Categories

TRUST REGISTRATION – deadline looming!

15th Jul 2022
The Trust Registration Service “TRS” deadline of 1st September 2022 for non-taxable trusts is now only… ...
Find out more

TRUST REGISTRATION – deadline looming!

15th Jul 2022

The Trust Registration Service “TRS” deadline of 1st September 2022 for non-taxable trusts is now only a matter of weeks away and all the indications are that there are many trusts that remain unregistered.

 

It is important that all Trustees  understand the need to register a trust, including those that they may not even be aware of!
Which trusts are affected?

The majority of non-taxable trusts are now within the scope of the registration regime.

This includes lifetime Trusts but, importantly, also Trusts set up by a Will when somebody dies.

Will Trusts are often “passive” trusts which can easily be overlooked or forgotten about by Trustees. For example, a Life Interest Trust containing a share of the property. If the life tenant (often the spouse) remains living in the property, it is easy to forget or not realise that there is a Trust which needs to be registered.

What are a trustee’s responsibilities?

Legal responsibility for registration falls on the trustees, and it is a matter for trustees to decide and appoint a lead trustee to do this.

The trustees are required to keep accurate and up-to-date written records of the beneficial owners, including settlors (the people who established the trust), trustees, and beneficiaries.

The lead trustee is also required to update the register within 90 days of any changes/ updates occurring.

What happens if you do not register a trust with the TRS?

There is a legal obligation for trustees to register the trust.  If you do not register the trust or keep the details on the register up to date, HMRC may impose penalties and fines for non-compliance.

 

Please contact us if you would like any advice.

Close

Asset Protection Trusts, are they the Silver Bullet

19th May 2022
When used appropriately, trusts can be a great way to protect assets. However, too often… ...
Find out more

Asset Protection Trusts, are they the Silver Bullet

19th May 2022

When used appropriately, trusts can be a great way to protect assets. However, too often they are sold by unregulated firms as the ultimate solution for everything, promising to protect the family home from care fees, minimise Tax, and prevent probate costs.

These schemes are expensive, risky (as they may not work), totally inappropriate for many, and difficult to get out of.

A recent article in ‘This is Money’ is well worth a read to appreciate real life examples of the extent and scope of the problems that these sales tactics have caused.

There was also a segment on BBC’s RIP off Britain, last week, interviewing families affected by these types of trusts, often marketed as products such as, ‘The Family Property Probate Trust’, ‘Family Probate Preservation Trust’, or ‘Lifetime Living Trusts’

Important, this is a specialist area of law. Anyone considering this type of planning must first speak directly to somebody who is fully qualified to give advice.

Please see  our factsheet for further information.

Close

UPDATE ON LEGISLATION FOR SIGNING OF WILLS

31st Jul 2020
This week the Government have announced that they will be introducing temporary legislation to allow… ...
Find out more

UPDATE ON LEGISLATION FOR SIGNING OF WILLS

31st Jul 2020

This week the Government have announced that they will be introducing temporary legislation to allow people to use video link to witness a will being executed.

This legislation does not extend to permitting electronic signatures. Wet signatures of the person making the will and the witnesses are still required. Also, witnessing pre-recorded videos of the person signing the will is not legally acceptable. It must be viewed in real-time.

IMPORTANT; the guidance states that the remote method should only be used in an emergency when conventional witnessing is impossible.

When signing remotely there are defined stages that must be followed to ensure the validity of the will and the attestation clause must be changed to reflect that the will has been signed by this method.

We are advising clients that if they need to sign their will via this method, then they must inform us in advance so that we can change the attestation clause. We will also be the witnesses to ensure that an appropriate file note has been made of the signing.

Close

HMCTS – Normal probate service should be restored soon

24th Oct 2019
HM Courts and Tribunal Service (HMCTS) has announced in a recent update that the backlog… ...
Find out more

HMCTS – Normal probate service should be restored soon

24th Oct 2019

HM Courts and Tribunal Service (HMCTS) has announced in a recent update that the backlog of probate grant applications is beginning to fall. With more grants of probate now being issued each week than the number of applications received.

HMCTS says it is optimistic that service will return to normal routine ‘very shortly’, in which grants to solicitors are issued within ten working days.

Through the summer we were experiencing delays, of up to 12 weeks, in receiving the grants.

Close

Controversial probate fee increase proposal has been scrapped

14th Oct 2019
Robert Buckland, the Secretary of State for Justice, has announced that the huge increase in… ...
Find out more

Controversial probate fee increase proposal has been scrapped

14th Oct 2019

Robert Buckland, the Secretary of State for Justice, has announced that the huge increase in probate fees proposed under the former Prime Minister Theresa May has been scrapped.

