion, combined with an exceptional standard of living. What we’re seeing now is a steady increase in enquiries from UK-based families who are taking a closer look at what Switzerland can offer. This is a well-worn path, but one that is gaining renewed attention as families broaden their perspective on education.
At Verbier International School, we’ve seen this interest grow in a measured and thoughtful way. Families aren’t looking to move away from the UK system entirely, but rather to explore an alternative that offers both academic ambition and a different lifestyle experience. In many cases, it’s about finding the right balance.
Verbier itself is central to that appeal
Set high in the Swiss Alps, Verbier offers a pace of life that is both energising and grounded. Students benefit from daily access to the outdoors, whether through skiing, hiking or simply being in a natural environment that encourages independence and resilience. There’s a strong sense of community and a lifestyle that supports both wellbeing and personal development alongside academic study.
For families, Switzerland also offers a reassuring sense of stability. Its reputation for safety, discretion and a favourable, predictable financial environment makes it particularly attractive for internationally mobile families seeking continuity.
However, lifestyle alone isn’t enough. The strength of the educational offer remains paramount.
At Verbier, our approach combines academic vigour with a modern, forward-looking curriculum. Through the International Baccalaureate and the High Performance Learning framework, students are encouraged to think critically, work independently and develop the confidence required for leading universities worldwide. Small class sizes and a highly personalised approach ensure that each student is known, supported and challenged appropriately.
What makes Verbier distinctive is the way in which these elements come together. Academic study, sport, creativity and outdoor education aren’t separate experiences, but part of a cohesive whole. This creates an environment where students can thrive both intellectually and personally.
For many UK families, the decision isn’t about replacing one system with another, but about expanding the range of possibilities available to their children.
Switzerland and international schools offer a compelling and well-established alternative. In Verbier, that’s combined with an exceptional quality of life and a genuinely international outlook. It is, for many, an option worth exploring.
Victoria
Davies Partner, Real Estate victoria.davies@mills-reeve.com
Louise
Kerr Associate, Real Estate louise.kerr@mills-reeve.com
The Renters’ Rights Act and the future of residential asset strategy
On 1 May 2026, the way in which people rent and let homes in England changed significantly. The Renters’ Rights Act 2025 introduced a new regime for the private rented sector, intended to provide greater security for tenants while also establishing clearer rules for landlords.
This article examines the key reforms introduced by the Act, considers their implications for “accidental landlords”, and highlights practical takeaways when assessing the role of residential property within a wider asset strategy.
A shift towards greater stability
For many years, private renting in England had a bad reputation of short term contracts, rising rents, and, for most tenants, the risk of eviction with little notice. The new Act aims to fundamentally reshape the balance between landlords and tenants by creating a system that supports longer term renting and removes uncertainty for tenants, while still, it’s claimed, offering a fair regime for landlords to manage their properties.
Key changes under the Renters’ Rights Act
Removal of fixed term tenancies
In the private rental sector, fixed term tenancies are no longer permitted. They are now replaced with periodic tenancies, meaning that tenants will be able to stay in their homes on an indefinite rolling basis unless the landlord is able to terminate via a valid ground, or the tenant gives the landlord two months’ notice (which they can now do at any time rather than tying in with fixed break dates). Existing private sector tenancies converted to this new framework on 1 May, even if they were granted before that date for a fixed term.
Abolishment of Section 21 (“no fault”) evictions
One of the most significant changes post the May 2026 implementation is the abolition of Section 21 evictions, meaning landlords are no longer able to end a tenancy without providing a lawful reason (or ”ground”).
Introduction of strict possession grounds and longer time frames
The Act provides landlords with a number of “robust grounds” to take back possession of a property, but they’re linked to specific events, not just the landlord’s preference for a change. The grounds include persistent or serious rent arrears, breach of tenant’s obligations or damage to the property, the landlord (or a close family member) needing to move into the property, and the landlord intending to sell the property or redevelop it. This isn’t a complete list, and there are further grounds a landlord could rely on, but there are serious repercussions if any ground is falsely claimed. Even if a valid ground can be demonstrated, some of the time limits for recovery of the property are now significantly longer. For example, if a landlord desires to sell their property, a minimum of four months’ notice must be given to the tenant and that notice cannot expire in the first 12 months of the tenancy.
