No change to inheritance tax following the Autumn Statement on 22 November 2023 It was very disappointing that there were no changes to the current inheritance tax regime despite the rumours that the rate of tax was set to be reduced. In fact, inheritance tax was not even mentioned. Fresh reports indicate that the bad press surrounding the rumours of cuts may have influenced the Chancellor’s decision. During a cost of living crisis, it was being negatively reported as a relief for the wealthy despite the reality being that inheritance tax is now affecting more Estates than in previous years. The current nil rate band of £325,000 has been in place since 2009 and is frozen until 2028. The Residence Nil Rate Band of £175,000 has not been increased since 2020 and is also frozen until 2028. The lack of increase of the allowances is essentially a stealth tax due to the increase in the value of assets and the resultant increase in the number of Estate affected. The current inheritance tax system is complex, and even a reform to simplify this would have been welcomed but has been overlooked once again. Taking expert advice in relation to Estate planning during your life, and your Estate engaging expert Probate Practitioners ensures that all possible tax mitigation is ensured.
Is inheritance tax soon to be abolished? Rumours are rife that the Chancellor, Jeremy Hunt is going to slash or abolish Inheritance Tax in this week’s Autumn Statement. This seems unlikely given that the current nil rate band allowance has been in place since April 2008 and is frozen until April 2028. What is Inheritance Tax? Inheritance tax is intended to tax the wealthy, however, due to the lack of increases in the inheritance tax allowances in recently years, and the increase in the value of land, more Estates are being subject to inheritance tax currently than for many years. Approximately 4% of Estates are now subject to inheritance tax. Although this is a very small percentage, the revenue in tax receipts for the 2022/23 tax year was around £7bn having increased 15% from the previous tax year and broke previous records. Contact our expert Probate team today The current inheritance tax system is complex, however, our expert team will ensure that all available allowances are claimed and the correct amount paid. Speak to our team today by calling 0191 691 3417 or email probate@browells.co.uk.
Enduring Powers of Attorney – I or a family member has one, what do I do? Until 1st October 2007, it was possible to appoint attorneys to safeguard your financial affairs under an Enduring Power of Attorney (EPA). What is an Enduring Power of Attorney? An EPA is a legal authority granted to one or more people, known as attorneys, by a mentally capable person to act on their behalf in property and financial matters should they lose mental capacity. An EPA can be used before it is registered, provided that the person granting the power (the donor) has mental capacity. However, if the donor has lost capacity or it becomes apparent that they may be losing mental capacity, an EPA cannot be used until it has been registered with the Office of the Public Guardian. An EPA made before 1st October 2007 remains valid and can be registered as long as the donor is alive. During the period registration, attorneys can only use the EPA in limited ways. The pitfall of an EPA is that it only gives authority to deal with financial affairs. If you become mentally incapable, your attorneys have no authority to act in respect of your health and welfare. If you have a loved one or family member who executed an EPA before 1st October 2007 and is losing or has lost mental capacity, our team are more than happy to assist with the registration process. Alternatively, if you are reading this and you have an unregistered EPA and have mental capacity to make your own decisions, you should consider making Lasting Powers of Attorney (LPAs) to replace your EPA. What is the difference between lasting and enduring power of attorney? There are a few differences when it comes to EPAs and LPAs. EPAs can be used immediately after they are signed, but can only be used following a loss of capacity following registration, whereas LPAs can’t be used until they are registered and can be used with or without capacity depending on the person’s stated preference. Lasting power of attorney for health and welfare can only be used following the loss of capacity. LPAs superseded EPAs following a review that determined a more robust and complex system should be put in place. LPAs enable you to appoint a trusted person to manage your property & financial affairs and health & welfare, should you become mentally incapable. Speak to our dedicated team of solicitors today If you would like to obtain more information or schedule an appointment to discuss your situation, please don’t hesitate to reach out to us. You can contact us on 0191 2503200 or email probate@browells.co.uk All initial 30 minute consultations are free of charge.