Archives: December 22, 2011
Reduced rate of IHT where there are charitable gifts
No comment
Taxpayers who leave 10% or more of their net estate to charity may benefit under the Finance Bill 2012 by a reduction in the rate of inheritance tax from 40% to 36%.
The provisions are complex as to ascertaining whether 10% or over of the net estate has been applied to charity and do not apply to post death variations under IHTA 1984 (s.143 & s.144).
The Inland Revenue will be working with professionals to reach an approved formula to be included in Wills which enable testators to be confident that the tax saving is achieved. It may also introduce an online calculator but this is still in consultation.
This is still in the form of a bill and has not been voted through Parliament and made into an Act, though it is believed it will be shortly. The new rate is set to apply where death occurs on or after 6 April 2012. If this is of interest to you, please contact the Wills & Probate department of this fi
Employment tribunal fee plans criticised
No comment
The Law Society has condemned as creating a barrier to justice government plans to introduce fees for taking claims to employment appeals tribunals.
The government is consulting on charing fees in order to transfer costs of running the employment tribunal system to users and to encourage parties to resolve disputes without going to tribunal.
However, Law Society president John Wotton warned that many people who have just lost their job are facing financial uncertainty would be unable to pay fees of between £150 and £1,250.
In it’s own response to the consultation, the Employment Lawyers Association warned that charges could cost more money than they save, It said that the administrative burden of dealing with the payment and remission of fees has been ‘seriousl underestimated, undermining the aim of saving taxpayers’ money’.
The consultation closer on Tuesday.
Law Society wary on shared parenting
No comment
The Law Society’s family law committee has cautioned against introducing a legal presumption of shared parenting after divorce, following indications that the government may seek to change the law.
Childrens minister Tim Loughton has said that the government is ‘looking closely at all the options for promoting shared parenting through possible legislative and non-legislative means.’ He said: ‘Our vision is to establish that, under normal circumstances, a child will have a relationship with both his or her parents, regardless of their relationship with each other.’
A statutory presumption of shared parenting following divorce or seperation was considered but rejected in the Family Justice Review, led by former civil servant David Norgrove, published last November. Norgrove said such a change risked creating a presumption of a parental right to shared time, undermining the principle of paramountcy of the welfare of the child set out in the Chldren Act 1989.
Naomi Angell, co-cahir of the Law Soceity’s familt law committee, said the committee would oppose a presumption of shred time, thought i supportede the idea of maintainging contact with both parents where safe to do so. The right to contact should be viewed from the child’s persepctive, Angell said/
The Ministry of Justice said it will publish its response to the Norgrove review shortly.
EPC’s – what you need to know from 6 April 2012?
No comment
On 6 April 2012 the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2011 (SI 2011/2452) come into force. This amendment to previous legislation makes the following key changes:
- an Energy Performance Certificate (EPC) must be commissioned before marketing any buildings, whether residential or commercial, for sale or rent
- all ‘reasonable efforts’ must be made to ensure that an EPC is obtained within seven days of marketing the building; where it has not been secured during that period, there is an ‘absolute duty’ to obtain it within 21 days of the end of that period
- written property particulars, including descriptions made available electronically, must include the first page of an EPC; it is no longer possible to include only the asset rating
- the EPC must be provided to prospective buyers or tenants ‘at the earliest opportunity’ and not be delayed until shortly before the parties enter into a contract for sale or rent
- Trading Standards Officers will have increased powers enabling them to force sellers, landlords or any persons acting on their behalf (such as estate agents or letting agents) to prove that an EPC has been commissioned and to provide a copy of the EPC for inspection on request, and they can issue a Penalty Notice if evidence is not provided within seven days
- air-conditioning systems (above 12kW) must be inspected every 5 years and an inspection report lodged onto the central EPC register for which a lodgement fee can be charged
An improved and redesigned EPC format will also be introduced from 6 April. Changes include a single energy efficiency graph, clear signposting to the Green Deal and which recommendations for energy efficiency improvements could be funded through this forthcoming innovative new financial mechanism.
As a result of the EPC changes, Domestic Energy Assessors (DEAs) will need to obtain a top-up qualification. If they fail to qualify by 6 April, they will not be able to continue practising as an energy assessor until they do. And if they fail to qualify by October 2012, they must re-take the full DEA qualification.
Probate – Executors and Estate Debts
No comment
Did you know that when you administer someone’s estate as executor or administrator, you may be liable for claims from beneficiaries you were not aware of to debtors you did not know existed, when distributing the estate?
At Ziadies we can help you, the Executor/Administrator or, avoid such pitfalls. We can ensure that you are fully protected against claims from potential beneficiaries you were not aware of at the time of distribution of the estate, by arranging for statutory notices to be placed correctly.
Our experienced Solicitors will assist you through what can be a difficult process every step of the way, ensuring always that you are fully protected against any claims. In the unlikely event that litigation commences, we have the experience to advise you fully.
We can also help you administer the estate, by collecting in all the relevant information regarding the deceased’s assets and liabilities and thereafter ensuring that all the necessary steps are properly carried out: including payment of any inheritance tax liability, arrangements for the sale or transfer of any property, and the distribution of the estate.
Fees for Employment Tribunals
No comment
The Ministry of Justice set out its options on fees for employment tribunals:
– The claimant would be charged an initial fee of between £150 and £250 to begin a claim, with an additional fee of between £250 and £1,250 if the claim went to a hearing.
– The claimant would pay a single fee of between £200 and £600 for a claim of up to £30,000 rising to £1750 for claims above this amount.
