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Issue 22 – October 2007

Contents

Cases
Statutory instruments
Features
Articles

News

Events

Discounts (how to book and claim discounts)

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Cases

1. Personal representatives of Glowacki (deceased) v Revenue and Customs Commissioners

Court: Special Commissioners
Judge: Malcolm Gammie
Hearing date: 21 August 2007
Summary: inheritance tax—deed of variation—variation purporting to take effect as a gift by the deceased before death—whether within section 142 IHTA 1984 and an exempt transfer under section 17

A woman (G) died in 2004. Under her will, she left most of her estate to her husband. He died three months later. G’s personal representatives purported to execute a deed of variation giving most of her estate (including her house) to her sister and the remainder to her nieces and nephew. HM Revenue and Customs issued a notice of determination, accepting that the deed was effective but holding that its effect was that the benefit of the nil rate of IHT was to be set first against G’s house rather than against the pecuniary legacies. The personal representatives appealed, contending that the deed should be construed as meaning that the house was excluded from IHT and that the nil rate band was available to be set against the pecuniary legacies. The Special Commissioner reviewed the evidence in detail and rejected this contention, holding that the first part of the deed of variation was ineffective. The commissioner held that IHTA, s 142 ‘cannot operate to remove property from a person’s estate so that it is no longer part of the estate subject to the deemed transfer of value on death under s 4. What s 142 must vary is the destination of the estate on its deemed transfer under s 4.’ In this case, the deed had purported ‘to negate any disposition of the house as part of (G’s) estate immediately before her death by pretending that she had transferred it immediately before the deemed s 4 transfer of value’. However, ‘nothing in s 142 suggests that the variation that it permits should be other than a variation of the disposition on death effected by the deceased as part of the deemed transfer under s 4 immediately before the death’. The commissioner also held that HMRC's notice of determination had been issued on an incorrect basis, observing that HMRC appeared ‘to have put the cart before the horse in terms of claiming to give effect to the deed and then considering its tax consequences’. The commissioner concluded that ‘the “variation” purported to be made by clause 1 of the deed was not a variation capable of taking effect under s 142 and, as a result of the proviso, did not therefore take effect at all’.

Introduction

Mrs Melinda Jane Wells and Mrs Carol Anne Minash (the Appellants), in their capacity as the personal representatives of Mrs Gwendoline Enid Glowacki (deceased) appeal against a determination under section 221 Inheritance Tax Act 1984 dated 21 November 2005. Mrs Glowacki died on 21 March 2004 and the determination relates to a deed of variation made on 23 December 2004 by the appellants, Mrs Barbara Joan McElney and Christopher Matthew Leverne Johnson.

Under the determination the respondents have determined that the effect of the deed, having regard to the provisions of section 142 of the Inheritance Tax Act 1984 (“the Act”), is that the benefit of the nil rate band of inheritance tax is to be set first against the value of 6 Moore Walk, Myton Grange, Warwick in priority to the legacy referred to in clause 2(3) of the deed when computing the inheritance tax payable on Mrs Glowacki’s death.

Facts

By her will dated 9 February 2001, Mrs Glowacki left her estate to her husband, Tadeusz Marian Glowacki after payment of a pecuniary legacy to her sister, Mrs McElney. She specified, however, that if her gift to Mr Glowacki were to fail different provisions should apply. In particular, the house should go to Mrs McElney and the balance of her estate, after payment of debts and expenses, should be divided equally with one half going to Mrs McElney and the other half going to the appellants (her nieces) and Mr Johnson (her nephew).

Mr Glowacki was nearly 90 years old when Mrs Glowacki died and only survived her by a short period, dying on 21 June 2004. Under his will (also of 9 February 2001), Mr Glowacki left his estate (after payment of a number of pecuniary legacies) to his wife but, in the event of that gift failing (as it did), he devised the house to Mrs McElney and divided the balance of his estate as his wife had done.

