Archive for the ‘Uncategorized’ Category

Understanding the Residential Nil Rate Band

Posted by Janay Harris

The Residential Nil Rate Band – RNRB – can be quite complicated. However, if you can get a good understanding of it, you’ll be saving yourself a whole lot in inheritance tax. Since when it came into effect in April 6th2017, any deaths after this date can claim the £325,000 rate band. Currently the RNRB is set at £125,000 per person with an expected annual increase of £25,000 every April until when it reaches £175,000. After this figure, it will increase annually in line with inflation.

To benefit from RNRB, you have to possess a Qualifying Residential Interest. A QRI means ownership of a property of a deceased. The residence must have been lived in by the deceased at a point. A Buy to let property does not qualify for the RNRB, only a place the deceased must have lived in. In the event of multiple properties, the executors will settle for which will be the QRI. However, the prevailing value of a house will determine the QRI entitled to.

Another important condition to benefit from QRI is to be ‘related’. The direct descendants, who can either be the deceased’s adopted, biological, fostered or even stepchildren – this may include the grandchildren also. Other descendants include spouses of those children and grandchildren; the widows, widowers or other civil partners of the deceased who are unmarried at the time of death.

RNRB is intended to help the middle class in England and those who are not wealthy. There will also be traps that will surface now or later due to the objectives of RNRB.

For more information or to discuss your needs, please call John Ireland now

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Why UK Parents Are Scared Of Divorce

Posted by Janay Harris

Divorce and separation have been on the rise. However, there is bound to be a slow down in the rate of divorce as couples are trying to avoid the complexities surrounding how wealth would be distributed when their spouse remarries. Complexities due to inheritance have increased the number of issues that ends up in court. To avoid this imbroglio, couples are relying on Trusts arrangements to ensure their children gets what belongs to them after their demise.

What is a Trust and How Does It Work?

Simply put, a Trust is a ring fence that around how wealth should be disbursed and shared in the future. As a parent, the most effective way to ensure safe landing is to set up a Trust. With a Trust in place, it doesn’t matter if any of the surviving spouses remarries, the inheritance is still maintained and the stated distribution pattern in preserved. There is an increasing interest in couples considering Trust as a means of safeguarding their assets. Which makes Trust planning a sought after need in the UK, this is despite the posture of the government to Trust taxation.

Position of UK on Trusts

There have been calls for the government to reconsider its stance on Trust planning as it readily fits the modern-day need. Trusts aren’t new, what is new is the renewed interest by people all over the UK. Trusts are having a renaissance and people have to pressure the government to provide a structure for policy formulation towards it.


For more information or to discuss your needs, please call John Ireland now

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What Could Happen If I don’t Secure A Power Of Attorney

Posted by Janay Harris

It’s very unfortunate that people only realise that they should have put a Lasting Power Of Attorney agreement in place when it is too late. In essence, a Lasting Power Of Attorney enables family members and close friends that you trust to make decisions on your behalf, so if you do not legally give them the capability to do so, these decisions will then be made by others.

Your loved ones may or may not have a say, but Lasting Power Of Attorney will grant them permission to actively suggest and carry out tasks for you, in the way you would have wished.

In addition, whilst you plan your future, it is essential to think of Estate Planning, to ensure your affairs will be looked after efficiently. In particular when it comes to mitigating inheritance tax that may be due.

If you are looking for different ways to protect your assets, then you should look at putting your property in a trust. These are the most popular types:

For more information or to discuss your needs, please call John Ireland now

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Protecting Your Business Against Shareholder Death

Posted by Janay Harris

The Problem
A shareholder’s business interest forms part of their estate and passes to their beneficiaries on their death, which could mean that running the business is also left to them.

The issues here are:

The Solution: Cross-Option Agreements

A cross-option agreement is the grant of put and each shareholder agrees that upon his death his fellow shareholder have the option, but not obligated to buying his shares and his personal representatives have the option, but are not obliged  of selling his shares to the surviving shareholders.

The method for valuing the business interest is outlined in the cross-option agreement and is usually based on market value.


Each shareholder takes out a life policy written in trust for the surviving shareholders to fund the deceased business interest under the cross- option agreement. The structuring matters like this means that its possible to ensure that the shareholder’s business interest qualifies for up to 100% business property relief from inheritance tax.

