Recent News
David Steed
We are very happy to welcome David Steed to the firm, who will act as a consultant. David has been known to the partners for many years and we are very glad to have the opportunity to have him work with us. David's long experience and contacts together with our, well established, practice and structure will be a winning combination. We are very happy to welcome him here.
We are also very pleased to announce that David Steed, having spent many years of good service on the Mid Surrey Law Society committee, has, deservedly, been elected to the national Law Society Council as one of the two Council members for the Surrey constituency.
We are very pleased that, through David, this firm has a connection with the ‘powers that be’ and we are proud to be able to support him in this venture.
We are sure that he will be an hard working and valuable addition to those already on the Council. We wish him luck. He took office on 14th July for a term of 4 years.
Budget: 22 June 2010
On 22 June 2010 George Osborne delivered his first Budget under the new coalition government. Here is a summary of what we believe our website’s users may find of interest:
- Value Added Tax: In our opinion this is probably the most significant change, with an increase to 20% from 4 January 2011.
- Capital Gains Tax: This will increase to 28% for higher-rate taxpayers with immediate effect.
- Income Tax: The personal allowance will increase to £7,475 from April 2011.
- Inheritance Tax: This remains at £325,000 subject to the previous ability to “double-up” the threshold by using a previous spouses’ allowance. See below.
- Home Information Packs: Although not strictly part of the Budget, we felt it was important to mention that the need for a seller to obtain a Home Information Pack (HIP) prior to the marketing of his or her property has been suspended with immediate effect from 21 May 2010. See below.
Mary Burrell
Tracy and Malcolm are very sorry that Mary Burrell has retired after 16 years with the firm.
Mary, in recent years referred internally, by almost everyone, as ‘the ferret’ (the origin is not clear, is it a reference to her persistence or to her diminutive, but attractive, stature?), has supported Tracy variously with her matrimonial and conveyancing practice.
Qualified, whilst here, as a Legal Assistant, by the College of law, she was adept at all things conveyancing and most things matrimonial, allowing Tracy long lunches and a generally simple life!
A confidant to both the partners, when required, her personnel skills, hard work and general ‘good egg’ demeanour will be missed by all, but particularly Tracy.
Janet Ball
Janet left Harold Bell & Co at Christmas after more than 15 years as our receptionist. Janet is, and will be, sorely missed. Her organisational skills and systems will leave a long term legacy. Who will we tease now she is not here? She will have to come back often. Good luck Janet and keep in touch!
St Raphael's Will Week
For a number of years we have assisted St. Raphael’s Hospice, (local and very worthwhile and under-funded), by doing a Wills week.
This year, between the 9th and 20th May, we again agreed to draft wills for clients both new and old at no cost, in return for a donation to the hospice. We are currently awaiting confirmation as to how how much we managed to raise for this very worthy cause. Watch this space!
Inheritance Tax
On 9 October 2007 the previous Chancellor, Alistair Darling, as part of his Pre-Budget Report and Comprehensive Spending Review, introduced a number of changes to the rates and method in which various taxes are charged. We have listed the changes which we believe will be of main interest to our clients, namely Inheritance Tax and Capital Gains Tax.
Before the Pre-Budget Report any individual was entitled to a £300,000 allowance (Nil Rate Band) on his or her death. This has since been increased to £325,000 in April 2009. This meant that assets below the Nil Rate Band were taxed at 0% and everything exceeding £325,000 was taxed at 40%. Anything passing between spouses or civil partners on death was covered by spouse/civil partnership exemption and hence no Inheritance Tax was payable. What this generally meant was, where the first spouse died leaving everything to the other spouse and the surviving spouse later died, their estate would consist of the amalgamated assets but would still only be entitled to the £325,000 allowance.
Couples therefore needed to take advantage of the £325,000 allowance on the first person’s death so as to ensure that the surviving spouse’s estate was either kept below the threshold or alternatively was significantly reduced to reduce the amount of Inheritance Tax on their death. This generally involved the drafting of a Nil Rate Band Discretionary trust or an absolute gift of the half share of the property (having first transferred their property into Tenants in Common).