The deed recited that, given her husband’s state of health, Mrs Glowacki had been considering at the time of her death making arrangements to transfer the house to Mrs McElney and amending her will to make provision for the appellants and Mr Johnson. The deed then provided under clause 1 that: “In respect of the house there shall be such variation of Gwen’s disposition of it as will have effect under the said sections 142 [Inheritance Tax Act 1984] and 62(6) [Taxation of Chargeable Gains Act 1992] as if Gwen in her lifetime and immediately before the transfer deemed to have been made by her under section 4 of the Inheritance Tax Act 1984 had transferred the House to Barbara for her (Barbara’s) own use and benefit absolutely.”

Clause 2 of the deed then provided that: “Gwen’s dispositions of property by her said Will are hereby varied and her will shall have effect and be deemed always to have had effect as if:
(1)  the absolute beneficial ownership of and interest in the house is not disposed of by Gwen in her will.
(2)  Gwen’s will had included a direction to her executors to do whatever might be necessary or expedient for the formal vesting in Barbara of the title to the house (on the footing that the absolute beneficial ownership of and interest in the house had been transferred by Gwen to Barbara as provided in clause 1 hereof).
(3)  Gwen had included in her will immediately after clause 3 thereof an additional clause 3A in the following terms: ‘3A I also give two hundred and thirty thousand pounds (£230,000) to [the appellants and Mr Johnson] … to be divided between then in equal shares’ and so that the variation of Gwen’s dispositions in this present clause shall have effect under the said sections 142 and 62(6) as if effected by Gwen”.

Mrs McElney, the appellants and Mr Johnson agreed that section 142(1) of the Act was to apply to the deed’s variation of Gwen’s dispositions as if those variations had been effected by Gwen herself, subject to the proviso that: “…if the effectiveness of the variations in clause 1 of this deed is challenged by or on behalf of the commissioners for HMRC and either:

(1) Barbara [the appellants and Mr Johnson] after taking such advice as they may think fit decide not to contest (or at any time decide not to continue contesting) that challenge by appeal or otherwise and whether before or after the commencement of any court proceedings or
(2) the result of any such appeal or proceedings is in favour of the HMRC challenge and such challenge is upheld – then and in either such event the variations in clause 1 and sub-clauses (1) and (2) of clause 2 of this deed shall be deemed to be and always to have been without effect save and except that as Barbara [the appellants and Mr Johnson] hereby agree and direct all costs and expenses incurred in or in connection with such variations and any such challenge shall be treated as properly incurred and paid out of Gwen’s estate”.

The appellants contend that the effect of the deed is to exclude the house from inheritance tax on Mrs Glowacki’s death. The respondents, as appears from their determination, contend that the house remains chargeable to inheritance tax in accordance with section 4(1) of the Act and that the effect of the deed is to set the benefit of the nil rate band of tax first against the value of the House in priority to the legacy referred to in the deed.

Judge’s decision

The property in respect of which section 142 can operate is “the property comprised in [the deceased’s] estate immediately before his death”. This reflects the provisions of s4 of the Act under which the deceased is deemed to have made a transfer of value immediately before his death equal to the value of his estate at that time. Under s5 a person’s estate is the aggregate of all the property to which he is beneficially entitled.

The words in parenthesis in s142, “whether effected by will, under the law relating to intestacy or otherwise”, clearly reflect the fact that property comprised in a person’s estate immediately before his death may devolve in a variety of ways on his death, depending upon the nature of the property and whether it devolves through an act of the deceased or by operation of law. Those words therefore clarify that however the property in question may have devolved on death, it is open to those persons who benefit from the disposition to vary the way in which the property devolves as a result of the person’s death.

What section 142(1)(a) contemplates is a change in the way in which property that the deceased beneficially owned immediately before his death devolves as compared with how it would otherwise devolve as a result of the person’s death. That is “the variation”. The Act has to apply “as if” the variation had been effected by the deceased because tax is to be charged by reference to the deceased’s death on the basis that the deceased’s property devolves on the varied basis and not as actually occurred on death.

