Barclays Wealth states people do not understand Inheritance Tax rules

Barclays Wealth has stated that there are people who do not understand the rules surrounding Inheritance Tax, and they have issued a warning about the levy. Barclays Wealth states nearly a third of those asked wrongly believe ISAs are exempt from Inheritance Tax.

Similarly, 40 percent believe they will be able to gift money to their immediate family without paying Inheritance Tax.

Britons have been proven to be equally confused when it comes to the gifting of property upon their eventual death. Over a quarter of those asked said they did not know if the value of their property would be considered as separate to the rest of their financial assets.

Barclays Wealth has therefore warned many individuals could be “caught out” by their lack of understanding of the rules.

This could mean loved ones face a higher tax bill as a person has not taken the steps while they were alive to reduce their IHT bill as much as is legally possible. 

Inheritance Tax Rules

Inheritance tax (IHT) is payable at 40 percent on the value of an estate above a certain threshold of a person who has passed away. To avoid taxation as much as is legally possible, many people choose to take preventative action before they pass away. However, research from Barclays Wealth has shown many people are failing to understand how IHT works.

In England and Wales, if an Estate is worth more than £325,000 when a person dies, then they typically have to pay Inheritance Tax. Currently, the Inheritance Tax rate is 40% on anything above the threshold. If a person leaves more than 10% of the estate’s value to charity, then the rate may reduce to 36%.

If inheritance tax is payable

The grant of representation will not usually be issued until the inheritance tax (IHT) has been paid to HMRC. This can potentially cause a delay in the administration of the estate.

You usually have to pay 10% of the tax due on the value of property and shares plus all of the tax due in respect of the rest of the estate. This tax payment should be made within six months of death. The additional tax is payable in yearly instalments over a ten-year period, or as soon as they are sold. Interest will start to accrue on any outstanding inheritance tax after six months from the date of death.

How we can help

Here at The Inheritance Experts we work with solicitors who have years of experience dealing with inheritance claims. This includes Inheritance Tax matters. Contact us today by filling in our contact form. Or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Prince Philip’s £10m estate could be passed to Queen with Inheritance Tax exemption under married couples’ rule

The Queen may face an Inheritance Tax exemption on the Duke of Edinburgh’s estate if he has left his entire estate to the monarch.

Married couples can pass their estate to their spouse with an Inheritance tax exemption when they die. This means they can avoid a 40% tax above a £325,000 threshold. 

An obscure legal clause also allows inheritance to pass from “sovereign to sovereign” or the consort to a reigning monarch. This means that the Queen could pass it on to Prince Charles when she dies with another Inheritance Tax exemption. 

The Royal Family could potentially be hit with having to pay millions to the taxman if the Duke leaves a bequest to other family members. However, there would no inheritance tax bill if he left everything to one of the hundreds of charities he supported. 

Official Government tax advice says there is normally nothing to pay “if you leave everything above the threshold to your spouse, civil partner, a charity or a community amateur sports club”. 

Giving smaller amounts over 10% of the estate to charity attracts a tax rate of 36 percent on some assets. 

Inheritance Tax Rules

In England and Wales, if an Estate is worth more than £325,000 when a person dies, then they typically have to pay Inheritance Tax. Currently, the Inheritance Tax rate is 40% on anything above the threshold. If a person leaves more than 10% of the estate’s value to charity, then the rate may reduce to 36%.

If inheritance tax is payable

The grant of representation will not usually be issued until the inheritance tax (IHT) has been paid to HMRC. This can potentially cause a delay in the administration of the estate.

You will normally be expected to pay 10% of the tax due on the value of property and shares. You also have to pay all of the tax due in respect of the rest of the estate. This tax payment should be made within six months of death. The rest is payable in yearly instalments over a ten-year period, or as soon as they are sold. Interest will start to accrue on any outstanding inheritance tax after six months from the date of death.

If there are further assets in the estate, or the value has not been correctly stated, you may have to give HMRC a corrective account and pay any additional tax.

How we can help

Here at The Inheritance Experts we work with solicitors who have years of experience dealing with all manner of inheritance claims. This includes Inheritance Tax matters. Contact us today by filling in our contact form. Or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Government Tax Day is set to Simplify Probate

The Government announced in their recent ‘Tax Day’ that around 200,000 executors and beneficiaries of estates will no longer have to complete inheritance tax forms because of changes that they have made according to a recent report. This is set to simplify probate, as it will cut the red tape and reduce the paperwork people currently have to fill out.