A properly-drafted cross-option agreement coupled with associated life policies ensures that a business can continue without having the uncertainty that a shareholders death can bring. It will also provide a tax efficient mechanism that the beneficiaries can extract value from a business.

For more information or to discuss your needs, please call John Ireland now

on 0208 547 2583 or email,

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Many Successful Companies Are Family Businesses

Posted by Janay Harris

One of the main goals in such businesses is often to grow the business and protect it for the family. This is why it is important for those running family businesses to have a will in place, a shareholders’ agreement (or partnership agreement) and a lasting power of attorney to protect their family and the business in the event of incapacity or death.

Putting a will in place is important both for your personal estate and to protect your business interests. Your will can be structured appropriately to capture the available reliefs from inheritance tax on your death including Business Property Relief in relation to qualifying business assets, i.e. your shares in the family business. The importance of capturing such a relief should not be understated. If your entire estate passes outright to your surviving spouse (or civil partner) on your death then Business Property Relief is wasted. By structuring your will appropriately, your business interests can be held on trust under your will to utilise the Business Property Relief. A shareholders’ agreement is another essential protection mechanism for the family business. One of the aims of a shareholders’ agreement is to keep the control of the business in the hands of the remaining shareholders and to ensure that the family of the deceased shareholder is protected financially.

This is usually achieved by allowing the remaining shareholders to buy the shares of the deceased shareholder and vice versa by allowing the deceased shareholder’s executors to sell those shares to the surviving shareholders. This is often referred to as a cross option agreement. The shareholders’ agreement can also help to avoid control of the deceased shareholder’s shares passing to the family members of the deceased as this may disrupt the day- to-day management of the business. The shareholders of a business usually insure their own lives so that on their death, funds are available to the remaining shareholders to allow them to purchase the deceased shareholder’s shares. These policies must be written in trust to allow the sale and purchase to proceed in a tax-efficient manner and to protect the deceased shareholder’s family. This money can then be used in conjunction with a cross option agreement under the shareholders’ agreement to buy back the deceased shareholder’s shares from the deceased shareholder’s executors.

Business owners should also consider what would happen to them and the business if they were to become incapacitated either permanently or temporarily. A lasting power of attorney (LPA) enables an individual (known as the donor) to appoint an attorney to make certain types of decision on the donor’s behalf. A property & financial affairs LPA can be used to authorise the attorney to deal with the donor’s property and finances, including aspects of the donor’s business interests. In some instances, individuals enter into separate LPAs – one for their personal property and financial affairs and one for their business interests. There are limitations in relation to an LPA for business interests. Where the donor is a company director, the appointment carries certain fiduciary duties which the individual, as a director, owes to the company and which he cannot delegate to an attorney appointed under LPA.

Company books should be reviewed to check whether there are any restrictions on an attorney acting on behalf of a shareholder to vote on company matters. We often find that companies have outdated articles of association which do not adequately protect the company or the shareholders in the event of incapacity.

For more information or to discuss your needs, please call John Ireland now

on 0208 547 2583 or email,

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Do I Need A Lasting Power Of Attorney?

Posted by Janay Harris

Who really knows what I want to happen next? The doctor doesn’t know, the local authority doesn’t and neither does the Court of Protection.

Capacity to manage your affairs can be lost for many reasons, such as a sudden accident or medical condition. With over 850,000 people in the UK currently living with dementia (and rising) ensuring your loved ones have the ability to make decisions for you is essential.

Many people understand the advantages of making an Lasting Power of Attorney (LPA) for Property and Financial Affairs, often viewing this type of LPA as being the most important to have in place and putting off an LPA for Health & Welfare until a later date.

But is this really the right thing to do?

Ask yourself this – What would concern you most if you were unable to make decisions for yourself?

Would it be – Where you lived? What you ate? What care and medical treatment you were given?

Or would it be – Is my money being spent wisely?

I know what my answer would be!

The following is a true account of what happened recently to just one of our clients where no Health and Welfare LPA was in place.