It seems to me that a natural corollary of this is that any variation must reflect a change in the actual disposition of a person’s estate that could have occurred at the time of the deemed transfer of value under s4. The deceased is deemed to have made a transfer of value of his whole estate immediately before his death and under s142 those who benefit as a result of that deemed transfer are entitled to vary the dispositions that the deceased has made under that deemed transfer of value as a result of his death.

In my view s142 cannot operate to remove property from a person’s estate so that it is no longer part of the estate subject to the deemed transfer of value on death under s4. What s142 must vary is the destination of the estate on its deemed transfer under s4. It may be that particular variations allow property to devolve in a way that will benefit from exemptions and reliefs not otherwise taken advantage of (as was the family’s intention in Russell) and so operate to reduce the tax payable on the death. The disposition in question, however, relates to “property comprised in [the deceased’s] estate” and I do not think that supposedly removing property from the estate and the deemed transfer under s4 (in contrast to changing the way in which the property devolves as part of that deemed transfer) amounts to a variation in the disposition of the property comprised in the estate within the meaning of s142.

It is correct, as Mr Price submitted, that Russell v IRC does not answer the question posed in this case. Knox J’s acceptance, however, that the words “or otherwise” must be construed as limited to dispositions, whether by acts of parties or operation of law, which take effect on the death of the deceased is at least consistent with the point that I have just made. It is true that the words in parenthesis refer to the disposition that falls to be varied, which must necessarily be one taking effect on death. Nevertheless, that is the disposition that falls to be varied and in my view variation in this context does not include substituting a disposition that purportedly takes effect otherwise than on death.

In this respect, what clause 1 of the deed purports to do is to negate any disposition of the house as part of Mrs Glowacki’s estate immediately before her death by pretending that she had transferred it immediately before the deemed s4 transfer of value. But if s142 can deem the deceased to transfer property in the scintilla of time immediately before deemed transfer immediately before death, why not at some earlier time or in some other circumstances? In my view nothing in s142 suggests that the variation it permits should be other than a variation of the disposition on death effected by the deceased as part of the deemed transfer under s4 immediately before death.

I therefore think that “the variation” to which both s142 and s17 are referring is a change in the way in which property that the deceased beneficially owned immediately before her death devolves on death as compared with how it would otherwise devolve as a result of the person’s death. Section 142 deems that variation to have been effected by the deceased to enable tax to be charged as a result of her death. Under s17(a) the variation itself may not be a transfer of value but the deemed transfer of value on her death (as varied) is such a transfer.

This reinforces my view that s142 does not operate in the manner in which the appellants contend. Section 142 treats the deceased as having disposed of her estate immediately before death in the varied manner but the deceased’s transfer is the transfer on death under s4, not the variation itself. By contrast, the variation would be a transfer of value by those persons who would benefit under the original disposition of the deceased’s estate on her death. It is that transfer of value that s17(a) exempts. This is not to confuse the written instrument (that is, the deed) with the variation but to recognise the Janus-like character of the variation in this context.

To this extent I am in agreement with Mr Ryder but I am unable to follow his reasoning as to what follows from this construction of the statutory provisions vis-à-vis the deed itself and then into s7 of the Act. In the light of my construction I would regard clause 1 of the deed as ineffective, providing as it does that, “there shall be such variation of Gwen’s disposition as will have effect under the said sections 142 and 62(6) …”. As I have sought to explain, s142 does not in my view have effect in the manner sought to be achieved by clause 1 because what that clause purports to do does not amount to a variation within the section. The proviso indicates that what the parties to the deed had in mind is that if clause 1 were ineffective to achieve the tax result that they intended – to remove the house from Mrs Glowacki’s estate altogether – then clause 1 (and sub-clauses (1) and (2) of clause 2) “shall be deemed to be and always to have been without effect” where an appeal is in favour of HMRC’s challenge.