The Current Rules for Probate

Probate is required in England and Wales when the deceased owns property. This includes houses, buildings, and land. When a bank or financial institution requests a Grant of Representation, this also requires probate. Usually, this happens when property goes over the threshold that the institution sets.

The financial institutions where the deceased had investments or bank accounts all have their own rules about when they require the document. This is regardless of their value, so sometimes there may be other reasons an institution asks for the document.

In England and Wales, if an Estate is worth more than £325,000 when a person dies, then they typically have to pay Inheritance Tax. Currently, the Inheritance Tax rate is 40% on anything above the threshold. If a person leaves more than 10% of the estate’s value to charity, then the rate may reduce to 36%.

In England and Wales, it can take up to a year to complete probate. This depends on the assets and if there is a valid Will. In most cases HMRC conduct a thorough review of the Inheritance Tax information the executor provides.

How the New Rules Simplify Probate

The new rules will simplify the time it takes to grant probate by reducing the amount of paperwork that the executor must fill in before the court issues the grant.

The Government confirmed: “Today’s update will also cut inheritance tax red tape for more than 200,000 estates every year, dramatically reducing the amount of paperwork many families fill out.

“Over 90 percent of non-tax paying states each year will no longer have to complete inheritance tax forms when probate or confirmation is required from January 1 2022.”

Contesting Probate

Under the Inheritance Act, you only have six months from the date they issue the Grant of Probate in which to contest a will. Beneficiaries who are making a claim have twelve months. There is no statutory time limit for probate disputes around fraud.

Only someone who has an interest in the will is legally able to dispute probate. This includes individuals who are:

  • Official beneficiary.
  • Have a promise from the testator they will receive the property.
  • Somebody or some debt collector that the testator still owes money to.
  • They can also be someone financially depending on the testator but left out of the will. Examples may include their unmarried partner or child.

How we can help

Here at The Inheritance experts we work with solicitors who have years of experience dealing with all manner of inheritance claims. This includes probate. Contact us today by filling in our contact form. Or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Trust Registration Deadline Extended

HM Revenue and Customs (HMRC) has stated that it will extend the Trust Registration Service (TRS) deadline as they have revealed that the service will not meet the original March 2021 deadline. The Trust registration deadline has been extended to some time in the Summer, according to a report by Today’s Wills and Probate.

Last July, the government set a March 2022 deadline for existing trusts to register on the TRS, or to update their records if they had already done so. The transition period had to be an extended one not just because it would take a long time for the millions of UK trusts to register, but also because HMRC had to fundamentally redesign the existing TRS to cope with the expansion.

Trust Registration and the Extended Deadline

Currently, trustees or their agents must register a trust using the Trust Registration Service (TRS) if the trust has been deliberately created by a settlor (it is an ‘express trust’) and it is currently liable to pay any of the following taxes:

  • income tax
  • capital gains tax
  • inheritance tax
  • Stamp Duty Land Tax
  • Stamp Duty Reserve Tax

Some estates also have to be registered if the personal representatives need to complete a Self Assessment Trust and Estate tax return. The Trust registration deadline has now been extended so all Trusts that need to can register in time.

Trust and Inheritance Disputes

The cause of trust and inheritance disputes can vary enormously. However, at the centre of every challenge is a person who believes they are victims of unfair treatment. For instance, trust suffers from improper management. Additionally, the trustees may interpret the intentions of the trust.

People make challenges in a number of ways. For instance, they target the value of the assets within a trust, or there might exist a fundamental disagreement between beneficiaries.

We can help if you:

  • Want to remove a trustee.
  • Disagree with the reported value of assets a trust holds and want to query it.
  • Need to make a claim against a trust for money it owes to you.
  • Want support and guidance on how to best carry out your duties as a trustee.
  • Find that the trust has ambiguous wording, and you want to clarify the structure.

We can also help you if you are considering challenging the terms or the management of a trust if you have yet to register it. We can advise you if you’re unsure whether you have legal grounds to do so. The team at The Inheritance Experts can help you understand your rights and options.

How we Can Help

Here at The Inheritance Experts, we work with solicitors who have years of experience dealing with all manner of Inheritance claims. Contact us today by filling in our contact form. Or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Contesting Probate Without A Will

When someone dies, probate must be completed. Probate is the process which allows the executor to legally distribute the Estate of the deceased. The Estate includes everything that the person owned when they died, including property, money and possessions. Probate usually takes between 6 and 12 months, and usually begins when the person’s death certificate is finalised. Contesting probate without a Will is similar to contesting probate with a Will, however the way you contest it is slightly different.