Limitations of rent increases and an end to bidding wars
To ensure that rent increases are fair (and aren’t being used as a means of backdoor eviction), the Act now only allows for rents to be increased once per year and only to the market rate. If tenants believe that a proposed rent is in fact not market comparable, they can bring a legal challenge to the increase. Also, to avoid prospective tenants entering into “bidding wars” with each other, landlords and agents will be prohibited from asking, encouraging or accepting any bids from a prospective tenant which exceed the advertised asking price.
Renting with pets and prohibiting rental discrimination
Under the new regime, landlords cannot unreasonably withhold consent if a tenant requests the right to have a pet, and landlords and agents are prevented from discriminating against prospective tenants simply because they’re in receipt of benefits or because they have children.
Application of the Decent Homes Standard to the private rented sector and landlord registration requirements
Later down the line, the Act will introduce a Decent Homes Standard to ensure that tenants are provided with safe and decent housing, and registration will be required on a new landlord and property database.
I didn’t mean to become a landlord; will this apply to me?
It isn’t unusual in the private wealth sector for someone to become an “accidental landlord”, for example when:
• A homeowner keeps their original property when upsizing
• A property is inherited
• A home is rented out temporarily while working elsewhere
The simple answer is yes. Whether you only let one spare property, or it would suit you to let your home out on a short term or informal basis, the new rules apply to you in the same way as to larger scale or professional landlords.
The new regime will be a big adjustment in such circumstances, because it removes a lot of the flexibility and simplicity that previously allowed the management of a tenancy without deep knowledge of housing law or the tenancy arrangement potentially being a long-term commitment. The abolition of Section 21 “no fault” evictions is particularly important for accidental landlords, as you can now only recover possession by proving one of the statutory grounds and complying with the corresponding time limits.
Key takeaways
1. The house rules have changed: The private rental sector is now governed by a more prescriptive and closely defined framework. Even for incidental or inherited holdings, regulatory awareness is no longer a background consideration, it’s integral to preserving value and avoiding unintended constraints.
2. Flexibility comes with foundations: Owning a rental property is still viable, but it’ll require more forethought and fewer quick exits. Decisions around selling, regaining possession or changing strategy now need to be laid down early and supported by proper process.
3. Professionalise the let or rethink the asset: The era of low touch, informal letting has ended. For many high-net-worth owners, the choice will be between putting the right professional structure around a rental property or questioning whether letting remains the right use of capital in the context of their broader objectives.
Richard Dawson-Gerrard Partner, Commercial Disputes richard.dawson-gerrard@mills-reeve.com
Managing social media and privacy during divorce
In an age where daily life is increasingly documented online, social media can become a minefield during divorce or relationship breakdown. What once served as a space to share milestones, holidays, and family memories can quickly transform into a source of conflict and emotional harm. Managing social media thoughtfully during this period is essential, not only for your own privacy and wellbeing, but also to protect children and extended family members from unnecessary distress.
Think before you post
The easy access to social media and mobile phone cameras means they have become a big part of people’s lives, and when things are positive, they can be enjoyable. However, it can also be used as a dangerous weapon during divorce. Thought and care should be exercised around posts on social media, what is shared and the taking and distribution of images. Good habits can help prevent serious issues later.
During a relationship breakdown, emotions often run high and previous thought and care may evaporate. It can be tempting to vent frustrations
or share cryptic messages hinting at conflict. However, anything you post can easily be taken out of context, screenshotted or forwarded. Even deleted posts can live on in someone else’s photo album or message history.
Ask yourself these three questions before posting anything:
• Could this be interpreted negatively by my former partner?
• Could this cause distress to my children or family if they were to see it later?
• Would I be comfortable explaining this in a legal or mediation setting?
If the answer to any is “no”, don’t post.
Avoid discussing legal matters online
When relationships break down, people often have to deal with legal matters, finances, or arrangements for children. Posting about ongoing proceedings, even indirectly, can be damaging. Courts take the misuse of social media seriously, and posts can influence outcomes around child arrangements, financial orders or allegations of behaviour.
Never post about:
• Court hearings or decisions
• Your ex-partner’s behaviour or mental health
• Disputes about children or finances
• Legal advice you have received
Keeping these discussions offline protects your legal position and avoids escalating conflict.
Review your privacy settings –but don’t rely on them completely
Adjusting privacy settings on platforms like Facebook, Instagram, TikTok, and LinkedIn is a sensible first step. Limiting who can see your posts, who can tag you, and who can send friend requests reduces the risk of unwanted viewers accessing your content.
However, privacy settings offer only partial protection. Mutual friends, overlapping social circles, or even unintended algorithmic visibility can expose posts to people you didn’t anticipate.
