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WILLS, LEGAL, TAX PLANNING. |
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News
1) Enduring Powers of Attorney (EPA)
Joint property owners can no longer act as sole Attorneys for each other and must appoint a second Attorney as a matter of urgency. Call us. Members of our Professional Maintenance Service were automatically advised of the changes.
From 2007, you will write a Lasting Power of Attorney, rather than an
EPA - these can cover the same areas as an EPA plus those covered
currently by Advance Medical Directives. click here for more information.
Existing planning will not be affected by the new rules, so that is not
a good excuse for putting planning off further!
2) Unmarried and Single Sex Couples click for LATEST INFO
A Report is attempting to introduce Relationship Agreements to help in these circumstances. We can already take steps to safeguard the future of you and your partner, married or not. Single sex couples need to take extra legal steps to protect themselves and each other. Contact us Members of our Professional Maintenance Service will continue to benefit from regular updates and our free
helpline. To Government proposals summary.
3) Probate Changes click for full story
New rules have been introduced to simplify and speed up the administration of Estates under £240,000. This re-enforces the benefits of our "pay if and as you need us" Probate Advisory Service. Contact us
SINGLE SEX COUPLES
Under the new Law, same sex couples will have the same financial and legal rights as married couples, allowing them to share joint state pension benefits, obtain parental responsibility for each other's children and "maintain each other financially" says the DTI, as well as inherit property as a partner.
This will be available after 5th December 2005 to couples having gone
through the appropriate legal Civil Partnership Ceremony.
Although it will not be seen in legal terms as a marriage, couples will be able to register their relationship in the presence of two civil registrars and two witnesses, but will also have to dissolve any arrangement through the courts, in much the same fashion as couples seeking a divorce.
Once registration is taken, the couple will then be entitled to adopt the same rights to inheritance and intestacy rules as married couples, receive tenancy succession rights, as well as claim a survivor pension, become eligible for bereavement benefits, receive compensation for fatal accidents or injuries of their partner and register the death of the partner.
While the move is broadly welcomed, the decision to apply tax-specific reforms to England and Wales law only – to the exclusion of Scotland and Northern Ireland – has perplexed tax and technical experts.
A spokeswoman for the DTI confirms its powers over such matters are now devolved to Scotland and separately again for Northern Ireland, so the DTI has no control over them.
But this appears to be the first time devolved status has extended to tax laws.
An additional benefit which seems to appear within the consultation concerns 'insurable interests' law.
There is may be no limit to the amount a same-sex couple can insure each other for when purchasing an insurance policy, if the intention is to cover the cost of Inheritance Tax.
Testing of the same sex civil register was launched in London by Mayor Ken Livingstone in 2001, but there are now nine other countries in the European Union already have provision for recognising those in committed same-sex partnerships.
Consultation period for civil partnership closes on 30 September 2003.
PROBATE CHANGES
Beneficiaries seeking probate of a deceased's estate will now be able to use a simplified process of reporting to the Inland Revenue, providing the total sum of inheritance is no more than £240,000 and they do NOT have assets tied up in a "gifts with reservation" trust.
Changes to simplified reporting rules limit – from £220,000 to £240,000 – should now allow an additional 5,500 cases each year to obtain probate without needing to complete a full Inheritance Tax
(IHT) return.
But one of the key requirements if a client wants to take the simpler probate route is the deceased is not allowed to have placed their assets in a "gifts with reservation" trust which the Revenue no longer allows the use of.
Changes to access rules of these Potentially Exempt Transfer (PET) trusts were announced on Friday 20th June, and outlawed with immediate effect the use of trusts which also allowed the benefactor to still have access to those assets or property for their benefit.
This should probate change should mean is beneficiaries will be able to access their assets quicker and without filing a grant of representation through executors or administrators – a process which is otherwise known as "excepted estates" and requires all assets be added together, including gifts, but without deducting debts.
But this new ruling could also means that anyone now holding such a trust will be subject to tighter scrutiny and longer delays in processing the probate application as a penalty for holding money which the Revenue can't access.
Specifics of the simplified rules will apply if the deceased died in the UK and:
· the gross value of the estate – through passing by will or intestacy, nomination or trust is less than £240,000;
· any trust assets which the deceased has an interest in were held in a single trust and do not exceed £100,000 in value;
· the value of the overseas estate - i.e. outside the UK – is worth no more than £75,000;
· any lifetime gifts did not exceed £100,000 in value, were made within seven years of death and were only delivered in cash, quoted shares or securities, or land and buildings, and,
· the deceased at no time made a "gift with reservation" of benefit.
Revenue officials point out that these rules do not affect Scottish rules, requiring an inventory of the estate to be produced with any applications for confirmation to an estate.
This inventory must continue to be completed and presented to the Sheriff Clerk in the normal way.