If someone dies without making a Will, this is known as dying intestate. Regardless of whether a person has made a Will or not, the process of tarting probate is the same. However, the probate process differs in who decides how the estate is divided.

When Someone Dies Without Making A Will

Usually when a person dies, their Estate is divided according to their Will. This means that their estate goes to who they want, how they want. If a person dies intestate, then laws known as laws of intestacy come into effect. These laws place relatives in a priority order of who inherits the estate, starting with the spouse. After the husband, wife, or civil partner,  the order is:

  1. Children
  2. Grandchildren
  3. Great grandchildren
  4. Parents
  5. Siblings
  6. Nieces and nephews
  7. Other close relatives

When someone dies intestate, only a beneficiary of the estate can apply for the authority to administer the estate. This person will be known as the administrator of the estate (as opposed to an executor when there is a Will). The role of the administrator is very similar to the role of the executor.

The administrator must apply to the Probate Registry for a legal document called a grant of letters of administration. This document grants them legal authority to deal with the deceased person’s assets and administer their estate. Without this document, the administrator will not be able to sell their property and they may not even be able to close their bank accounts.

Contesting Probate Without A Will

If the person had no Will and you feel that they would have left you something if they had made a Will, you can make an Inheritance Act claim. The Inheritance (Provision for Family and Dependants) Act 1975 is

“An act to make fresh provision for empowering the court to make orders for the making out of the estate of a deceased person of provision for the spouse, former spouse, child, child of the family or dependant of that person; and for matters connected therewith.”

In simple terms, the act ensures when a person passes away, every beneficiary earns a provision. A beneficiary is anyone who receives something in a Will. Inheritance Act claims are claims certain categories of people make against the estate of a deceased person.

These people are:

  • A spouse/civil partner of the deceased
  • A former spouse/civil partner
  • Children of the deceased, including children or adoption or those reasonably brought into a family
  • Financial dependants of the deceased
  • In certain cases, cohabitees

How We Can Help

Here at The Inheritance Experts we work with solicitors who have years of experience dealing with all manner of inheritance claims. This includes Inheritance Act claims. So contact us today by filling in our contact form or by calling us on 01614138763 to speak to one of our friendly knowledgeable advisors.

How does A Coroner’s Inquest Affect Probate?

When contesting a Will time limits can be strict. For example, you must contest the Will within 6 months of probate. But what happens if there is a coroner’s inquest into a person’s death?  Does this coroner’s inquest affect probate?

How does a coroner decide to do an inquest?

It is common for deaths to be reported to a coroner. The role of the coroner is to establish why, when and how a person has died, and they may decide that an inquest into the death is needed to establish these facts. Some of the reasons people report deaths include:

  • Unknown cause of death
  • Violent or unnatural cause of death
  • The death was sudden and unexplained
  • The deceased wasn’t seen by a medical practitioner during their final illness
  • There is no medical certificate available

There may be many reasons where a coroner decides to or must hold an inquest into a person’s death. Some of these include: after a post-mortem, the cause of death is still unknown, the person possibly died a violent or unnatural death, or the person died in prison or police custody

How does a coroner’s inquest affect probate?

Once the coroner receives report of a death, they produce a death certificate. If a coroner decides that there needs to be an inquest into the death, then they delay the death certificate until the inquest has reached it’s conclusion. However, once the post-mortem has taken place, the coroner can release the body for the funeral and issue an interim death certificate, which confirms the identity of the person who has died.

While the Executor is waiting for the final death certificate, they can use the interim death certificate to notify banks and other organisations of the death. They can also use this to apply for the Grant of Representation. This means that the Probate process can begin even though the death has not yet been registered and the final death certificate has not been issued.

This means that, even when a coroner has begun an inquest, the process of probate may have started. So the time limit to contesting the Will may have already begun. It is important to know when the process of probate starts. This is because this could be key to starting a claim to contest probate.

How We Can Help

Here at The Inheritance Experts we work with solicitors who have years of experience dealing with all manner of inheritance claims. This includes contesting Wills and contesting probate. Contact us today by filling in our contact form, or by calling us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Younger People Making Wills in the Pandemic

There has been an increase in younger people making Wills during the pandemic. The average age of Will makers at the start of 2020 was 58, and the Gazette has now reported that the average age of people making Wills is now 47.