Mum was admitted to hospital and following a lengthy stay Social Services along with the Local Authorities compiled a health report along with an assessment for care. Naturally, her children wanted to be involved in this process and requested that they be consulted with the view to wanting to ensure that the care package would be what Mum would have wanted. Not only were they not invited to any of these meetings to decide Mum’s fate, the authorities also refused to reveal the contents of the health report to her own children. All decisions were made without any of her immediate family being present!

This is not an isolated case, Legacy have been made aware of several instances where clients have been in the same terrible position and which could so easily have been avoided. How happy would you be to allow Social Services to make all the decisions about where you should live or other professionals deciding what medical treatment you received and your family having no say in the matter?

Can any decisions made be challenged?

If there was a serious dispute about any decision made by these professionals / authorities, which your family and friends know you would not have wanted to happen, then your family would have to apply to the Court of Protection for a Deputyship order, which is an expensive and lengthy process.


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Posted by John Ireland


Inheritance Tax (IHT) is often call a ‘voluntary tax’ and is paid by many families when, for the most part, could have been avoided. If you want to pass on your estate to your loved ones with the minimum amount of IHT payable, you should obtain professional advice. Currently there are a number of generous reliefs relating to IHT and if the correct planning is started early enough, it may be possible to avoid IHT altogether.


From 6th April 2017, there is be a new main residence transferable nil-rate band – the family home allowance. This allowance will apply when a main residence is passed on to a direct descendant, and will be added to the existing nil rate band of Inheritance Tax, which is currently £325,000. Any unused principal residence transferable nil rate band will be transferred to an existing registered civil partner or spouse.

This new allowance increased from 6th April 2017 by an extra £100,000, increasing to £125,000 in 2018/19, £150,000 in 2019/20 and up to £175,000 in 2020/21 and then increasing each year in line with inflation.

So, by 2020/21 an individual will have their own nil rate band of £325,000 plus the main residence nil rate band of an extra £175,000. These nil rate bands are transferable on death to a spouse or registered civil partner which will mean in increased nil rate band on the second death of £500,000 per person – cumulatively £1,000,000.   


Organising your affairs well means starting the right planning early enough so that the nil-rate band (family home allowance) will apply when your main residence is passed on to a direct descendant. The main residence transferable nil-rate band works in conjunction with the existing IHT nil-rate band, which is presently £325,000. Any unused main residence transferable nil-rate band is transferred to a surviving spouse or registered civil partner. Non-residential property of the deceased, such as a buy-to-let property, will not qualify.

However, it’s not all good news for those who have estates worth more than £2 million as there is also going to be a tapered withdrawal of the main residence transferable nil-rate band, i.e. the relief is withdrawn by £1 for every £2 the estate exceeds £2m – so for an individual it is lost after £2.35 million (£2.7 million for a surviving spouse). The estate is calculated before reliefs such as Business Property Relief and Agricultural Property Relief.


Inheritance Tax is controversial. The arrangements you make concerning the protection of your assets can have lasting consequences for you and your family. Currently, IHT is payable at 40% on property, money and possessions above the nil-rate band. You can however, reduce the rate to 36% if 10% or more of the estate is left to charity. Obviously, it is paramount to ensure that your affairs are planned in the most tax-efficient way possible. However, it is not an easy task to keep abreast of the many exemptions and reliefs available. So what’s the answer?


You could consider using lifetime gifts to individuals. These gifts are viewed as Potentially Exempt Transfers – (PETs) and provided the donor survives at least seven years from the date of the gift will not be Included in the estate of the donor on death for IHT.


Trusts can occasionally help you reduce unnecessary tax charges, allowing the maximum possible part of your family’s wealth to be preserved. You wish to consider transferring part of your wealth to a member of the family but still retain control; our specialists can advise on setting up trusts and can take care of all the administration.


A very important way to minimise IHT is to make a Will, so as to reduce the tax costs and leave your family with the maximum assets.


If you are a business owner, it is also imperative to examine the structure of your business when arranging your affairs. Changing the structure of a business can have significant tax implications.

Some assets are treated more favourably for IHT than others. For example, business assets as well as share in unquoted companies as well as works of art benefit from special concessions which can help when passing on wealth from one generation to the next.


If you don’t have the right advice and financial planning, HM Revenue & Customs could turn into the single largest beneficiary of your estate when you die, for many people that’s enough reason to obtain professional financial advice to ensure your needs are fully considered.