Additionally, children may accidentally share content or conversations through their own accounts. Consider:
• Limiting tagging permissions
• Turning off location sharing
• Reviewing old posts and removing anything sensitive
• Using “close friends” lists cautiously, or not at all
Protect children from online exposure
Children are particularly vulnerable to the emotional fallout of divorce. Social media can amplify harm if content about the breakdown becomes visible to them or to their peers. This includes:
• Posts expressing anger or blame
• Photos or videos intended to portray a particular narrative
• Comments from friends or relatives supporting sides
Be mindful of new relationships
Introducing a new partner too early (online or offline) can intensify tensions. Posting photos or updates about a new relationship can:
• Cause emotional distress to a former partner
• Create confusion or insecurity for children
• Influence trust and communication in co-parenting
Take time to consider whether sharing personal updates will help or harm the wider family dynamic.
The darker sides to information and reputational harm
We’ve seen darker trends emerging in the press and on social media, particularly during relationship breakdowns, including the sharing of confidential information and intimate images. Not only can this be stressful and immediately harmful, but it also causes irreparable harm to families and on a personal level.
Even if children don’t have their own accounts, they may still access content through friends, family devices or future searches.
The safest approach is to avoid posting anything about the separation. If you continue sharing family-related content, ensure it is neutral, non-emotional and child centred.
What to do
Make a plan. We deal with these issues regularly and would recommend:
• If you’re high profile, consider addressing social media/image rights and privacy by agreement with a partner.
• Think carefully when sharing data, personal information and pictures of an intimate nature.
• Take the advice set out above and consider using non-court and potentially confidential dispute resolution processes, such as mediation.
• If you see private data, pictures etc on social media, act quickly via the website itself or get urgent advice. It’s worth noting there are both civil and criminal remedies in this context to assist in protecting the information, your privacy, preventing harassment and dealing with illegal content.
• Be proactive in shaping your narrative and, where possible, agree this with your family, especially if you believe there will be media interest. Enlist the help of specialists.
• If the press contacts you, don’t ignore that contact. Enlist the help of specialists. We engage with journalists on a regular basis and don’t assume all interest is bad.
• Ultimately court is an option, but defamation actions are expensive and public.
Consider a temporary social media break
For many, stepping back from social media during a divorce is the safest and healthiest option. A break provides space to:
• Process emotions privately
• Avoid accidental conflict
• Reduce exposure to triggering content
Even a short hiatus can significantly reduce stress.
The takeaway
Think carefully before posting, tighten your privacy settings, keep legal matters off social media, and seek specialist advice early, especially if children or your reputation is at risk.
On 6 April 2025, the UK’s tax code for internationally connected individuals was dramatically overhauled. As a temporary concession to help affected individuals arrange their tax affairs, and (in keeping with its wider policy to discourage the use of offshore trusts for tax planning) to encourage settlors to wind up their non UK trusts, the UK government has introduced a new Temporary Repatriation Facility (TRF).
Two of the key changes have been:
1. To abolish the remittance basis of taxation for nondomiciled and non-deemed domiciled individuals.
2. To remove certain protections benefitting offshore trusts, which effectively mean that, for most UK resident settlors of non-UK trusts, those trusts are now “transparent” with income and gains of the trust being immediately taxed on the settlor.
What is the TRF?
The TRF allows eligible individuals to designate certain historic offshore income and capital gains as “qualifying overseas capital” and pay a flat UK tax charge on those designated amounts at concessionary tax rates.
Qualifying overseas capital is, very broadly, a term used to describe two types of pre-6 April 2025 income and capital gains:
• Non-UK source income and capital gains that arose to an individual personally, but during a year in which they claimed the remittance basis of taxation and so were shielded from UK tax at the time, and which have not subsequently been brought (ie remitted) to the UK and therefore remain untaxed.
• Income and capital gains that arose in a non-UK trust structure, and which would otherwise be “matched” to a capital distribution made in the TRF window at a UK beneficiary’s marginal income tax and capital gains tax rates (up to 45%) under the UK’s complex anti-avoidance regime for trusts.
The TRF rates are:
• 12% where the designation is made in 2025/26 or 2026/27
• 15% where the designation is made in 2027/28
In other words, the one-time TRF window runs for three tax years (2025/26, 2026/27 and 2027/28).