A recent study showed that millennials are also considering their own lifetime planning needs, making more financial plans than the older generation, and there is now a younger generation that have a better understanding and attitude about being prepared for the future and the benefits of a making a Will at a younger age. 

Before the pandemic, less than half of UK adults had made a Will. This has since risen during COVID-19, with a rise in enquiries concerning making a Will of 75% since the start of the pandemic. The Financial Times reported in March that some law firms saw enquiries double in the first few weeks of lockdown.

This is no surprise as the worry of losing a loved one has been at the front of many minds during the pandemic. Many people may have also thought about making sure they care for their loved ones should something happen to them. Thus leading more people to think about making a Will.

The Importance of Younger People Making Wills

A Will is a document that allows you to leave money, possessions, or assets to certain people after your death. These people are known as beneficiaries. You can also leave gifts to charities in your Will, and you can include funeral wishes in your Will. Therefore, making a Will is important to ensure your wishes are followed.

There are three types of Will you can make. These are:

  • Single
  • Mirror
  • Trust

Making A Will to Protect Children

If you have children under the age of 18, then making a Will allows you to name who you would like to look after them when you die. This person will also be responsible for their finances and education. For children over the age of 18, making a Will can ensure that they get the maximum benefit of their inheritance. Additionally, you can choose when they receive their inheritance and how much they get.

In a case where you have stepchildren, or children from a previous relationship, then naming them in your Will can also ensure that they are correctly provided for. The children must be named correctly in your Will, because, if you die without a Will, then they may not receive anything.

If Someone Dies Without Making A Will

In England or Wales, if someone dies without making a valid Will, then the law decides who gets what. If you have no living relatives, then all your property, money and possessions go to the Crown. Also, if you have children under 18, then other people can make decisions about who will take care of them and manage their finances, education and living arrangements until they turn 18.

Younger People Making Wills: How We Can Help

Here at The Inheritance Experts we work with solicitors who have years of experience dealing with all manner of inheritance claims. Contact us by filling in our contact form or by calling us on 01614138763 to speak to one of our friendly knowledgeable advisors.

The Role of the Executor of a Will

One of the most important aspects of a Will is the executor. The executor is responsible for handling your affairs when you die. Their role is important as they have to distribute your estate according to the wishes of your Will.

The role of the executor is to handle your estate when you die. They have many responsibilities. These responsibilities include:

  • Paying all your outstanding debts
  • Notifying banks and utility providers about your death
  • Closing all your accounts
  • Pay inheritance tax
  • Collating your possessions
  • Contacting beneficiaries
  • Distributing your estate

The executor also has to apply for the Grant of Probate before they can do all this. This is to ensure that they have the legal right to do all of the above.

Appointing an Executor

In England and Wales you can appoint anyone you want as an executor. People generally choose family members, friends, solicitors or accountants. When someone dies, it can be a distressing time and emotions can be heightened. This can be a disadvantage of having a family member or friend as an executor. An advantage of choosing a family member or friend is that you can have someone close to you fill out your wishes with more of a personal touch.

There are benefits of using a professional such as a solicitor as your executor. Some of the benefits include: it can reduce family disputes that can arise in inheritance cases, they can diffuse tension between beneficiaries, they have expert advice and knowledge of inheritance cases, and they can deal with paperwork without it impacting them emotionally.

Executor Disputes

If you are concerned that the executor of an estate is not acting correctly, contact The Inheritance Experts. We work with leading solicitors who specialise in handling executor disputes to resolve issues swiftly and fairly.

An Executor has a duty to carry out the wishes of the Testator fairly and without prejudice. Yet there are still instances of appointing an Administrator when there is no will. Accordingly, that administrator is still responsible for legally paying creditors and distributing assets of an estate to the rightful beneficiaries.

There are also times when Executors and Administrators allow their interests to interfere with their legal obligations. For instance, they may:

  • Display prejudice against a rightful heir, or;
  • Handle the estate in a lazy, inept or otherwise corrupt manner.

In contrast, we provide legal advice and guidance to concerned parties. Because it’s our intention to resolve disputes without going to court where possible. Talk to The Inheritance Experts today if you believe an Executor or Administrator is acting in a biased or fraudulent manner.

