The Intestate Succession (Interest and Capitalisation) (Amendment) Order 2008

EXPLANATORY NOTE

(This note is not part of the Order)

The Administration of Estates Act 1925 provides, at section 46, that where a person dies intestate and is survived by issue or certain other close relatives, the deceased’s estate is charged with the payment of a fixed sum (the statutory legacy) in favour of the deceased’s surviving spouse or civil partner. Following settlement of the statutory legacy, the surviving spouse or civil partner is entitled to take a life interest in one-half of the balance of the residuary estate.

The Administration of Estates Act 1925 further provides, at section 47A, that the surviving spouse or civil partner may elect to redeem the capital value of his or her life interest in the residuary estate. The Intestate Succession (Interest and Capitalisation) Order 1977 (“the 1977 Order”) sets out, at article 3, the rules for calculating the capital value of a life interest for the purposes of a redemption under section 47A, by reference to capitalisation tables in the Schedule to the 1977 Order.

Article 2(1) of this Order amends article 3(2) of the 1977 Order to reflect changes since 1977 in the way that the yields on United Kingdom Government stocks are calculated. “Medium coupon” yields are no longer produced; however the yield figures for fifteen year United Kingdom Government Stocks are published as “FTSE UK Gilt Indices” on the web site of the Financial Times (http://markets.ft.com/ft/markets/researchArchive.asp?report=FTSEG&cat=BR).

Article 2(2) of this Order replaces the tables in the Schedule to the 1977 Order with tables which have been revised to take account of increases in life expectancy and decreases in the yields on Government Stocks.