It is true that the respondents have conceded that the deed is effective to dispose of the house to Mrs McElney. It is apparent from their submissions, however, that this is a qualified concession and one that does not appear consistent with the deed. As I have noted, Mr Price’s objections to what the respondents really mean by their concession seems to me to have some force. I also find it difficult to ignore the terms of clause 1 in considering the basic liability to tax but then to give effect to it in applying s7 of the Act as the respondents contend.

The respondents seem to have put the cart before the horse in terms of claiming to give effect to the deed and then considering its tax consequences when in my view the deed should be approached from the other direction. The variation in clause 1 of the deed was predicated on the basis that it had a certain tax effect that has always been denied by the respondents. If it did not have the effect intended by and contended for by the appellants, the variation was to be of no effect. The correct approach, as it seems to me, therefore, is to determine whether s142 contemplates a variation of this character and to give effect to the deed in the light of that.

Conclusion

I therefore find that I agree with the respondents’ construction of s142 and s17(a) but, having so concluded, I am unable to agree with their supposed concession that the deed takes effect to dispose of the house to Mrs McElney. It seems to me that the variation under clauses 1 and 2(1) and (2) fails. It follows from this that I must set aside the respondents’ direction.

In principle I find that the “variation” purported to be made by clause 1 of the deed was not a variation capable of taking effect under s142 and, as a result of the proviso, did not therefore take effect at all. The tax is therefore to be calculated on the basis of the dispositions made under the will as varied by clause 2(3) of the deed.

Given that I had reached a different conclusion from that directly contended for by either party, I issued a draft decision to the parties and directed that they were at liberty to make further submissions (1) on the effect of the deed in the light of my construction of the relevant legislation and (2) on the direction that I should make as a result.

Initially the appellants’ further written submissions sought to persuade me that my construction of s142 and s17(a), in particular the view that I had expressed in paragraph 36 above as to what it is the instrument must do if it is to vary the dispositions on death within the meaning of section 142(1)(a), was wrong. I indicated, however, that my direction did not allow either party to re-open the interpretative issues that had already been fully argued before me.

As regards the effect of the deed neither party sought to disagree with my conclusion at paragraph 45 above. In relation to the direction that I should make as a result, s224(5) of the Act allows me to vary or quash the determination given that I am unable to confirm it. The respondents recognised that I could adopt either course but proposed no variation and accepted that I might feel bound just to quash their determination. The appellants submitted that varying the determination would not be appropriate in the circumstances and that I should therefore quash the determination. I am not certain that this is an entirely satisfactory outcome, given that I have found against the construction of the statute argued for by the appellants but I am nevertheless quashing the respondent’s determination. It is, however, the course that I think I must follow and accordingly I confirm my decision in paragraph 44 above to quash the determination. The next step may presumably be a further determination based on my conclusion, which one hopes is not then subject to further appeal.

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Statutory Instruments

1. Court Funds (Amendment No 2) Rules 2007

Official number: SI 2007/2617
Commencement: 1 October 2007
Summary: Contains amendments to the Court Funds Rules 1987 consequential on the coming into force of the Mental Capacity Act 2005.

In addition, the Court Funds Rules are amended as follows.

  • The definition of "Employment Appeal Tribunal" is amended to correct an obsolete statutory reference.
  • Rule 9 is revoked on the basis that practice is now to pay costs out of a fund in court on receipt of a payment schedule, as opposed to a certificate from a Master or costs officer as provided for in Rule 9 as originally enacted.
  • Rules 40 and 44 are amended (with consequential additions and amendments to the definitions in rule 2(2)) to permit the Accountant General to make payments to bank accounts held outside the UK by international money transfer on receipt of a request for payment.
  • A new rule 43A is inserted to permit the Accountant General to make a payment direct to funeral directors to cover funeral expenses of a person in respect of whom a deputy or receiver had been appointed where a grant of probate or administration has not yet been obtained, provided that there are sufficient funds in court to cover the payment.
  • A new rule 43B is inserted to permit the Accountant General to make payments to HM Revenue and Customs (as part of the scheme for direct payment of inheritance tax) to pay all or part of the inheritance tax due on the estate of a person who was entitled to a fund in court and in respect of whom a deputy or receiver was appointed.
  • Rule 57 is amended to remove the requirement for an account to be open for 10 years before the Accountant General can transfer the funds in that account to an account of unclaimed balances. An account can now be moved to unclaimed balances if there has been no activity (other than crediting interest or dividends, or the proceeds of the sale of securities) on the account for 10 years or the Accountant General is satisfied that the person cannot be traced.
  • In respect of accounts held for children, the 10 year period does not start to run until the child's 18th birthday or, if the child's date of birth is not known, until the 18th anniversary of the opening of the account.

