Uncertainty abounds for anybody considering how to pass on their wealth to the next generation. Dramatic increases to fees in obtaining a grant of probate were being introduced in May, but could not be finalised before parliament was dissolved for the June snap election.
The threshold below which no fee is payable was to be raised to £50,000 (from £5,000), but higher value estates faced fee increases of between 93.5% for estates up to £300,000, and 12,803% for estates over £2million, from the current flat fee of £155. These increases could still be resurrected or different changes put into place.
The new inheritance tax allowance for residential property, which came into effect in April this year, will hopefully enjoy a longer life than might have been the case under a Labour or coalition government. This change introduced an additional tax-free allowance of up to £100,000 (rising to £175,000 by the 2020-21 tax year), and applies to residential property left by parents to their children or remoter descendants, whereas both the Labour party and the Liberal Democrats referred to reversing inheritance tax ‘give-aways’ in their election manifestos.
Wilkin Chapman’s specialist lawyers can help you prepare for uncertainty with confidence. We recommend:
Making sure your Will is up to date. If your estate is likely to be taxable, using a discretionary trust structure may be advisable, to ensure your executors have flexibility to take account of your beneficiaries’ changing circumstances and the changing tax landscape.
With the agricultural sector having a higher accident rate than many other industries, putting Lasting Powers of Attorney in place to avoid the difficulties which arise if you lose capacity as a result of illness or accident is not just something to think about when you retire.
If you require more information in relation to Wills or Lasting Powers of Attorney, please contact a member of our private client team.