The increase would have charged probate applicants up to £6000 depending on the value of the estate. Currently there is a flat fee of £155, if the application is made through of solicitor, or £215 for personal applications.

Buckland has announced the he has decided that the policy was not ‘fair and proportionate’. The related statutory instrument, which has for months been awaiting parliamentary approval, will be withdrawn. Instead, the next annual review of court fees will consider making small adjustments to cover the costs of probate applications.

Close

Proposed probate court fees increase – scrapped for now!

21st Apr 2017
In a surprise U-turn last night the Ministry of Justice have scrapped for now the… ...
Find out more

Proposed probate court fees increase – scrapped for now!

21st Apr 2017

In a surprise U-turn last night the Ministry of Justice have scrapped for now the proposed increase in probate fees. They have stated that there is not enough time for the proposed legislation to go through parliament ahead of the general election.

Nothing has been said as yet on whether scheme will be brought back if the government are re-elected.

Further Reading:
BBC News

Close

New Intestacy Rules – What do they mean?

1st Oct 2014
Today new rules come into force for the laws covering people who die without a will. ...
Find out more

New Intestacy Rules – What do they mean?

1st Oct 2014

What are the new Intestacy Rules and who do they affect?

Today, sees new rules come into force for the laws governing what happens to someone’s assets when they die without a Will (intestacy law) and who can make a claim against an estate.

One of the controversial parts of the new rules is around the modern family i.e. who receives what if you were co-habiting. Many professionals were pressing for those in unmarried relationships to receive a portion of their partner’s estate if they die without a Will.

At present, unmarried partners are legally entitled to nothing even if they share children or have cohabited for many years. The new laws do not change this. Die without a Will and your partner receives nothing. Their only recourse is to make a claim against your estate.

Having covered what is not changing, what actually does change?

One of the biggest changes is for married couples and civil partners without children. Under the old rules the survivor received the first £450,000 plus half the rest. The other half was split between blood relatives according to strict rules. Under the new rules the survivor receives everything.

For married couples and civil partners with children the theory of “life interest” is now eradicated. The new rules are significantly simpler, with the survivor entitled to the first £250,000 plus half the remainder. The children share the rest. Previously the spouse only got a life interest in half the remainder i.e. they received the income from their half but the capital was protected for the children.

Finally, one of the other significant changes is to the scope of people who are entitled to claim against your estate. As well as redefining who is classified as a dependant the new rules now recognise the ‘blended family’. For example, your partner’s child can now claim against your estate as if they were your child. Even if your partner died before you! Although, it’s worth mentioning that, this doesn’t automatically mean they will be successful if a claim is made.

The changes to the intestacy laws once again highlight the importance of making a Will. If you want to choose who inherits you need to have a Will. Furthermore make sure it’s up to date and relevant.

Above is just an overview of the main changes that will affect decisions when making a Will. There are other technical changes, including certain powers of Trustees, that we have not mentioned.

Please let us know if you or your clients require any further information.

Close

NEW code of conduct for Will preparation

15th Jun 2014
In response to the UK government’s decision not to regulate Will writing STEP has launched a new Code of conduct for Will Preparation. ...
Find out more

NEW code of conduct for Will preparation

15th Jun 2014

In response to the UK government’s decision not to regulate Will writing STEP has launched a new Code of conduct for Will Preparation that all STEP members who prepare Wills MUST adhere too.

Only STEP members can claim to be compliant with the code which sets out standards of transparency and service that a client can expect when using a member. This reassures a client that they are getting the best level of advice and service when doing a Will.

Some areas addressed in the code include;

  • Pressure to appoint the Will company as executors in the Will
  • Selling of unnecessary complex Wills
  • Misrepresenting the consequences of not making a Will
  • Obtaining advance payment for probate plans
  • Inadequate storage facilities

All Pavilion Row‘s Will advisers and Will drafters are members of STEP and are therefore bound by the new code.

When STEP announced the launch of the Code Geoffrey Shindler OBE TEP, STEP President , commented: “The Code will, I hope, become the hallmark to which all aspire when drafting wills. It is a condition of membership that we all adhere to the code, but it should be seen less as a burden and more as a positive benefit. It will demonstrate to clients, the public, to the government and to regulators that we are of a gold standard when it comes to preparing wills for individual clients.”

Pavilion Row see this as a very positive move forward to improve the quality and level of service within the Will industry. It will, we hope, help to eradicate ‘cowboy Will writer’ behaviours, practised by a very small minority, that are currently tarnishing the industry.”