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2. The Lasting Powers of Attorney, Enduring Powers of Attorney and Public Guardian Regulations

Official number: SI 2007/2161
Commencement: 1 October 2007
Summary: Amend SI 2007/1253, which sets out the requirements necessary for the making and registration of Lasting Powers of Attorney (LPAs) as specified in the Mental Capacity Act 2005, section 9. Regulation 14 deals with objections to the registration of an LPA and giving notice of an objection to the Public Guardian. Regulation 14, as currently drafted, assumes that all objections are made on the grounds set out in paragraph 13(1) of Schedule 1 to the Act and prescribes an objection period of five weeks. These regulations clarify the situation by disapplying regulation 14 to objections made by the donor of an LPA and inserting regulation 14A, which deals solely with donor objections to registration. This ensures that the original intention is fulfilled, namely that donors have five weeks to make an objection on any ground to the registration of their LPA.
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Features

1. Initial payment of IHT on delivery of form IHT200 – new procedure

Issuing department: HM Revenue and Customs
Issue date: 17 September 2007

On 5 November 2007, we will be changing the process for making the initial payment of inheritance tax (IHT) when payment is made by cheque. From 5 November, you will need to send your cheque with a bank approved payslip carrying an IHT reference to our cashiers in Nottingham. This means that you will need to contact us to obtain an IHT reference and the payslip before submitting form IHT200. You should also use this new process to obtain a reference number before using the Direct Payment Scheme.

We are making this change for two reasons; firstly in advance of IHT payments moving from Nottingham to HM Revenue and Customs (HMRC) accounts office at Shipley (see our August 2006 newsletter www.hmrc.gov.uk/cto/august2006.pdf) and secondly to improve security around the process of registering IHT taxpayers before an account is delivered.

Q: How do I contact you to obtain a reference and payslip?

You will need to apply in writing for a reference number for any case where there is tax to pay on delivery of form IHT200. There will be two options. You can apply:

  • online through the HMRC website; or
  • by post, using form D21.

If you use the online option, you will receive an email acknowledgement that we have received your request. This facility is purely for the issue of references, and we cannot enter into further email correspondence by this route.

Q: What happens next?

We will allocate a reference to the estate and send details of the reference together with a payslip and a preaddressed envelope to you by post. We will aim to reply to all requests for a reference within five working days for online requests and within 15 working days for postal requests.

Q: What should I do when I am ready to deliver form IHT200?

First, please write the IHT reference number in the top righthand corner of form IHT200. Then, if you are paying the tax by cheque, fill in the payslip and put the payslip and cheque (and nothing else) in the preaddressed envelope. Please do not fold the cheque or payslip or use staples or paperclips. Send your payment to our cashiers at Nottingham and send form IHT200 and supporting papers to either our Nottingham or Edinburgh office – depending on whether you will be applying for probate or confirmation.

Q: What about paying tax using the Direct Payment Scheme or from funds with national savings?

If you are paying the tax using either of these sources, you should apply for a reference by using this new route, but otherwise follow the existing process.

Q: How far in advance should I apply for an IHT reference number?

The sooner the better; but we suggest – as a minimum – three weeks before you expect to be delivering form IHT200.

Q: When will the online option be available?

