Summer 2008 Newletter Now Available
Our services have developed:Our fixed price probate service is proving very popular - don't forget you don't have to be one of our clients, or even have a Will to use it. It is even more important to get professional help now that the tax rules have changed -you may be able to avoid thousands on pounds of Inheritance Tax. We will help you and your family in a sympathetic and sensitive way.Pilot Trusts Also known as Family Protection Trusts, pilot trusts provide a "safe haven" for death in service benefits or the proceeds of insurance policies when you die. They can save considerable amounts of tax and may protect assets if for example a spouse was to remarry or go into care or if one of your children was to divorce or become bankrupt. Discretionary Will TrustsThese provide the same protection as pilot trusts, but are part of your Will. Simple Wills may put your assets at risk when you die. Please call us if you think you might need a Family Protection Trust.Finance Act 2008 The 10p in the pound tax change made the headlines, but Inheritance Tax (IHT) changes announced in October last year have frequently been mis-reported and have caused widespread confusion. On 9 October 2007 in his first pre-budget report, Alistair Darling announced changes to the inheritance tax regime. These changes are incorporated in the 2008 Finance Act which became law on 21 July 2008. The changes affect the way married couples and civil partners who are domiciled in the UK are taxed on death, provided one or both of them was still alive on 9 October 2007. When the second of the spouses/civil partners dies, the new rules allow their executors to claim tax relief on any unused part of the first to die's tax free allowance, known as the Nil-Rate Band (NRB). The NRB is the maximum amount that can be given free of tax. The NRB for the tax year 2008-9 is £312,000. Please see examples in the box in the next column to see how this might work.Note that there is no automatic uplift in the tax allowance. Executors must claim any uplift and provide supporting documentation to demonstrate that there is an unused part of the tax-free allowance of the first spouse/civil partner to die. This might be hard to do if the first spouse died many years ago, as you have to show that no gifts in excess of annual allowances were made in the seven years prior to death. When we act for executors, we now produce a "Transferable Nil-Rate Band Pack" on first death with all the relevant information to make it easy for executors to claim the allowance on the death of the second spouse/civil partner.Lasting Powers of Attorney Lasting Powers of Attorney (LPAs) are documents which you can use to legally appoint people to act for you in your affairs if you are unable to do so yourself. They replaced Enduring Powers of Attorney (EPAs) on 1 October 2007. EPAs made and executed before this date remain valid. There are two forms of Lasting Power of Attorney: Property Affairs - covering legal and financial matters and Personal Welfare - covering health and Welfare matters. These new documents give increased protection to the person doing them and also provide a wider range of options for the appointment of people who can help. Clients without EPAs, especially the elderly, should consider them seriously. Those who have done EPAs may also wish to consider an LPA - Personal Welfare.