Following the Pre-Budget Report the above planning is not so necessary. The Chancellor introduced a method of “transferring” the Nil Rate Band from spouse to spouse or civil partner to civil partner. What this now means is if a spouse or civil partner dies leaving everything to their spouse/civil partner then on the surviving person’s death they are entitled to a £650,000 Nil Rate Band. However, this allowance is only for spouses and civil partners and not co-habitees. This allowance is only applied if the surviving spouse/civil partner dies after the 9 October 2007. It is, however, applied retrospectively so that if the first spouse/civil partner died before this date the new Nil Rate Band would apply.
This"new" regime will assist most couples to avoid Inheritance Tax and to ensure that their beneficiaries receive their maximum entitlement but this may not always be the case and our staff will gladly advise you of other methods to ensure your estate is tax efficient.
Home Information Packs (HIPs)
Prior to 21 May 2010, under measures brought in by the Labour government, it was an offence to “market” your property without a HIP. As from this date, the new coalition Government announced the suspension of Home Information Packs with immediate effect. The Energy Performance Certificate (EPC) will still be necessary. Sellers will still be required to commission, but won't need to have received an EPC before marketing their property.
Stamp Duty Land Tax (SDLT)
Whilst not recent news, Stamp Duty was replaced by SDLT some years ago. The effect of SDLT however is wide ranging. As a tax on transactions, rather than documents, clients and solicitors must be aware that any transaction might be viewed in conjunction with another which could subsequently give rise to SDLT (for instance marriage might make a previous unconnected transaction, connected). Any transaction, however simple it may seem, always needs to be given serious thought. Leases and rent, particularly in commercial matters, are particularly at risk.
There is sometimes a misunderstanding about the amount of SDLT on domestic properties.
Up to £125,000 you pay no SDLT on the purchase price.**
From £125,001 to £250,000 you pay 1% SDLT on the whole purchase price.
From £250,001 to £500,000 you pay 3% SDLT on the whole purchase price.
From £500,001 to £1,000,000 you pay 4% SDLT on the whole purchase price.
From £1,000,001 you pay 5% SDLT on the whole purchase price (this new bracket is valid from 1 January 2011)
** For first time buyers this threshold is increased to £250,000
Please note that between 3 September 2008 and 31 December 2009 the starting threshold for SDLT was £175,000. The threshold was reduced back to £125,000 from 1 January 2010.
If the property is leasehold and rent is payable, there may be SDLT on the rent as well, even if there is none on the purchase price.
For further information please see the web site of HMRC: www.hmrc.gov.uk/so/index.htm
Lasting Powers of Attorney
On 1 October 2007 Lasting Powers of Attorney replaced Enduring Powers of Attorney. A person given power or who has drawn up an Enduring Power of Attorney before 1 October 2007 can still use it and the attorney can still apply to have it registered in the usual fashion. This person has a duty to apply to register the Enduring Power of Attorney as soon as they believe that the donor is becoming or has become mentally incapable of managing their affairs.
The Lasting Power of Attorney is a legal document that lets you appoint someone you trust as an ‘attorney’ to make decisions on your behalf. It can be drawn up at any time while you have the mental capacity, but, unlike the Enduring Power of Attorney, cannot be used by your attorneys until it is registered with the Office of the Public Guardian.
A registered Lasting Power of Attorney can be used at any time, irrespective of whether you have the mental capacity to act for yourself or not.
There are two types of Lasting Powers of Attorney: 1. Property and Affairs Lasting Power of Attorney: This is similar to the previous Enduring Power of Attorney in that, as the name suggest, it covers your property and finances. 2. Personal Welfare Lasting Power of Attorney: This allows you to make decisions regarding the type of treatment you consent to when you do not have the mental capacity to do so and can include such things as life-sustaining treatment etc.
The Lasting Power of Attorney forms are substantially longer than the previous Enduring Power of Attorney forms but our staff will be happy to advise you of the key differences.