Since the launch of the STEP Code the SRA have launched new non-mandatory guidelines for solicitors who prepare Wills.

The guidance has a focus on professional ethics and behaviour and includes;

  • NOT misleading a client to believe they have to retain a solicitor to write their will, or that it is the norm.
  • NOT as a default position appointing themselves as professional executors
  • The solicitor not encouraging the client to appoint them as executors unless there is a clear reason to do so e.g. it is likely to be contentious or complex

Whilst only STEP can guarantee a true level of qualification in this niche part of law we see that the STEP Code and the SRA guidelines are setting the path to creating a much fairer and transparent service for the clients

Close

What about my inheritance?

13th Mar 2014
When a marriage breaks down and it comes to dividing up finances often people often ask 'What about my inheritance?' ...
Find out more

What about my inheritance?

13th Mar 2014

When a marriage breaks down and it comes to dividing up finances often people often ask ‘What about my inheritance?’

Guest Article – Angela Moore, Jarvis Family Law

During a marriage, particularly a lengthy marriage, it is very possible that one or other spouse may have received significant monies from the death of a parent which have been put towards reduction of the mortgage on the home, purchase of buy to let investment property or maybe a holiday villa in Spain.

The question is then raised ‘Does that money or property come back to me as it was from my parents?’

In short the answer is not necessarily. The ability to “ring fence” an inheritance will depend upon when it was received, how much it amounted to, what the other assets that are available for division, and what the respective financial needs of the parties are particularly for rehousing.

Whether you are trying to protect an inheritance upon divorce or claim against inheritance wealth, legal advice is certainly worthwhile.

Angela Moores says “a High Court case published during August 2011 known as AR v AR examines this topic once again. The principle of fairness is referred to throughout that case. What however amounts to fairness will vary from one case to another and from one person’s perspective to another”.

There is no mathematically exact calculation that can be done and each case is different- hence the need for expert family law advice at the outset to set everyone on the right track as to their expectations.

Another question asked around this inherited wealth issue is ‘What about any amount my spouse is going to receive post divorce from parents who are not yet deceased?’

An asset cannot be considered to form part of the assets for division on divorce unless and until it actually belongs to one or other of the spouses. Therefore something that may or may not happen in the future (such as the receipt of an inheritance) cannot be taken as certain and cannot be taken into account. The parent may need to utilise their monies for residential care prior to their demise. Similarly the parent may determine to spend spend spend on cruises, high living and enjoying their final years. Generally, an inheritance has no certainty or entitlement until a person dies.

In answer to the question posed, it may be if a death is anticipated in the short term, that some form of contingent payment could be built into a settlement. If a settlement is not a “clean break” settlement (ie there are ongoing financial responsibilities between the spouses such as maintenance payments) then once an inheritance falls in, such ongoing issues can be revisited. However the benefit of a “clean break” deal is that each party is free to go forward in life without the risk of further claim from the other and that includes on any future inheritance.

Close

Planning your digital afterlife

4th Feb 2014
What happens to your digital assets when you die? ...
Find out more

Planning your digital afterlife

4th Feb 2014

What happens to your digital assets when you die?

Our lives in regards to who we are, what we do and what we own are increasingly managed digitally.

Any assets managed digitally, i.e. accessed or held online, are referred to as digital assets. These can range from online gaming accounts, to photos, digital music, bank accounts, domain names, cloud storage etc, etc.

Should you die the duties of your executors in relation to digital assets, as with any other assets, are to identify them and arrange transfer to beneficiaries or sell them. However;

  • How do the executors know the assets exist?
  • Are the assets worth anything?
  • Can the executors access the accounts?

As your Will is usually stored securely you could incorporate details, including passwords and usernames, within it. However this is not very practical; every time you change something you would need to change your Will.

The key is that people know the assets exist. A simple list stored with other important documents will at least tell your executors what you’ve got and where to find it.

But are these assets worth anything?

It has always been common for people to leave books, CDs, vinyl collections etc to someone in their Will but what about online versions? Buy music from iTunes and you don’t own it; you simply have a perpetual licence to play the music. The licence is personal and not transferrable. In effect you are just renting it. Similarly digital book providers, such as Kindle, prevent a purchaser from passing on e-books or sharing passwords.

By contrast online games may have a value especially where a lot of time has been spent accumulating a character’s skills, weapons, money etc. Websites such as www.armorybids.com run auctions of gaming accounts allowing you to sell on these characters.

However digital assets are of no value if nobody knows they exist. Frequently forgotten digital assets include loyalty programmes such as air miles which CAN often be transferred.