Crucially, you don’t have to remit the funds during the three year window to benefit. Once designated, the amounts can be remitted to the UK later without a further UK tax charge on that remittance. It may be beneficial, in some cases, for inheritance tax reasons to keep assets outside the UK post-designation, for example.
Who can use it?
In broad terms, the TRF is for UK resident individuals who were subject to the remittance basis in at least one tax year before 2025/26, and who either have qualifying amounts to designate personally or who will receive a capital distribution from a non-UK trust before 5 April 2028.
You can only make a designation election in a selfassessment return for 2025/26, 2026/27 or 2027/28, and you must be UK resident in the year of designation.
Practical points clients should be doing now:
1. Quantify and evidence your “historic offshore pot”: Identify what part of your offshore wealth is pre 6 April 2025 income/gains that could be taxable if remitted.
2. Consider trust benefits you might receive: If you’re a trust beneficiary (including a settlor who is also a beneficiary), coordinate with trustees about the timing and nature of any capital payments or benefits during 2025/26–2027/28, as this can affect whether TRF is available and at what rate.
3. Factor in foreign tax: TRF is a stand alone tax charge and no foreign tax credit relief is available against the payment (the rules require designation of the amount net of relevant foreign tax where applicable).
Conclusion
TRF is a time limited opportunity to turn pay tax at a flat rate of 12% or 15% on funds that would otherwise be taxed at up to 45% if they were remitted to the UK and/or received from a trust.
If you have ever claimed the remittance basis of taxation in the past, the TRF might be relevant to you. We would be delighted to advise you in more detail to see if the TRF could help bring down your UK tax bill.
Protector, interrupted
The role of a protector requires careful consideration at the outset of the drafting process, to define the role they are intended to play and to manage settlor expectations as to what can be achieved.
A protector may have a fiduciary role, or they may have personal powers depending on the way in which the trust instrument is drafted and the governing law of both the trust and forum of administration. Historically, a protector’s role was often a personal one without fiduciary powers with a view to enabling the settlor to retain control over the trust (ie, by effectively enabling the protector to act as their “eyes and ears”).
With increased clarity around the fiduciary nature of protector’s powers, the recent decision In the matter of the Billevese Trust [2025] GRC060 is relevant in reexamining the test for the removal of protectors and fiduciaries. It also shines a light on the issues that can arise where more complex governance structures are adopted.
Background
In Billevese, there was a Board of Protectors for the trust, divided into Class A Protectors and Class B Protectors. The powers of all protectors (including both Class A and Class B) were expressly stated be “fiduciary in nature”. All members of the Board had equal voting rights.
The distinction between the Class A and Class B wasn’t one of their powers, but rather their method of appointment and removal. Importantly, the life tenant and sole beneficiary of the trust, Cynthia Bernheim, retained the power to remove Class B Protectors, but not Class A.
As such, when Cynthia believed that the Class A Protectors had acted in breach of their fiduciary powers, she was required to advance a court application to seek their removal. This was only possible because of their fiduciary standing.
Sarah Cormack Partner, Private Client sarah.cormack@mills-reeve.com
The complexity of protectorship structures
The nature of the distinction between the Class A Protectors and the Class B Protectors is indicative of the growing trend of strong governance and complex protectorship structures within offshore trusts.
It’s common to have multiple classes of protector constituting a protector committee with subtly different powers and/or methods of appointment and removal. This is often a way to balance either:
• Family influence with professionalisation
• The involvement and influence of different generations
In this case, the Class A Protectors were originally chosen due to extensive experience in investment and asset management, with the Class B Protectors seemingly having a broader remit.
Where the powers of the protectors remain the same (notwithstanding the distinction between Class A and Class B Protectors), and they’re all fiduciary in nature, it’s vital that all protectors ensure they act in accordance with their duties.
In this instance, it was alleged the Class A Protectors had acted in breach of their fiduciary duties by:
• Abusing their position by protecting investment management companies in which they had a personal interest, despite having been appointed for their financial expertise and subsequently instructing the trustee to engage companies with which they were affiliated.
• Misunderstanding their role as protectors by insisting upon the attendance of intermediaries and legal advisors for the purpose of meetings with the Class B Protectors and the trustee.
• Their relationship with the Class B Protectors had broken down, meaning the Board of Protectors was unable to take decisions unanimously as required.
The test for removal of a protector
The guiding principles for the Court in deciding whether to remove a fiduciary (whether a protector or a trustee) are:
• The welfare of the beneficiaries
• The competent administration of the trust
As established above, it was clear from the trust instrument that the Class A Protectors were fiduciaries.