The online option will be available on the HMRC website from 22 October. If you anticipate delivering form IHT200 before 5 November, you should continue to use the current process; if after 5 November, you will be able to apply for an IHT reference and payslip online from 22 October.

Q: How do I get to the online option on the HMRC website?

From 22 October you will be able to use the “Do it online” link on the sidebar of the IHT homepage at www.hmrc.gov.uk/cto/iht.htm.

Q: How can I get form D21?

You can download form D21 from the HMRC website, or obtain a paper copy from our Forms Orderline on 0845 30 20 900; option 1.

Q: What about capital transfer tax and estate duty deaths?

Please follow exactly the same process if you need to make an initial payment of tax/duty for a death prior to 18 March 1986.

Q: Do I need a reference when there is no tax to pay, but an IHT200 is still required?

No – there is no need to apply for a reference when there is no tax to pay; simply send the completed form IHT200 and/or other documents to us in the normal way.
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2. Deceased taxpayers and penalties

Issuing department: HM Revenue and Customs (HMRC)
Issue date: 10 September 2007

Where a person who had incurred a penalty died, S100A(1) TMA 1970 allowed HMRC to charge the penalty on the personal representatives of the deceased. HMRC now accepts that S100A(1) was incompatible with article 6 of the Human Rights Act 1998. Finance Act 2007, schedule 24, paragraph 29(b) repealed S100A(1).

In view of the uncertainty surrounding penalties sought under S100A(1), an undertaking was given to those personal representatives who offered to pay penalties. This was given in a letter that accompanied HMRC's acceptance of their offer to pay. It stated the amount paid in respect of penalties would be repaid should the department or the courts decide penalties arising from the default of a deceased taxpayer should not be imposed on the deceased's personal representative.

HMRC has written to those personal representatives who were sent this letter advising them repayment will be made. If your client(s) have entered into a settlement where the letter was issued and you have not been contacted please advise:

Pauline Howell
HM Revenue and Customs
Central Policy
Tax Administration Advice
7th Floor
Wellesley House
Wellington Road North
Stockport
SK4 1EZ
Tel: 0161 475 2715
Email: pauline.howell@hmrc.gsi.gov.uk
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3. Standard Life advises that gift records have never been more important

Issuing department: Standard Life
Issue date: 30 August 2007

HM Revenue and Customs (HMRC) will be watching more carefully for lifetime gifts, according to their latest IHT & Trusts Newsletter. The newsletter, which came out on 20 August 2007, contains an item about investigations arising on death which will look at lifetime gifts.

From now until 31 March 2008, there will be more scrutiny of lifetime gifts as reported at death. The form used to report lifetime gifts is called the D3 form and this is completed and submitted by executors of the deceased along with the main paperwork, normally within six months of death (form IHT200).

The main types of lifetime gifts, made within seven years of death, which require reporting include:

  • potentially exempt transfers (PETs) for example an outright gift of cash;
  • chargeable transfers (CTs) for example a gift to certain types of trust.

Commenting on the announcement by HMRC, Julie Hutchison, estate planning specialist at Standard Life Assurance Limited, said: "Executors will have to pay particular attention to the checks made about lifetime gifts. The ideal situation is for a person to have kept a note of any gifts made and stored this information with their will. To help with this increasingly important area of record-keeping, Standard Life recently launched a Gift Record as part of its Estate Planning Solutions Pack. This can be used by individuals and their advisers to record lifetime gifts and can be stored safely for future reference."

The HMRC newsletter gives some examples of the types of gifts for which they watch in particular. One example given is of a loan that is forgiven. In theory, a loan is an asset of the estate at date of death. If a loan is cancelled, or "forgiven", that is normally a lifetime gift for inheritance tax (IHT), and the seven-year clock starts before it falls out of account. In research from Standard Life Bank, 57 per cent of parents had helped their children onto the property ladder as firsttime buyers with either a gift or a loan.

