inheritance-tax

Category Archives: Probate & Estate Adminstration

Is your Will tax efficient?

Most people are aware that when you die you can leave a certain amount to your family without paying Inheritance Tax.  This is called the Nil Rate Band (NRB) and it is currently £325,000 per person (provided no gifts over £3,000 were given in 7 years before death).

inheritance-tax

In April 2017 the government introduced a new tax allowance called the Residence Nil Rate Band (RNRB) which can be claimed in addition to the NRB in order to limit or possibly completely avoid your estate paying Inheritance Tax.

The RNRB is an allowance that specifically applies to your home; it is currently £150,000 per person and is due to increase to £175,000 in April 2020.  This means that from next year a person can potentially leave £500,000 tax free upon their death.

This sounds like great news, however there are conditions to the RNRB.  Firstly the property must be left to a direct descendant e.g.  child, step-child, grandchild.  Other more distant relatives such as aunts/uncles or nieces and nephews do not qualify.

Secondly, the property must be left to the person directly without any conditions such as upon the beneficiary reaching a certain age, this is because it means the property is being held on trust, and is not a direct inheritance.  If there is a trust in a Will whether the RNRB is available will depend on the type of trust; if it is of a discretionary nature then the RNRB cannot be claimed.

Thirdly, if your estate is valued at more than £2 million then the RNRB will reduce by £1 for every £2 the estate is over this amount.  So, if your estate in total is more than £2.2 million then you do not qualify for the RNRB.

Finally, if the value of the house is less than the RNRB then the balance of the allowance cannot be used to offset against your other assets.  For example if your estate has a property worth £100,000 and cash assets of £400,000, the £150,000 RNRB would mean no tax is due on your property but the remaining £50,000 of the RNRB cannot be used to reduce tax on the cash assets.

As with the NRB the RNRB can be transferred between spouses.  This is because any gift to a spouse is tax free, so if a husband dies first leaving everything to his wife, there is no tax to pay no matter the value of the estate.  This means he is considered to have not used his NRB or his RNRB, so when the wife dies if she is leaving everything to the children, she can use her own NRB, RNRB and then claim her husbands unused NRB and RNRB, so she could leave a total of £1 million tax to free to their children.

It is important that your Will is written in a way to take advantage of the tax allowances available in order to make your estate as tax efficient as possible.  Seeing a solicitor to take advice and discuss your personal circumstances is the best way to ensure this happens.

For more information and advice contact a member of our Private Client team.

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Saddleworth Summer Show

Did you spot our Senior Partner John Ainley selling ducks in Uppermill yesterday?

Saddleworth Show

The duck race will be part of the Rotary’s Saddleworth Show 2019 next week which promises to be bigger and better than ever.

North Ainley Solicitors are proud to sponsor the event which raises thousands of pounds for local and international charities.

Get yourself down to Well-i-hole Farm, Greenfield from 1pm next Sunday 30 June 2019!

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Continuing Best Practice following a successful Lexcel Assessment

North Ainley Solicitors has once again successfully secured the Law Society Legal Practice Quality Mark, Lexcel.Lexcel

Lexcel is an optional, recognised accreditation scheme for Law Firms and in house Legal Departments which gives the public the assurance that a Practice meets high Client Care and Business Management standards.  North Ainley originally achieved the standard in 2011 and has successfully retained the accreditation at each annual assessment thereafter.

John Ainley the senior partner of the firm said “we are delighted to have retained the Lexcel Accreditation.  There have been a number of changes to the standards in the last year, particularly in light of the recent GDPR requirements.  It is reassuring to know that our procedures are up to the mark.  There is a lot of choice in the legal services market but being Lexcel Accredited demonstrates our commitment to Client Care and Best Practice.  The best interests of our clients and staff are at the heart of the way we work”.

Also posted in Business Employment, Commercial & Corporate, Commercial Litigation, Employment, Family, Legal Briefs, Litigation Disputes, North Ainley News, Private Client, Property Development, Residential Property | Comments closed

Dementia Action Week

This week is ‘Dementia Action Week’ across the country and we are doing our bit.  This Friday 24 May 2019 members of our Private Client team will be at the ‘Dementia Information Day’ at Oldham Library.

PC Dementia

Danielle and Jennifer from our Private Client Department will be set up, ready and waiting at the Oldham Library to provide you with more information about dementia and will be on hand to provide you with advice on how you can get your legal affairs in order, so please come along and see us.

To find out more and how we can help you please pop in between 11.00 am and 4 pm.

Click here for more information on Dementia Action week.

 

 

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Do not run out of time!

JudgementThe very recent case of Cowan v Foreman and others, highlights the importance of  bringing claims in a timely fashion.  In this case, a widow tried to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (“the Act”) against her husband’s estate.  The Act states that claims must be commenced within six months of the date probate has been granted.  The Court does have discretion to allow a claim to be brought out of time.  In this case the claim was brought 17 months after the date probate was granted.  The Judge refused the widow permission to bring the claim, commenting there was no justification for the delay.