Under both options, there would be fee waivers for those on the lowest incomes. Justice minister Jonathan Djanogly said it was “not sustainable” for the taxpayer to cover the £84m cost of funding the tribunal system.
Deeds of Variation
No comment
Post Death Deeds of Variation are a method by which the terms of a Will can be altered. They must be entered into within 2 years of the death in question. They are a very useful tax planning tool, however it is important not to rely on them to the detriment of preparing a Will as they may not be available indefinately.
A recent case highlights how the Courts view some aspects of Post Death Variations (“PDV”).
In (Wright v Garter [2011] EWHC 2881 {Ch}) the grandfather (Edward) & the father (Kieran) of a 3 year old boy called Rory, both died in quick succession, each without leaving a Will. Under the intestacy rules, Rory was entitled on the statutory trusts to part of his father’s estate (which included monies from the unadministered estate of his grandfather, Edward). It should be noted that on the statutory trusts Rory would become entitled to the capital and income at age 18.
There was no inheritance tax (“IHT”) payable on Edward Wright’s estate. Kieran Wright’s estate however, had to pay £89,000 in IHT.
Rory’s mother, Ellen, and her solicitors prepared a PDV firstly to avoid the inheritance tax “IHT” bill, and secondly to defer Rory’s entitlement to the age of 30 as Ellen felt that an 18 year old may not be able to properly control the sizeable income & capital, which would be around £750,000.
The PDV was submitted to the Court for approval. The Court was happy to approve the tax saving part of the variation, however it was not happy with that there was lack of separate representation of Rory’s interests – Ellen as one of Kieran Wright ‘s personal representatives put forward the PDV for approval and also acted as Rory’s litigation friend. Also no consideration had been given to the possibility of Rory failing to obtain a vested interest (e.g. if he died before the age of 30) and the interests of those entitled under those circumstances were also not represented.
Norris J explained that in these matters the Court had to be satisfied that the outcome was to the minor’s benefit (usually financial but not exclusively) and it was not enough to show that it does not do him any harm. Apart from the clear immediate benefit of an IHT saving of £89,000 there was a disadvantage in the proposed PDV trust which would lead to anniversary charges and exit charges. Also, the PDV deferred Rory’s entitlement for 12 years; a lengthy period. Ellen contended that the delay conferred a moral benefit in her son by preventing him from being in absolute control though able to access funds in the usual way, upon request when needed, subject to the approval of the trustees.
The Court found that the PDV was almost a resettlement rather than a variation. There was nothing in Rory’s character to suggest that he would not be able to deal with his entitlement till he reached the age of 30 and Rory had the right to have his independence as a young adult.
The Court approved a revised Variation in which:
The trustees included a professional, non- family member;
Rory became entitled to the income at 18;
Rory became entitled to 10% of the capital at 21;
Rory became entitled to the balance at 25; and
Default trusts providing for the eventuality of Rory not attaining a vested interest were included.
It is important to glean from this case the following and the private Client team at Ziadies Solicitors can advise you at every stage:
1. As an adult, it is very important to make a Will and provide for your family whatever your age;
2. The Court is happy to approve straightforward IHT saving measures and so it is important to obtain advice when dealing with an administration of an estate, especially if IHT is payable, as there may be a way of achieving a tax saving.
3. The Court will always ensure the interests of the young and vulnerable are duly protected.
4. Any trust prepared must be carefully thought out with all the eventualities considered and provided for and the interests of all involved separately represented, if appropriate.
5. It is acceptable to stagger the entitlement of a beneficiary so that they take control of funds over a period of time and not in one go – that may be a good lesson to learn when drafting inter vivos or will trusts.
Please call Louisa Calligas, Manal Fouad or Esteddar MacGreggor who will advise you in this regard.
Is It Sex Discrimination?
No comment
The recent case of Chief Constable of Hamshire v Haque has raised questions as to what is direct sex discrimination.
It overturned a tribunal order that it had been sex discrimination to call a nursing mother on maternity leave to a disclipinary hearing. The applicant had in fact attended but said that facilities were unsuitable and claimed to be at a disadvantage.
The decision said that each case must be on its own facts and that the Tribunal should have looked at the particular circumstances.
A Tribunal must establish what the reason is for the disadvantageous treatment. Behaviour may be unreasonable without being disriminatory.
Defamation and Libel
No comment
It is often said that publication is the essence of defamation – but what constitutes publication? A recent case has reignited the debate about when a defamatory remark can be said to have been published. More specifically, it has added to the confusion about when a claim can be struck out on ‘Jameel grounds’.
Eady J ruled that a defamatory email sent to a since recipient constituted publication and was suffieicient to found a claim for deformation. He refused to strike out the case. The defamatory email contained allegations that two claimants has committed a large-scale fraud against a royal family, and that a third claimant had knowingly assisted with this.
Historically, the orothodox view was that it was enough that the defamatory statement be communicated to one person. But recent case law testifies to a surge in the number of cases being struck out for abuse of process – precisely because the statement has been published to an insigificant number of people.
New Policy Guidance for Marriage
No comment
On 7 November 2011 the UKBA announced the minimum age for partners to apply for entry clearance or leave to remain is once again 18 years. These new rules came into effect on 28 November 2011.
This follows a decision made by the Supreme Court in the case of Quila and Bibi v Secreatry of State for the Home Department (2011) UKSC 45.
This will affect applicants for entry clearance or leave to remain as a fiance (e), propsed civil partner, spouse, civil partner, unmarried partner or same-sex partner.
Previous refusals since 27 November 2008 can be reviewed if the sold reason for refusal was that either the applicant or sponsor was aged between 18 and 20. The deadline for seeking such a review is 31 May 2012.
