protecting your family's future

Bolt Burdon’s

Wealth and Estate Planning Team

WealthandEstatePlanning@boltburdon.co.uk

Protecting your Family’s FutureWills, Tax, Domicile and Lasting Powers of Attorney

Why Make a Will?

• You decide where your assets go on your death• You can choose who you would like to deal with your

estate administration• Guardians • Minor beneficiaries – age they inherit• Trusts• Funeral arrangements• Can avoid a dispute

When to Review your Will

• Every 3-5 years• Changes in the law

• Change in circumstances• Inheritance• Marriage• Divorce • Death• Birth

What happens when you don’t make a Will?

Survived by partner

Gets nothing!

Claim on deceased’s

estate?

Survived by Spouse/Civil

Partner and no children

Estate £450,000 +

Y N

If parents/siblingsliving

Spouse – personal poss and first

£450k + ½ residueParents/siblings – ½ residue equally

Everything to Spouse/Civil

partner

No spouse, civil partner, or

children

Parents

Siblings whole blood/

half blood

Grandparents

Aunts/uncles whole blood or their issue

Aunts/uncles half blood or their issue

CROWN

Survived by Spouse/Civil Partner and

children

Estate £250,000 +

Everything to Spouse/Civil

partner

Spouse – chattels, first £250k and life interest in

½ residueChildren – ½ residue

when reach 18 and other half when spouse dies

Y N

What should you be thinking about when making your Will?

• Look at whole picture• Foreign assets? - Will to cover worldwide assets or limited in scope• Joint assets? – effect of death• Pensions – part of your estate / nominations• Executors and Trustees – suitability (particularly if trusts involved)• Guardians• Animals• Beneficiaries

• Who• How will you benefit them

Specific legacyi.e my Rolex watch to John

Pecuniary legacyi.e £2,000 to John

Charitable legacy?

Share of the residuary estate(part left over after payment of debts, tax and legacies)

Split into percentages?

TrustsProtection / control

Inheritance Tax – the basics• Primarily a tax on death but:

• Lifetime gifts• PETS

• How is inheritance charged on an estate on death?• Nil rate band (NRB) £325,000 fixed until at least 2015• Anything over and above – 40% tax

• Transferable NRB• Worked out as a percentage of ‘unused’ NRB

• Charitable giving – reduced rate of IHT – 36%

• Other reliefs• BPR• APR

Capital Gains Tax – the basics• When sell or ‘dispose’ of an asset, CGT may be payable

• Dispose means• sell• give it away • transfer it to someone else • exchange it for something else • receive compensation for it - for example you receive an insurance

payout when an asset has been destroyed

• Annual allowance £11,000• Principal Private Residence relief – election if have more than one home

– 2 years• Taxed at 18% or 28% depending on your income tax rate• Last 18 months of ownership are exempt• Transfer a share to someone to make use of x2 allowances

Mitigating Inheritance Tax

What can you do?• Gifting and spending

• Small gifts• Annual exemption• Wedding/ civil partnership gifts

• Life assurance policies, pensions, death in service benefits • Usually nominated to spouse - aggregate to their estate• Written in trust

• Regular gifts from income• Good records to be kept• Submitted to the Revenue

• Inheritance from parents – do you need it? • Post death variations

• Financial products• AIM shares etc – Take financial advice

Domicile• Succession and inheritance tax in the UK is based on ‘domicile’

rather than residency.• Domicile is a complex area and has implications for:

• Inheritance tax • 17-20 tax years• If non dom, UK assets taxed• If dom – worldwide estate taxed

• Capital gains tax• April 2015 – non doms subject to it• No election for non doms

• Succession of assets on death • Get specialist advice and prepare Wills in both countries.

Lasting Powers of Attorney• Two types – Property and Financial Affairs and Health and Welfare

• Property and Financial Affairs• Running bank accounts• Overseas• Running your business• Managing your property

• Health and Welfare• Can only be used on onset of incapacity• Where you will live• What you will wear• Life sustaining treatment• Next of kin

Any Questions?

Bolt Burdon Solicitors

Please contact us with enquiries:

Iain AitkenE: iainaitken@boltburdon.co.uk T: 020 7288 4713

Michael CulverE: michaelculver@boltburdon.co.uk T: 020 7288 4741

Sarah ClackerE: sarahclacker@boltburdon.co.uk T: 020 7288 4747