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What assets qualify for – Business Property Relief

Posted by John Ireland

Business Property Relief – what business assets qualify?

Business Property Relief is a very valuable relief that allows certain business assets to be passed on free of Inheritance Tax – IHT. Other business assets qualify for 50% reduction.

On death, in the absence of Business Property Relief – BPR, a business will be chargeable to IHT. Where business property relief applies, the value of the business assets are still included in the estate, but they are reduced by the amount of the relief, which is given at either 100% or 50% of the value of the assets transferred. The extent of the relief depends on the nature of the business asset.

100% relief

The following assets constitute relevant business property, which qualifies for 100% relief:

For purposes, shares which are quoted on the AIM, OFEX, EU Junior or the NASDAQ Europe markets are treated as unquoted.

50% relief

Business Property Relief is also given at 50% in respect of the following


Certain exclusions apply which prevent business assets falling within the above from being relevant business property qualifying for BPR. Relief is denied if:

Land and buildings, machinery and plant owned by the transferor are only relevant business property if immediately before the transfer the transferor’s interest in or shares and securities of the company are also relevant business property.

Two-year rule

In addition, to qualify for Business Property Relief, assets must have been used for the purposes of the business for a continuous period of two years prior to the transfer (although replacement assets may qualify).

Need to know

Business assets only qualify for BPR if they are relevant business property and all other conditions for relief are met.

I hope this has helped, For more information or to discuss your needs, please call John Ireland now:

on 0208 547 2583 or email,

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Email to Eddie Nestor

Posted by John Ireland

Hi Eddie,

In my experience as a Will writer for 20 years and a financial adviser for nearly 30 years, writing a Will is something people often don’t get around to. This is often because they can’t take time out during the day to see a solicitor.
If they do, the majority of solicitors only take client instructions, this can cause problems because the clients haven’t had the benefit of any advice and will generally leave everything to each other then to the children.
This will mean that the survivor may own the house by themselves which will make it vulnerable to seizure by the local council to pay for long term care fees.
On the other hand, if the survivor then re-marries, the property is at risk from their divorce or their premature death – at which time the new spouse could inherit the house and thereby deprive the original couples children.
Once both parents have passed on, the house is passed directly to the children – adding to their estate so that Inheritance Tax is paid again when the children die.
The other potential problem is when gifts are left to the bloodline who then divorce – the gift is then at risk from this divorce.
Life insurance, not in Trust, is also added to the estate – the taxman is then a potential beneficiary if the estate is above the nil rate band!
The moral of the story is to check out the Will writer or solicitor to make sure they are qualified to give advice and are not just taking your instructions – otherwise a well known high street stationers have a cheap Will pack that will do the same job!
Cheers Eddie,


Todays Seminar

Posted by John Ireland

Along with my friend and highly recommended solicitor, Stephanie Kleyman, I did a small seminar today to a group of business owners in the City of London.

Stephanie was talking about the importance of Shareholder Agreements – and if you didn’t know how important they were before you came along – you certainly did afterwards!

My talk was about Asset Protection using Wills and Trusts. I also touched on Lasting Powers of Attorney as it’s really important for business owners to have someone who has a legal authority to act on their behalf if they can’t themselves.

As we didn’t have loads of time, I also spoke briefly on Shareholder insurance and why this particularly useful insurance should be put into a Trust – then it was on to Stephanie to inform our audience about how this ties in with Shareholder Agreements.

I’m really pleased to say that we both got feedback, here’s what some of the attendees wrote about my subject;

Relevant information well delivered in a short time – John Taft

John explains the potential financial and emotional pitfalls of not having an appropriately efficient Will very well and obviously knows his stuff on the use of Trusts to avoid paying unnecessary levels of tax – Graham Roberts

A relaxed atmosphere and very informative. Very well presented and clearly explained – Ruth Weaver

Thought provoking. Need to action knowledge gained – Neil Chesters

John explained complex data in a really simple way enabling the audience to take away useful advice – Jay Surti

Clear, precise, to the point and very knowledgeable. Can also present! Just the right length too! – Pauline Vahey

So, if you or any group you are a member of would like a presentation on Asset Protection please get in touch by calling 0208 547 2583