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IHT nil rate band may now be frozen until 2019

12th Feb 2013
It is now being reported that the government will freeze the IHT threshold. ...
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IHT nil rate band may now be frozen until 2019

12th Feb 2013

Despite Chancellor George Osborne’s Autumn Statement pledge to raise the inheritance tax (IHT) threshold by 1% – to £329,000 for individuals and £658,000 for couples – in 2015/2016. It is now being reported that the government will freeze the IHT threshold – at £325,000 for individuals and £650,000 for couples – until 2019.

The extended freeze is expected to part-fund the government’s plans for a cap on elderly care fees.

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Inheritance Tax – Holiday lets are entitled to business property relief, ruling reversed

5th Feb 2013
HMRC has successfully appealed the decision. ...
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Inheritance Tax – Holiday lets are entitled to business property relief, ruling reversed

5th Feb 2013

Further to our news story in February 2012, HMRC has successfully appealed the tribunal’s decision in which a holiday lettings business was granted business property relief from inheritance tax.

The original tribunal ruled that a holiday let was too active an operation to be an investment and must be regarded as a business asset.

The Upper Tribunal has now reversed this, accepting HMRC’s argument that the business was ‘mainly’ one of holding the property as an investment. The business is therefore not entitled to any relief from inheritance tax.

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6 Ways to Avoid a Probate Nightmare

20th Jan 2013
We see all too often the mess left behind when somebody has not got their affairs in order, so to help avoid this we’ve created a checklist. ...
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6 Ways to Avoid a Probate Nightmare

20th Jan 2013

It is now 3 weeks into 2013 and many of those New Year’s resolutions are falling by the wayside.

One of the most popular resolutions is ‘sorting out my finances’ whether this is to get out of debt, save money or simply getting affairs in order.

But how do you actually achieve that New Year’s resolution?

We see all too often, through probate, the mess left behind when somebody has not got their affairs in order. This leads to needless complications, delays, stress and ultimately extra cost.

So to help avoid this we’ve created a checklist. Follow this and hopefully by 2014 ‘getting your affairs in order’ won’t need to be one of your resolutions!

  • Checklist for getting your affairs in order
  • Get all your paperwork in order and easy to find – making it simpler and quicker for your executors to administer your estate
  • Check all relevant polices are in Trust and going to the right people – avoiding assets going into your estate and delays in releasing the money
  • Make the most of tax exemptions now! – Lifetime gifts, annual exemption and regular gifts out of income are simple ways in which you can reduce your exposure to inheritance tax.
  • Make a Will – many people simply don’t get around to it, don’t be one of them!
  • Review your Will – well done for having one but it needs to be kept up to date;
  • Let people know where your Will is – there is no point having one if nobody can find it!

Look out over the coming weeks for our series on ‘Avoiding a Probate Nightmare’.

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IHT nil rate band set to rise

6th Dec 2012
George Osborne revealed in his Autumn statement that the tax free nil-rate band for inheritance tax (IHT) will increase in year 2015/16. ...
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IHT nil rate band set to rise

6th Dec 2012

George Osborne revealed in his Autumn statement yesterday that the tax free nil-rate band for inheritance tax (IHT) will increase to £329,000 in year 2015/16.

The current nil-rate of £325,000 has been in place since 2009.

The increase in the nil-rate band means that as of 2015/16 a married couple/civil partnership will be able to leave £658,000 before IHT is payable.

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Give to charity and the tax man pays!

17th Sep 2012
Today sees the start of ‘Remember a Charity Week’ which seeks to bring awareness about the importance of charitable gifts in Wills. ...
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Give to charity and the tax man pays!

17th Sep 2012

Give to charity and the tax man pays!

Pavilion Row is a supporter of ‘Remember a Charity’. Today sees the start of ‘Remember a Charity Week’ which seeks to bring awareness about the importance of charitable gifts in Wills.

Did you know that whilst 75% of people give to charity in their lifetime only 7% leave anything in their Will?

Following recent changes to inheritance tax (IHT) it is worth remembering when giving to charity there are tax advantages now available. If you plan to give 4% of your net estate to charity you can increase the gift to 10% without reducing the amount of inheritance the other beneficiaries receive. The tax man pays the difference!