If the person submitting the forms has been negligent in their completion of forms, HMRC will consider whether a penalty is appropriate.
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Articles

1. Good will drafting

Journal: New Law Journal
Author: Nicholas Acomb
Citation: 157 NLJ 1289
Issue date: 21 September 2007
Summary: For the past 20–30 years, lawyers have become familiar with the four main types of trust that typically arise in wills: accumulation and maintenance (A&M) trusts, trusts with an interest in possession (life interest trusts), trusts without an interest in possession (discretionary trusts) and bare trusts (not really a trust at all and treated as an outright gift). The main purpose of the Finance Act 2006 (FA 2006) is to treat all trusts as falling within the inheritance tax (IHT) regime that previously only existed for discretionary trusts – so that they incur 10-year anniversary charges and exit charges – subject to a number of important exceptions in relation to trusts arising in wills. The previous distinction between the trusts and their IHT status was relatively straightforward. Under FA 2006, the concept of A&M trusts has been abolished, and there is no longer a simple distinction between trusts with an interest in possession and trusts without. The status of bare trusts remains unchanged, but new trust concepts have been added.
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2. Last wishes

Journal: New Law Journal
Author: Penelope Burton and Julian Washington
Citation: 157 NLJ 1302
Issue date: 21 September 2007
Summary: The law lays down strict rules about what happens to a person's estate if he or she dies without a will, and these rules depend on the deceased's circumstances. The intestacy rules apply in an arbitrary manner, particularly where a client does not have children. Unmarried partners and same sex partners who have not registered a civil partnership can not inherit from each other unless there is a will. Children automatically become entitled to their inheritance at the age of 18 under the intestacy rules. Although it is possible to make a do-it-yourself will, clients should be warned to avoid this.
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3. Funding probate

Journal: New Law Journal
Author: Nick Sanders
Citation: 157 NLJ 1304
Issue date: 21 September 2007
Summary: With the onset of the Legal Services Bill and greater competition in the market, firms will have to look at their financial structure and specifically how they fund probate cases. The number of estates in the UK paying inheritance tax rose by 72 per cent in the five years up to 2004 and is forecasted to increase by a further 22 per cent in 2007. While the threshold for inheritance tax has risen by 85 per cent since 1996, the housing market has grown by 179 per cent in the same period, and you would be mistaken to think that only the super-rich pay inheritance tax. Around 40,000 estates are expected to be liable to pay inheritance tax in 2007, amounting to £4 billion in tax revenues for the government.
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4. IHT chargeable transfers and IHT accounts from trustees

Journal: Trusts & Estates
Author: Richard Williams
Citation: T&E 21 8 (5)
Issue date: 01 September 2007

Discusses how HMRC proposes to introduce new regulations that will excuse trustees from delivering an account in respect of a chargeable event where there is no liability to tax, provided the trust meets a number of conditions. It seems fair to question why it is necessary that the settlor should have to remain domiciled in the UK throughout the life of the settlement. It is not explained why it is necessary that the “cash limit” should be only 70 per cent of the nil rate band.

Please note subscribers can go to LexisNexis Butterworths for further details about all the above articles. Non-subscribers can sign up for a free trial of the online service.

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Books

1. How to book and claim discounts
  • Law Society Publishing: quote “Probate Section” to receive a 20 per cent discount off related titles (excluding directories) via Prolog at The Law Society, PO Box 99, Sudbury Suffolk CO10 2SN, telephone 0870 850 1422, fax 01787 313 995 or email lawsociety@prolog.uk.com.
  • LexisNexis Butterworths: quote “Law Society Section discount offer” when ordering via www.lexisnexis.co.uk, customer.services@lexisnexis.co.uk or 020 8662 2000.

This e-alert is not intended to provide comprehensive records of information concerning the probate sector. If you have any feedback or suggestions, please email probatesection@lawsociety.org.uk. This e-alert was created in conjunction with LexisNexis UK Legal Updater Service. For further information about any of the articles, please contact sabina.smith@lexisnexis.co.uk. The views expressed by the Legal Analysis interviewees are not necessarily those of the proprietor.
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