The moral of the story is that if you think you may have a claim, act quickly and seek legal advice.

For further information and advice, please contact Johanna Nolan in our Dispute Resolution team.

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Mahdlo Will Week

We are once again pleased to be supporting Mahdlo – Oldham’s annual ‘Will Week’ this week.

will week

We are working with Mahdlo to provide members of the public with an opportunity to access our Will preparation services, whilst at the same time raising funds to support Mahdlo.  The scheme is running from the 4th to the 8th March inclusive.

In return for a set donation to Mahdlo we will prepare your simple Wills.  A Single Will (£100) or Mirror Wills (£150).

We still have a few appointments left so be quick and call us to book in on 0161 624 5614 quoting ‘Mahdlo Will Week’.

For more information on Mahdlo visit their website on https://www.mahdloyz.org/

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Annual STEP Dinner

A team from our Private Client Department, along with partners John Ainley and Geoff Lamb, attended the Annual Dinner of the Society of Trust & Estate Practitioners (STEP) at the Bridgewater Hall in Manchester last night.  John Ainley is a former Chairman of the Manchester Branch.

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Our Jennifer Kitchener was selected to attend the Dinner and honoured as a high achiever having attained some of the highest marks in the recent STEP examinations.  Many congratulations to Jennifer who is a key member of our team dealing with Wills, Probate, Lasting Powers of Attorney and Trusts.

The STEP exams are a prestigious specialist qualification which carries international recognition across all sectors of the commercial world.  In addition to legal qualifications, North Ainley expects all our team to attain this high standard of academic and practical achievement.

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Choosing the right lawyer

It can be a big decision to instruct a solicitor and it could end up costing you a lot of money, so you need to get it right!

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Certainly, it can be tempting to go to the first firm you think of, drive past on the way to work or that has the fanciest offices but there are some things you should consider before parting with your hard earned cash:

Specialism – Often, high street practices try to be a jack of all trades, with the same Solicitor offering advice on all manner of problems. But, if you have an employment law issue why would you want advice from a Solicitor with a background in property law? Do your research and make sure the Solicitor you will see is a specialist in and has good experience in the area you need advice on.

Recommendations – from people you know and trust are always useful but if your friend recommends a firm because they did a good job of selling their business, it does not make them best placed to help you make a personal injury claim.

Attitude – Make sure you are on the same page. If you want to resolve your issue amicably, you do not want an aggressive lawyer who will rack up costs arguing over nothing. Likewise, if you want a robust approach, don’t instruct a wallflower. A good lawyer will explain the options and alter their approach based on your instructions and will be mindful of how their approach will affect your costs; even if that means telling you what you don’t want to hear.

Alternatives – Does the firm promote and actively engage in other ways of resolving legal problems; such as ACAS Conciliation for employment problems or Mediation or Collaborative Law for family matters? Again, a good lawyer who isn’t just interested in taking your money will encourage these approaches where appropriate.

Likeability – Believe it or not, not all solicitors are cut throat so it’s important that you feel comfortable speaking with your legal adviser and that you feel able to build a relationship of trust and confidence. That said, just because you might want to go for a pint with them does not mean they will give you quality legal advice.

Fees – Make sure you have a very good estimate of what it’s likely to cost and when you will be billed. From 6 December 2018, all Solicitors websites must display prices and service information for residential conveyancing, probate, unfair & wrongful dismissals, debt recovery and licensing applications.

Choice – Remember you don’t have to use any firm which may already have been ‘assigned’ to you – perhaps by your employer when handling a settlement agreement or your car hire company when dealing with an Road Traffic Accident.

At North Ainley, we have been advising the people of Oldham since 1901 but that doesn’t mean you will get out of date advice, just lots of experience! Our size allows us to combine a friendly, personal service with city professionalism from a team of specialist Solicitors and legal advisers.

For more information, please call Laura Campbell, a Solicitor in our Dispute Resolution team on 0161 624 5614.

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Should I set up a Trust?

Increasingly our clients consult us about gifting assets to their offspring and family during their lifetime, rather than on death by Will.

There are a number of advantages to giving this course of action consideration.  Many would prefer to see their beneficiaries receive the gift during their lifetime or perhaps the beneficiary has an urgent need for the financial support.  It could be that a child or grandchild requires money for a deposit for a house and our clients often feel a desire to offer a helping hand.  Lifetime gifting can also be important as far as inheritance tax and estate planning is concerned.

Frequently our clients are concerned about the improper use of the money gifted.  Perhaps they wish to ensure the funds are put towards a specific purpose.  Instability or suitability of a beneficiary’s relationship and the capability of a beneficiary to manage their money can also cause concern.

A solution is to transfer the funds into a Trust, rather than make an outright gift and instead of directly transferring ownership of the funds to the beneficiary, a formal document is put in place with a set of conditions and rules.  The client decides who should be the recipient of the funds and who should be responsible for ensuring the conditions are met and the rules adhered to.  They are known as the Trustees and careful consideration should be given to this choice.