From April 2012 IHT is reduced from 40% to 36% for people who leave at least 10% of their net estate to charity. This lower rate can only apply if part of the estate is chargeable to IHT at 40%. For example:


Example 1 Example 2
Net Estate £100,000 Net Estate £100,000
Charity Receives 4% £4,000 Charity Receives 10% £10,000
Remainder to be taxed £96,000 Remainder to be taxed £90,000
Tax at 40% £38,400 Tax at 36% £32,400
Inheritance for other beneficiaries £57,600 Inheritance for other beneficiaries £57,600

 

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SRA state “we haven’t failed to act”

27th Jun 2012
The SRA has asked us to point out that Elisabeth Davies, Chairman of the Legal Services Consumer Panel, did not state that the SRA had "failed to act." ...
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SRA state “we haven’t failed to act”

27th Jun 2012

Following our story “The Solicitors Regulation Authority (SRA) fails to act against those writing bad wills”, published yesterday, the SRA has asked us to point out that Elisabeth Davies, Chairman of the Legal Services Consumer Panel, did not state that the SRA had “failed to act” but simply they were “unaware of any action”.

In a letter to the Legal Services Board she states “Our jointly commissioned research found that solicitors and unregulated will-writers were equally culpable for producing sub-standard wills. However, while we are heartened by trade association initiatives to correct problems, we are unaware of any action to date by the SRA.”

Full details of Elisabeth Davies’ letter can be found here

In response, Antony Townsend, SRA Chief Executive, said: “The SRA strongly supports the LSB’s proposal that the list of reserved legal activities be extended to include will writing and estate administration. This step is necessary to secure the public interest. Consumers of these services are often particularly vulnerable and prone to exploitation; they need the protections which only proportionate regulation can provide.

In addition to undertaking supervision and enforcement activity where particular problems arise with will writing, we are now discussing with all our stakeholders how to improve standards of will writing both within the existing regulated sector and in the proposed new regulated community of will writers.”

Pavilion Row is happy to clarify the situation and apologise for any confusion.

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Solicitors Regulatory Authority (SRA) fails to act against those writing bad wills

26th Jun 2012
The SRA is failing to take action against solicitors who produced sub-standard wills. ...
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Solicitors Regulatory Authority (SRA) fails to act against those writing bad wills

26th Jun 2012

The SRA is failing to take action against solicitors who produced sub-standard wills for their clients according to Elisabeth Davies, Chairman of the Legal Services Consumer Panel.

In a letter to the Legal Services Board she states “Our jointly commissioned research found that solicitors and unregulated will-writers were equally culpable for producing sub-standard wills. However, while we are heartened by trade association initiatives to correct problems, we are unaware of any action to date by the SRA.”

The pressure for regulation continues. Ms Davies also states in the letter “We are acutely conscious that consumers will continue to lack adequate protections until regulation is introduced so it is important that this happens speedily. I know that the LSB is aware of this and will work with colleagues at the Ministry of Justice to make progress as quickly as possible.”

References

Legal Services Consumer Panel

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On the Road to Regulation

3rd May 2012
Pavilion Row is very excited by the LSB announcement last week of their proposals to regulate the area of will-writing and estate administration. ...
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On the Road to Regulation

3rd May 2012

Pavilion Row is very excited by the Legal Services Board (LSB) announcement last week of their proposals to regulate the area of will-writing and estate administration.

There are two key parts of the proposal

  • The recommendation that will-writing and estate administration activities be added to the list of reserved activities ( reserved activities are activities that can only be offered for a fee by regulated organisations)
  • Improvement of existing legal services regulation that currently applies to the majority of providers, e.g. solicitors, where the LSB’s view is that “currently it is not working well for consumers.”

Importantly their recommendations apply to all providers rather than just those with professional titles and are centred on a vision of consumers being best served by “competition between diverse providers within a well regulated market place”.

However, regulation is not going to happen overnight.

There are a number of consultations to go through before the LSB produce their final report in the Winter. And the LSB have stated that reservation should not take full effect until there are;

  • Approved regulators in place
  • Enough authorised providers to undertake the work

In our view it could be at least two years before this happens.

Pavilion Row is for regulation. We believe it provides a level playing field for all providers which will in return improve competition, innovation and the service delivered to customers. This can only be positive!

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New Research Examining the Markets for Probate and Estate Administration

20th Mar 2012
The LSB has published new research into probate and estate administration. ...
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New Research Examining the Markets for Probate and Estate Administration

20th Mar 2012

The Legal Services Board (LSB) has published new research into probate and estate administration. Two surveys were commissioned – a consumer survey and one involving the providers of these services.

Drawing evidence from the LSB’s research the Legal Services Consumer Panel (LSCP) has recommended that probate and estate administration should be made reserved activities along with will-writing services.

