SQE1 FLK2 Practice Paper 3

A solicitor holds client money in a general client account. Interest accrues on the account. The SRA Accounts Rules 2019 require the solicitor to account to the client for a fair sum in lieu of interest. Which of the following factors is LEAST relevant when determining a fair sum? A) The amount of money held B) The length of time for which the money was held C) The rate of interest payable on the solicitor's business account D) Whether the money was held in a separate designated client account

A testator executes a will leaving a legacy of £50,000 to a beneficiary. At the date of the will, the testator's estate was worth £500,000. By the time of death, the estate has diminished to £40,000 due to care home fees. The will contains no abatement clause. How is the legacy affected? A) The beneficiary receives £50,000 because legacies must be paid in full before any residue B) The legacy abates proportionally with other pecuniary legacies of the same class C) The legacy fails entirely because the estate cannot meet it D) The executor must sell all estate assets to pay the legacy in full

A landlord grants a 15-year lease of commercial premises. The lease contains a tenant's break clause exercisable at the end of year 10. The tenant wishes to exercise the break clause but has outstanding rent arrears of £2,000. The break clause is conditional on the tenant having paid all rent due. What is the position? A) The break clause is validly exercised because rent arrears are a minor breach B) The break clause cannot be exercised because the condition precedent of paying all rent has not been satisfied C) The court will relieve the tenant from the condition because the arrears are modest D) The tenant can exercise the break clause and pay the arrears afterwards

A defendant is charged with conspiracy to commit fraud. The prosecution seeks to adduce evidence of a confession made by the defendant to a co-accused while they were both in police custody. The defendant claims the confession was made under oppression. Under s76 PACE 1984, what must the prosecution prove? A) That the confession was made voluntarily, on the balance of probabilities B) That the confession was not obtained by oppression and was not made in circumstances likely to render it unreliable, beyond reasonable doubt C) That the confession was true, beyond reasonable doubt D) That the defendant was properly cautioned before making the confession

A settlor creates a discretionary trust for "such of my children and grandchildren as the trustees shall in their absolute discretion determine." The trust contains no express provision requiring the trustees to exercise their discretion within any time frame. One beneficiary complains that the trustees have not made any distributions for five years. What is the legal position? A) The trustees are in breach of trust because they must distribute income annually B) The trustees have a duty to consider exercising their discretion periodically, but are not obliged to make distributions C) The beneficiaries can compel distributions under the rule in Saunders v Vautier D) The trust fails for uncertainty because the trustees have unfettered discretion

A buyer is purchasing an unregistered freehold property. The buyer's solicitor conducts a land charges search against the seller and all previous estate owners. The search reveals a Class C(iv) land charge registered against a previous owner. What type of interest does this protect? A) A puisne mortgage (legal mortgage not protected by deposit of title deeds) B) A general equitable charge not falling within any other class C) An estate contract (including a contract for sale or an option to purchase) D) A restrictive covenant created after 1925

A will contains the following clause: "I give £30,000 to my solicitor, John Smith, who has acted for me for many years." John Smith was one of the two attesting witnesses to the will. What is the effect on the gift? A) The entire will is invalid because an interested witness cannot attest a will B) The gift to John Smith is void under s15 of the Wills Act 1837, but the rest of the will remains valid C) The gift is valid because the solicitor provided valuable services in return D) The gift is voidable at the option of the other beneficiaries

A solicitor receives a telegraphic transfer of £80,000 into the firm's client account. The payment is from a new client for a property purchase. Under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, what must the solicitor do BEFORE establishing a business relationship? A) Report the transaction to the National Crime Agency as a suspicious activity B) Complete customer due diligence (CDD) by verifying the client's identity C) Place the money in a separate designated client account D) Return the funds immediately if CDD has not been completed

An easement of way has been enjoyed over a neighbour's registered land for 25 years without permission, force, or secrecy. The dominant owner wishes to claim a prescriptive easement. Under the Land Registration Act 2002, what is the position? A) The dominant owner acquires a legal easement automatically after 20 years of continuous use B) Prescriptive easements cannot be acquired over registered land since the LRA 2002 came into force C) The dominant owner may apply to register a prescriptive easement, and the registered proprietor of the servient land will be notified and given the opportunity to object D) The prescriptive easement takes effect as an overriding interest immediately upon 20 years of use

A defendant is charged with robbery. The prosecution seeks to adduce evidence of the defendant's previous convictions for robbery under s101 of the Criminal Justice Act 2003 through "gateway (d)" — it is relevant to an important matter in issue between the defendant and the prosecution. Under what circumstances is this evidence admissible through gateway (d)? A) Only if the defendant has given evidence of their own good character B) If the evidence has substantial probative value in relation to an important matter in issue between the defendant and prosecution, and the court considers it is in the interests of justice to admit it C) Automatically, whenever the defendant has previous convictions for similar offences D) Only if the defendant consents to the evidence being admitted

A solicitor acts for a seller in a property transaction. The solicitor holds the deposit of £30,000 as stakeholder. Exchange takes place but the buyer fails to complete. The seller rescinds the contract. What is the solicitor's obligation regarding the deposit? A) The solicitor must return the deposit to the buyer immediately B) The solicitor must release the deposit to the seller upon rescission as the seller is entitled to forfeit it C) The solicitor must retain the deposit until both parties agree or the court orders its release D) The solicitor must pay the deposit into court pending resolution of the dispute

A trustee wishes to appoint an additional trustee to a private express trust. The trust deed is silent on the power of appointment. Under the Trustee Act 1925, who has the power to appoint new trustees? A) The beneficiaries, by majority vote B) The existing trustees, or if none, the personal representatives of the last surviving trustee C) The person(s) nominated in the trust deed, or if none, the surviving or continuing trustees, or the personal representatives of the last surviving or continuing trustee D) Only the court can appoint new trustees if the trust deed is silent

A personal representative discovers that the deceased made a gift of £100,000 to a friend two years before death. The estate is valued at £500,000 for inheritance tax purposes. How is this lifetime gift treated for IHT? A) The gift is exempt because it was made more than one year before death B) The gift is a potentially exempt transfer (PET) that becomes chargeable because death occurred within seven years C) The gift is immediately chargeable at the lifetime rate of 20% D) The gift is ignored for IHT purposes because it was made to an individual

A defendant is charged with handling stolen goods contrary to s22 of the Theft Act 1968. Which of the following elements must the prosecution prove? A) That the defendant stole the goods and then disposed of them B) That the defendant dishonestly received stolen goods knowing or believing them to be stolen C) That the defendant was in possession of goods that turned out to be stolen, regardless of their knowledge D) That the defendant purchased goods at below market value

A solicitor receives a completion statement from the seller's solicitor showing the following: purchase price £350,000; less deposit paid on exchange £35,000; plus apportioned ground rent (quarterly in advance) £62.50. What is the completion figure payable by the buyer? A) £315,000.00 B) £315,062.50 C) £314,937.50 D) £350,062.50