But how do my executors access the accounts?

The law in this area has been slow to catch up with technology. Currently accessing the deceased accounts with their username and password may mean the executor is committing fraud!

Many companies providing online services have created their own polices for dealing with deceased accounts such as Google’s ‘inactive account manager’. There are also online password storage facilities, like Password Box, with legacy features but these still don’t resolve the issue of whether or not your executors can access your accounts. The problem is there’s no set approach.

In a bid to resolve this issue STEP has created a Working Group to look at access, control and ownership of digital assets when a user dies or is incapacitated. The intention of the group is to create a protocol that can be adopted by all online providers. The challenge will be how, when this is an international market, to create one approach that can be adopted globally.

This is an increasingly important issue with, as yet, no definitive outcomes. We will keep you updated as things develop.

Close

What’s domicile? And why does it matter?

18th Dec 2013
The question of domicile is fundamental to how a person’s worldwide assets are taxed in the UK during their lifetime and on their death. ...
Find out more

What’s domicile? And why does it matter?

18th Dec 2013

Guest Article by Louise Battison, Chartered tax Adviser with Tax Perspective

The question of domicile is fundamental to how a person’s worldwide assets are taxed in the UK during their lifetime and on their death. It is particularly important that the issue of domicile is considered whilst the client is alive and able to arrange their financial affairs tax efficiently.

A person domiciled in the UK is subject to inheritance tax (IHT) on their worldwide assets. A person who lives in the UK but is not domiciled here will only be subject to UK IHT on their assets situated in the UK.

Sometimes it is easy to make assumptions about a person’s domicile position but because of the complexities of law those assumptions may not be correct.

“A common belief is that a person’s domicile is simply based on where they live or where they where born but this is not always the case.”

A child usually obtains their domicile from their father, regardless of where the child is born or lives. A child born in the UK to a father domiciled in India will have a domicile of origin in India. However, if the father changes his own domicile before the child reaches the age of 16 then the child’s domicile also changes.

Therefore, you may find you have to establish your client’s father’s domicile before you are able to establish your client’s domicile with any degree of certainty.

However, to counter potential tax avoidance HMRC have a concept of ‘deemed domicile’. If an individual is in the UK for 17 out of 20 tax years HMRC will deem them as domiciled in the UK and their worldwide estate will be subject to UK tax.

This means it is usually difficult to do any IHT planning based on a person being non UK domiciled if they have been in the UK for 17 or more of the last 20 years.

A few countries, including India, Pakistan, France and Italy, have double tax treaties with the UK that were written before ‘deemed domicile’ was introduced. The treaties with India and Pakistan offer the most scope for effective IHT planning and you don’t need to have been born there to make use of this.

If your client has lived in the UK for many years but their father was domiciled in India or Pakistan and they can illustrate that they don’t have any permanent intention to stay in the UK, you could save them a considerable amount of money through effective estate planning.

Importantly they must have an English Will for their UK assets and a non-UK Will to ensure their non-UK assets don’t pass through the UK Will. This must be done correctly and professional advice should be taken to ensure that one Will is not revoked by the other.

Close

Regulation of will-writing is rejected

16th May 2013
The Lord Chancellor yesterday rejected the recommendation made be the Legal Services Board to regulate will-writing activity. ...
Find out more

Regulation of will-writing is rejected

16th May 2013

The Lord Chancellor yesterday rejected the recommendation made be the Legal Services Board (LSB) to regulate will-writing activity.

In their statement announcing the decision it recognises that the report produced by the LSB indicates a consumer detriment in the will-writing market. However it felt that the report doesn’t adequately demonstrate that regulation is the best solution or that all other options have been sufficiently exhausted.

The statement went on to say that as separate work is being done to look at simplifying the current legal services regulatory landscape and as part of this the Lord Chancellor will consider whether it would be appropriate to bring will-writing within the scope of legal services regulation, it wouldn’t be beneficial to add complexity to the regulatory landscape in advance of this work.

Whilst the will-writing industry will not be regulated at this stage it is clear that it will continue to be under scrutiny. Pavilion Row’s advice remains; when making your Will choose somebody, whether will-writer or solicitor, who is a member of the Society of Trust and Estate Practitioners (STEP).

A key concern arising from the original LSB report into will-writing was the poor technical quality of the Wills. One in four of wills examined by the panel were found to be inadequate. However simple or complex you believe your affairs to be it is imperative that you get the right advice and your Will is drafted correctly. Too often problems with Wills are not found until the person has died and it is too late to rectify.

STEP members are the most highly trained in this specialist area of law.

Close
123