The amount of flexibility in decision making given to the Trustees is also determined by the way in which the paperwork is drafted.  It is possible to give the Trustees wide discretion over the decisions they make and they are guided by a Letter of Wishes.  This flexibility allows the Trustees to make decision about the funds in light of a beneficiary’s changing personal or financial circumstances and with continuing consideration to changes in legislation.

The popularity of this course of action is increasing and specific, tailored advice should always be taken.

If you would like to discuss this further with a member of our experienced Private Client team, please do not hesitate to contact us.

 

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New government proposals signal substantial increase in costs following death

In many cases following a death, it is necessary to make an application to the Court for a Grant of Representation (often known as Probate) in order to administer a deceased’s estate. The government has recently announced plans to increase the fees payable to the Court when applying for a Grant.  Previously, the Court has not charged a fee to extract the Grant for estates with a value of less than £5,000 and a fixed fee of either £215 for personal applications or £155 for applications made through a solicitor for all estates over £5,000.

The new proposed fees, which are subject to parliamentary approval, will be based on the value of the estate, rather than any increase in the administrative role and responsibility of the Court.

The planned structure will result in Estates with a value below £50,000, being charge no fee and those valued between £50,000 and £300,000 the fee will increase to £300.  In the case of estates valued between £300,000 and £500,000 the fee will now be £1,000 and between £500,000 and £1 million £4,000.  The increase in fees continues, with estates valued between £1 million and £1.6 million paying £8,000 and between £1.6 million and £2 million £12,000.  Over £2 million the fee is £20,000.

The reform to the fee structure has been met with much disdain from the legal sector, with feelings of this being nothing more than an additional “death tax”.

Practitioners are frustrated with the proposal which will see the estates of more wealthy clients being subjected to a much higher fee for what is largely the same application.  As the level of work required by the Court does not change there seems to be little justification for changing the fees to a value based structure.  It is claimed that it is to bring it in line with the fees charged for other Court applications; in particular civil claims. It seems to be an opportunity to fund the Court system as a whole by charging those who are presumed as being able to afford it.

In many cases an estate (in particular any which involve a property) cannot be administered and assets passed into the hands of beneficiaries without the Grant. Therefore, estates are being charged high Court fees for what is a compulsory application, a principle which is not reflected in many other applications to Courts.

There are also practical difficulties with the hike in fees.  The fee must be paid before the Grant is issued and in many cases, assets in the estate are frozen until the Grant is issued.  This creates a “catch-22” situation of needing the funds to get the Grant but needing the Grant to get the funds.  In response, the Court has suggested that the Court fee be funded by the executors or beneficiaries personally, who will be reimbursed once assets are available.  Some executors or beneficiaries will be unable or unwilling to find these fees in advance.

The proposals add a new burden to the responsibilities of an Executor, and may result in an unwillingness of executors to accept the role.  Furthermore, creditors may see a delay in settlement of debts while funds are made available to apply for the Grant.

For those families that have recently suffered a bereavement and need to obtain a Grant, it would be worth applying to the Court before May this year if the estate is over £50,000.  It is recommended that legal advice is taken on this issue as soon as possible.

Consideration should also be given to structuring assets to enable flexibility to meet the fees rather than relying on an executor or beneficiary to subsidise an estate until there is sufficient liquidity to repay them.  Anyone opposing the new fee structure can sign a Petition at https://petition.parliament.uk/petitions/188175

For further information please contact Charlotte Pritchard & Jennifer Kitchener who are both Solicitors in our Private Client Department.

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  • In This Section

  • I would just like to say how amazing Cassie has been from start to finish. I would, without doubt, recommend her to friends and family. Cassie was polite and professional at all times. Thank you so much.
    Mr D Booth - Oldham
  • Lisa Wright
    Lisa Wright
    15:05 25 Feb 19
    Cassie was fantastic throughout our sale and would recommend North Ainley if selling or buying a house.read more
    Lynn Findlater
    Lynn Findlater
    18:55 01 Dec 18
    I have used North Ainley for a number of years. They have successfully dealt with my parent's wills and more recently the sale of 2 properties. The staff are exceptional and imparticular Cassie who took care of the whole process from start to finish whilst I was overseas. She diligently chased all third parties and kept me informed at all times. I would recommend North Ainley as they have proved themselves time and again over the last 10 years in all of my family's legal affairs.read more
    Idnan Ahmed
    Idnan Ahmed
    12:57 30 Nov 18
    Excellent service. handled my latest commercial purchase professionally. Would recommend to anyone who is looking for a solicitors who are proffesional and easy to work with. Top service.read more
    Lucy Hoy
    Lucy Hoy
    16:39 27 Nov 18
    Excellent! Very friendly and fantastic communication throughout. Nothing was to much trouble. Thankyou Vinesh and Cassie. Would definitely recommend.read more
    Anil M
    Anil M
    15:11 04 Nov 18
    Fantastic Solicitors firm. Very professional. Close to Oldham Town Centre. Answer all your questions and concerns. Keep you upto date at every stage. I have used this firm for many years in buying and selling property. You can not go wrong using North Ainley Solicitors.read more
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