However the LSCP has stated that “There should be no monopoly for existing authorised persons; any business wishing to provide these services should be able to seek authorisation.”

The LSB will be issuing proposals as a result of its investigation into the regulation of will-writing, probate and estate administration in late April.

If you want further details regarding the findings please contact us.

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Inheritance Tax – Holiday lets are entitled to business property relief, says tribunal

3rd Feb 2012
The ruling states that the let was not an investment. ...
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Inheritance Tax – Holiday lets are entitled to business property relief, says tribunal

3rd Feb 2012

The First Tier Tribunal has rejected an attempt by HM Revenue & Customs to treat a holiday letting cottage as an investment and thus deny it business property relief from IHT.

In a recent case the tribunal ruled that a holiday let was too active an operation to be an investment and no intelligent businessman would treat it as anything but a business asset.

The tribunal found that:

  • The exploitation of the property as a holiday letting cottage amounted to the operation of a business for more than two year before the person’s death.
  • Even though it was not consistently profitable, the business was conducted with a view to gain and therefore satisfied the “for gain” requirement in section 103(3) of IHTA 1984.
  • The business did not consist wholly or mainly of holding investments so as to be excluded from the term “relevant business property” by the operation of section 105(3) of IHTA 1984.

We understand that the HMRC held back a number of other similar cases pending the tribunal’s outcome. Therefore the decision has been widely awaited and will attract considerable interest.

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Will the industry ever change?

31st Jan 2012
2011 - What a year for the Probate and Will industry. ...
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Will the industry ever change?

31st Jan 2012

2011 – What a year for the Probate and Will industry. It saw intense media scrutiny, a mystery shopping exercise, a Legal Services Board (LSB) report and a ‘call for evidence’ regarding the industry’s activities.

The need for regulation is being examined with serious intent. And importantly the consumer benefit of alternative non solicitor providers is now widely accepted.

But where does this leave us now, what is the fall out and what do you need to look out for?

2012 – We wait for the results of the LSB’s call for evidence to confirm whether they will make recommendations for regulatory protections. And we also have the Legal Services Act set to shake up the legal industry like never before.

Pavilion Row’s view is that the industry should be and will be regulated but while we wait here’s a check list to help ensure you get the right and best advice.

  • Make sure the appointed professional is a fully qualified member of the Society of Trust & Estate Practitioners (STEP). This is an absolute must. Not all solicitors are members of STEP and not all STEP members are solicitors
  • Check that the firm has professional indemnity insurance with a reputable firm
  • In a Will don’t appoint a professional executor unless you have written confirmation that they will stand down if requested
  • For probate, get confirmation of the fees and how they are calculatedRequest a fixed fee for probate. This will be possible in many cases but if not the firm should be able to explain why

At Pavilion Row all client advisors, will-drafters and probate administrators are qualified through STEP. We continue to offer a Will review service for anyone who is concerned.

Also, give us a call before committing to another provider. We are happy to give a quote and provide initial advice without charge.

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Will-Writing, STEP demands proper protection for consumers

29th Nov 2011
STEP has published a very helpful leaflet stating their views and position. ...
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Will-Writing, STEP demands proper protection for consumers

29th Nov 2011

In response to the ongoing investigating into the need to regulate will-writing and the associated fields of probate and estate administration STEP* has published a very helpful leaflet stating their views and position.

The leaflet outlines;

  • some of the current problems in the will-writing market
  • what STEP is doing to give consumers confidence they are dealing with well-qualified, reputable practitioners
  • how STEP plans to participate in future regulatory initiatives

An extract taken from the leaflet, which is titled ‘Building Consumer-Confidence in Will Writing’, states:

“Inevitably, the process of putting effective regulation in place for the will-writing and estate administration markets will take some time. In the meanwhile, the legal services market continues to change rapidly, not least with the arrival of alternative business structures widening the options for how legal services providers can be owned and potentially opening the way for an array of new entrants into the marketplace. STEP therefore decided early on that it needed to take measures to reassure consumers using STEP Members that they were dealing with practitioners with both proven standards of technical competence and a commitment to a strong professional code of conduct.”

The full leaflet can be found on http://www.step.org/pdf/WillWriting_WEB.pdf

At Pavilion Row all our client advisers, will drafters and probate administrators are qualified through STEP. We also follow and are committed to STEP’s professional code of conduct.

*STEP (The Society of Trust and Estate Practitioners) is the worldwide professional body for practitioners in the fields of trusts and estates, executorship, administration and related issues.

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