Thursday, 17 July 2014

‘One man, two guvnors’: appointing deputies in the Court of Protection

Since February, when the President of the Family Division and the Court of Protection issued practice guidance on the publication of Court of Protection decisions, there have been many more Court of Protection cases reported in the mainstream press. 

If publication of cases raises awareness among the general public of the benefit of planning for incapacity, that alone will make it worthwhile.  Many people are still unaware of what could happen to their assets if they become incapable of managing them or what the options are in this respect.

Thursday, 3 July 2014

Dying without a will – the hard facts

‘I really must get around to writing a will!’  I have heard that refrain from several wealthy individuals recently and it’s often easy to assume that everyone who should have a will knows that and has one.  But such assumptions are dangerous.

I am constantly surprised by who doesn’t have a will.  However, the surprise works both ways because those who haven’t made a will are usually amazed to learn from me how the intestacy rules will operate on their death if they don’t make one.

Thursday, 19 June 2014

‘Reports of my death have been greatly exaggerated’: Trusts, IHT and the Government’s proposals

In its latest consultation document of 6 June 2014, the Government proposed some radical amendments to the Inheritance Tax (IHT) system, which will affect anyone planning to set up new trusts or add to existing ones after 6 June 2014.

Thursday, 5 June 2014

Best will for……..Part 2: Married entrepreneurs

I am lucky enough to meet inspiring entrepreneurs on a regular basis in the course of my work.  Although they are busy building up successful business empires in very different sectors, they all tend to have one thing in common, though.  Their Inheritance Tax (IHT) planning is non-existent!  Yet if they knew what was at stake, their priorities might be rather different.

Thursday, 22 May 2014

Challenging times for wills

For many would-be inheritors, matters of inheritance matter!  Will Aid’s 2012 survey revealed that:
  • 60% of 18-24 year olds would use an inheritance to buy a home;
  • 48% of 35-44 year olds would repay their mortgage; and
  • 40% of 45-54 year olds would use an inheritance to provide a pension.
The reliance upon inheritances is borne out by anecdotal evidence from some of my financial adviser friends.  Adult children are factoring in their expected inheritance when assessing their future financial security and making plans.  These days, some children cannot afford not to inherit. 

Thursday, 8 May 2014

UK trustees: do you speak FATCA?

Do you know any UK resident trustees?  If so, do they realise that they need to be getting up to speed with FATCA (the Foreign Account Tax Compliance Act), even if the trust has no US citizen settlors, beneficiaries or US situated assets?!

Thursday, 24 April 2014

Changes afoot for owners of UK residences

The Government recently issued a consultation entitled ‘Implementing a capital gains tax (CGT) charge on non-residents’. Now, if you are UK resident for CGT purposes, you might have formed the view, quite reasonably, that, in view of its title, you need not add the consultation to your pile of bedtime reading. Tut tut, how could you be so silly?!

Buried deep within the consultation is a proposal which could also affect UK residents owning two or more residences. More on that below. First, here’s a quick summary of the main proposals in the consultation:
  • The Government is proposing that CGT should be extended to non residents disposing of UK residential property, starting in UK tax year 2015/2016. It is not yet clear whether the changes will apply only to gains accruing post April 2015.
  • Non resident individuals, including those owning jointly or in partnership with others, and non resident companies and trustees will be affected. The precise details of how the new CGT extension to non resident companies will mesh with their existing obligations under the Annual Tax on Enveloped Dwellings (ATED) regime are yet to be worked out.
  • Unlike ATED, there will be no minimum threshold of property value to which these changes will apply.
  • The key criterion is whether the property is used, or suitable for use, as a dwelling or residence. It need not be the owner’s main residence though. Buy-to-lets and second homes are also caught. In notable contrast to ATED, where there is relief for property rental businesses, there will be no relief for buy-to-lets. 
  • The rate of tax for individuals will be 28%. The rate for others has not been announced.
  • The tax will be collected through a combination of a withholding mechanism and self-reporting option, the former operated by professionals such as solicitors or accountants.