Blog - Nicholson Portnell Solicitors

A Major New Inheritance Tax Relief Residence Nil Rate Band

A new IHT relief is to be phased in from April 2017 starting at £100,000 and increasing in stages to £175,000 by 2020/21. There are however conditions attaching to the allowance which mean that it will not be available to everyone.

The intention of the new relief is to make it easier to pass the family home to direct descendants. Individuals who do not own property cannot benefit and nor can those without children defined under the statute . Additionally, estates worth over £2 million are subject to a taper relief which reduces and might potentially eliminate the benefit.

The relief is only available on death, and can only be claimed on the value of a property which has been occupied as a residence by the deceased at some time although it does not need to be their main home. There are separate considerations where someone has downsized or given away their property since 8 July 2015.

The recipient of the gift must fall within a specified list of descendants although this is widely defined and would include step children and foster children.

If a gift is by will to a beneficiary through a trust, care will be needed as not all trusts will qualify.

Gifts to grandchildren dependent upon them attaining a specified age would fall foul of the requirements.

March 29, 2017/by simon jewitt

Nicholson Portnell News

Confusion Not Stamped Out?

Almost a year has passed since George Osborne announced a new additional rate of Stamp Duty Land Tax (SDLT) to come into effect for those owning second homes and investment residential properties.

Despite the passage of time, the new regime continues to throw up problems, such as the following:

The first common problem relating to the additional SDLT charge occurs where parents assist their children in the purchase of a property. For example, a father might assist his daughter to purchase her property by sharing the cost with her and having the property put into joint names. Even though the property would be the daughter’s first property, if her father had not replaced his principal residence and was named as a legal owner at the end of the day of the transaction, the higher rates of SDLT would apply.

A second example where a purchaser will be caught out by the SDLT changes is that of a couple purchasing their first home together, where one member of the couple has an existing property which he or she does not sell. Whilst this is not an additional property for both members of the couple, the transaction is nevertheless subject to the SDLT surcharge.

The rationale for the SDLT Reform was to make the market easier for first time buyers, but these examples shows consequences which run contrary to this principle.

A further example is where there is an overlap between an individual’s purchase of their new main residence and the sale of their previous main residence, if, at the end of the completed purchase transaction, the purchaser owns two residential properties. The purchaser would then have to pay the higher rate of SDLT. This would be subject to the fact that it is possible that the SDLT could be recouped by the purchaser if the first property is sold within three years.

For advice in relation to this and numerous other aspects of the conveyancing process, contact Nicholson Portnell, where we will be pleased to help with your queries.

November 30, 2016/by simon jewitt

Uncategorized

Why should I seek legal advice if I am administering an estate?

If you have ever acted as an executor or an administrator of someone’s estate, you will probably appreciate that this can be a very difficult and demanding job. It can also be a role which is fraught with personal risk. In many ways, dealing with someone else’s assets is more problematic than dealing with your own.

There are various reasons why it might be preferable/comforting to have the benefit of legal advice/assistance if you find yourself dealing with the estate of a relative or friend. For example:

Executors/administrators can be personally liable to pay any estate debts out of their own pockets if these only come to light after the estate has been distributed (although action can be taken to limit this liability).
Claims can be made against an estate by certain disappointed relatives/dependants in certain circumstances, and again executors/administrators can be personally liable if they do not act prudently/cautiously.
H M Revenue & Customs can impose financial penalties on executors/administrators if they have not made full disclosure of all relevant matters (including any relevant lifetime gifts made by the deceased).
The Department for Work and Pensions has powers to claim back any overpayment of benefits which may have been made during the last few years of a person’s life. If the estate has been distributed in the meantime executors/adminstrators can be personally liable for any refund due.

November 1, 2016/by simon jewitt