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Wills: Are you using the Certainty Will Register yet?

What’s the point of making a will for your client if their loved ones don’t know where to find it when they die?  In a recent survey, 67% of people did not know where to find their parents’ wills.  Every firm I know holds wills of people who have died – wills that were never collected by the deceased person’s family. These are all lost opportunities for firms who have prepared wills, probably at a loss. Changing circumstances, moving to another area or simply the passage of time can sometimes make it difficult for beneficiaries to locate a will.  And then, of course, there are the people who deliberately “lose”

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Is your client worried about having to sell their house to pay care fees?

Many people worry about needing long term care in the future, and having to sell their house to pay for it.  Some ask whether they can give their house to their children or other family member now, in order to protect it from being sold. There are a number of things for your client to consider before making a major decision like this and the Law Society has issued guidance for anyone considering giving their house to children or other family members, which is set out below. As an alternative to giving their house away, there are trust options that may be more suitable to their needs. Things to consider before giving a house away If

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Tax: DIY investors aren’t taking advantage of capital gains tax (CGT) allowances

According to new research from Prudential, many DIY investors are failing to consider important taxes and charges when making investment decisions.   44% admit they don’t know which product would be most appropriate for their circumstances, 37% aren’t sure how to avoid tax traps, and 19% aren’t confident they’ll keep under their annual Capital Gains Tax (CGT) threshold. Using the CGT threshold correctly helps investors maximise returns in a tax-efficient way. However, despite 81% DIY investors saying they understand CGT, only 28% knew the allowance. More shocking is that only 7% of DIY investors claim to use their capital gains tax allowance each year, rising to 15% for high net worth investors. Matthew Stephens, tax expert at Prudential, commented:

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Tax: Budget puts stop to some inheritance tax planning

In his recent Budget Statement, the Chancellor announced that new legislation will be introduced to stop inheritance tax (IHT) mitigation schemes that rely on deductions for liabilities owed by the deceased. The current rules allow executors to deduct from the taxable estate any debts owed by the deceased at death, whether or not the liabilities are paid after death and regardless of how the borrowed funds have been used. According to HMRC, this has been exploited by avoidance schemes involving contrived debts that are never repaid, so there is no real reduction in the value of the estate. One example of such a scheme is where a person sells an asset to his wife

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Power of Attorney: Managing a bank account for another person is to become easier

A comprehensive framework for people who need to manage a bank or building society account on behalf of someone else has been produced by the Law Society, the British Bankers’ Association (BBA), the Building Societies Association (BSA), the Office of the Public Guardian (OPG), and other partners. The new guidance was launched on 3rd April and aims to help staff in banks and building societies to recognise and understand Enduring Powers of Attorney, Lasting Powers of Attorney, General Powers of Attorney, Deputyship Orders, Receivers Orders and other third party management arrangements. Thousands of relatives and carers need to manage an account on behalf of another person who is elderly, vulnerable or unable to manage

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Will disputes: Court decides Will that cut family out is invalid.

The family of  Iris Jolly have been battling in the High Court to prevent her estate passing to her elderly friends. Mrs Jolly made a will in August 2010, less than two months before she died at the age of 80, which left an estate worth £500,000 to her  “dear friends” Richard and Pamela Phythian, both in their 70s. Mrs Jolly’s family claimed the will was not validly executed and she lacked the mental capacity to make the will at the time it was written. The court heard that Mrs Jolly had suffered severe mental decline after the deaths of her husband Alf and her twin brother.   Mrs Jolly’s niece Lynda Turner said her aunt was a

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Probate: Consultation begins on inheritance and trusts bill

The government has issued a draft Inheritance and Trustees’ Powers Bill based on recommendations published by the Law Commission in December 2011.  The draft bill includes the following provisions: Intestacy Rules – removal of life interest trust As things stand, if the deceased leaves a spouse and children, the surviving spouse receives only the first £250,000 of the estate. The remainder is split in two, with half going to the deceased’s children outright and the other half going to the children when the surviving spouse dies (a life interest trust). Under the new bill, the surviving spouse gets the £250,000 statutory legacy, the deceased’s personal chattels and half the balance

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Wills: Confusion over lifetime gifts made to beneficiaries of a will

The recent case of Kloosman v Aylen highlights the confusion that can arise when lifetime gifts are given to the same people who are due to benefit under a will. In September 2007, Richard Frost made a will that divided his estate into thirds; one third for his daughter Linda, one third for his daughter Susan and the remaining third for his son and grandchildren. Soon after making the will, Mr Frost sold his London house for £350,000 and moved in with his daughter Linda.  A few weeks later, knowing he was dying of cancer, he made cash gifts of £100,000 each to Linda and Susan. When Mr Frost died in March 2008, his estate consisted of the remaining

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Tax: £9.4m painting is a “wasting asset” for capital gains tax purposes

Since writing about this case in December 2012, the executors of the Castle Howard estate in Yorkshire have succeeded in getting the £9.4 million painting classified as plant and machinery, thus avoiding capital gains tax on its disposal. The painting in question is “Omai” by Joshua Reynolds.  It is a portrait of a young Tahitian brought back to England by Captain Cook in 1774.  It was bought by the Howard family soon afterwards and remained at Castle Howard in North Yorkshire for two hundred years.  It was sold in 2001 by Simon Howard, who had just been through an expensive divorce and needed to raise additional funds to help pay the estate’s running costs. 

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Tax: Budget 2013 Summary

The 2013 Budget was largely a confirmation of previously announced changes.  Here are the main points for individuals. Income Tax As previously announced, from 6th April 2013 tax on income over £150,000 will be reduced from 50% to 45% (37.5% for dividend income). All other income Tax and National Insurance Contributions rates will remain at their current levels. The standard Income Tax personal allowance increases to £9,440 on 6th  April 2013.  As previously announced, the higher age related personal allowance will remain frozen at current rates. Cap on unlimited Income Tax reliefs As previously announced, the new cap on unlimited Income Tax reliefs will come into force on 6th April 2013. The reliefs will be

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