It isn’t necessary for there to be evidence of positive misconduct for a fiduciary to be removed. It’s instead for a potential applicant to make a good arguable case that the continuance of the relevant fiduciaries in their role will prevent the trust from being properly executed.
The court’s decision
The court ordered that the Class A Protectors be replaced by reason of the following conduct:
• They had personal interests in the investment management companies and failed to recognise and manage the conflict. This was demonstrated by their refusal to attend meetings with the trustee due to the potential removal of all assets from the investment management companies.
• They insisted upon an intermediary liaising with the trustee which had resulted in further delays. That intermediary had a conflict of interest given his role in the investment management companies, and so excessive costs were incurred.
• They were protectors of other family trusts, the beneficiaries of which had a fractured relationship with Cynthia which put them in a position of a potentially conflicting interest.
• They failed to recognise the hurt and distress their actions had caused Cynthia, suggesting their duty of trust and confidence had been breached.
What does this mean in practice?
While this judgment reaffirms the test for the removal of fiduciaries, it also highlights the importance of properly identifying the powers and role of a protector (or protectors) at the outset of a trust. It’s important to consider whether it’s appropriate to have multiple classes of protector and, if so, to define clearly the mechanisms for their appointment and removal, as well as expectations around their respective roles and how any deadlock or dispute can be resolved.
Regardless of intentions, it’s clear the court will be prepared to take steps to remove a protector where they haven’t acted in the welfare of the beneficiaries and in the competent administration of the trust.
Welcome to ...
We’re pleased to welcome Katharine Danks, Brett Frankle and Rachel Donald to Mills & Reeve’s private wealth team. Katharine, Brett and Rachel join the firm with a shared commitment to helping clients navigate some of life’s most challenging moments, with a focus on practical outcomes. Their appointments strengthen our ability to provide thoughtful and collaborative support to families in the UK and internationally.
Brett Frankle
Brett is a family lawyer with extensive experience in wealth protection, international family law and complex financial arrangements. He supports clients through issues around divorce, finances and children with a clear focus on what they need next. Brett values taking a considered, calm approach –pausing to think carefully about next steps rather than reacting instinctively – and is proud to be trusted by clients and fellow professionals alike.
“At Mills & Reeve, I have been struck by the breadth and depth of expertise across the family team, and the collaborative way colleagues work together to help clients achieve outcomes that allow them to move on.”
Katharine Danks
Katharine advises on a wide range of agricultural property matters, as well as emerging opportunities in natural capital. She’s known for giving clear, commercially focused advice, taking time to understand each client’s business and family context to tailor the approach accordingly. Working closely with colleagues across the firm, she helps farming businesses and landed estates navigate change, from restructuring and succession planning to diversifying income through development, renewable energy and environmental projects.
“I joined the team at Mills & Reeve as they have exceptional specialist knowledge in complex and diverse needs of farming businesses and landed estates. The firm’s strong focus on client service, combined with its collaborative approach across specialisms, enables us to deliver the best outcomes for our clients.”
We sat down with our London family team to learn more about the people behind the expertise. Watch the videos on our YouTube channel
Rachel Donald
Rachel enjoys the challenge of problem solving and finding creative, practical solutions that help clients regain a sense of freedom and control. Her expertise is in litigation, non-court dispute resolution and prenuptial/postnuptial agreements for high-net-worth clients.
“I was drawn to Mills & Reeve because of its strong culture and the support offered to lawyers across the firm, from learning and development to knowledge and technology. Kindness, alongside doing your best, can make a real difference, and I take satisfaction in work that supports children and families through difficult transitions.”
2025/ 2026
International
Our
We've
Office locations
At Mills & Reeve, our 1,450 plus people and over 850 lawyers share one vision – achieve more together. It’s a state of mind in every client relationship we start and every choice we make. And it’s what clients consistently say distinguishes us from your average law firm.
You can expect a close and attentive working relationship with a team that’s responsive when you need them. You’ll receive advice tailored to your individual needs. Wherever in the world you or your business needs support, we’ll draw on our network to give recommendations.
We’re driven by our values – we’re ambitious, we’re open, we care and we collaborate. We embrace new ideas, communicate honestly and are easy to work with. We’re committed to you, our planet, our communities and each other.
For further information please visit the website at www.mills-reeve.com
Co editors
Sarah Wood Principal Associate, Private Client sarah.wood@mills-reeve.com