How We Can Help

Here at The Inheritance Experts we work with solicitors who have years of experience in all manner of inheritance cases. This includes executor services and disputes. Contact us today by filling in our contact form or by calling us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Contesting a Will if a Person Lived Abroad

A common question we get at The Inheritance Experts is ‘can I contest a Will if the person lived abroad?’ The short answer to this is, yes, it is possible. Contesting a Will abroad is possible under certain circumstances. Some of the main circumstances include where the person made their Will, where they lived, and where their estate is.

Contesting a Will of Someone who Lived Abroad

Many people like to move abroad in their retirement. This means that they may not live in the UK when they die. This can be important when contesting a Will, because you may have to go through several countries laws to contest it.

If the estate of the person who died is in the UK, then that puts you in a better position. This is because the Will is only bound by UK law in this case.

The main aspect that the courts take into account when the person lives abroad is their country of domicile. If the person who dies has property in the UK but have relocated to another country, then the Will would take into account the estate in the UK. Therefore that is where the person will be domiciled. This means that you can still contest their Will here in the UK.

For example, if a will is made and, regardless of domicile, The Wills Act 1963 has been complied with, it may be possible to apply English law. This may occur in instances when a person made a will while they were living in England and Wales and can demonstrate a suitably close connection to the country.  If this can’t be proven, then it is likely that the law applicable will be the law of the country in which the deceased was domiciled. 

However, if you are dealing with an Estate that is not in England or Wales, you’ll need to investigate the process in the country in question and go through that country’s specific requirements. If there are assets in more than one country, known as a ‘cross-border Estate’, you’ll need to take extra care. This is because there can be a lot of legal difficulties

Contesting A Will If you Live Abroad

We also commonly get asked if you can contest a Will if you live abroad. The answer to this is also yes. If the person’s Will you are contesting lived in the UK, but you do not, that is perfectly fine. This is because the Will you are contesting only has to go through UK law.

If you live abroad then contacting us is exactly the same. As long as their address was in the UK, then it is the same process.

How We Can Help

Here at The Inheritance Experts, we work with solicitors who have years of experience dealing with all manner of inheritance claims. This includes contesting Wills. Contact us today by filling in our contact form. Or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

A Brief Guide to Mirror Wills

A Brief Guide to Mirror Wills

There are a few different kinds of Will you can make. We recently spoke about trust Wills, and another type of Will you can make is a mirror Will.

A mirror Will is commonly used by married and unmarried couples who have similar wishes about where they want their possessions to be left. They are two separate legal documents that are practically identical in every way. They only differ in the name and possibly the funeral arrangements. However, after a mirror Will has been made, either person can subsequently change or update their Will. This is the same after one of the people has died. There is no legal obligation to keep the original mirror Will.

Advantages of Mirror Wills

There are a number of advantages to mirror Wills. They can be a cost efficient way of making a Will, especially if you and your partner have the same or similar wishes for your estate and possessions. They also allow you to leave all of your estate to your partner or spouse, which makes the Will writing process simpler.

Another advantage of a mirror Will is that, though the Wills are mirrored, each person has their own Will. This means that you can add Trusts to your own Will without affecting the other Will.

Disadvantages of Mirror Wills

The main disadvantage of a mirror Will is that one person may change their Will without the need to change both Wills. This can cause problems with the validity of the mirror Will. It can also cause problems if you die before your partner, as they can then change the Will to leave your assets to someone you did not want to leave them to.

Wills are also invalid if the other person remarries after your death. In this case the surviving partner then has full control of both their own and your assets.

How to Protect Your Own Assets in a Mirror Will

If you wish to protect certain assets in your mirror Will, then you can place certain assets into Trusts. This puts you in more control, especially after you die, as your partner can not leave the assets in the Trust to someone else.

The terms of the trust may allow your partner to benefit from your assets during their lifetime. Then if they die or remarry, your assets in the trust will go to the beneficiaries you choose.

If You Die Without A Will

In England or Wales, if someone dies without making a valid Will, then the law will decide who gets what. If you have no living relatives, then all your property, money and possessions go to the Crown. If you have children under 18, then other people can make decisions about who will take care of them and manage their finances, education and living arrangements until they turn 18.

How We Can Help

Here at The Inheritance Experts, we work with solicitors who have a wealth of experience dealing with Wills. Contact us today by filling in our contact form or by calling us on 01614138763 to speak to one of our friendly knowledgeable advisors.

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