Clarke and Son News

As members of HIPAG - the Home Information Pack Action Group - in relation to Home Information Packs, we received regular updates on HIPs.

HIPAG issued their latest Newsletter last week. The main point they mentioned was that there is no Drop Dead Date yet.

Any property on the market prior to the commencement dates (1st August for 4 bedroom plus and 10th September for 3 bedroom plus) does not need to have a HIP.  However, a date will be set when all properties on the market will be required to have a HIP regardless of when they were first marketed.

At the moment we have no categoric news on when one and two bedroomed properties will be introduced. The end of the year is now looking likely. As soon as we have some definite news we will update our website.

According to a new report, England is heading for a housing crisis - despite the government’s recent pledge to build an extra three million homes by the year 2020.

The independent body set up to advise ministers on new homes said at least 250,000 more were needed.

The National Housing and Planning Advice Unit said average prices in England were more than seven times average salaries - and that they are likely to reach nine-and-a-half times this by 2026.

The report added that, even if the extra homes were built, their affordability would still get worse.

Professor Stephen Nickell, who helped write the report, told BBC news that the 270,000 figure being called for had to be seen in context.

“If you’d like to put this sort of thing into perspective we built more than that number back in the 1930s in Britain when we had a considerably smaller population.

“And most other countries in the developed world, proportionately speaking, build houses at a faster rate than we do.”

The report comes on the same day as Housing Minister Yvette Cooper is expected to unveil funding to encourage local councils to help create the millions of affordable new homes that are needed.

Read the full story here.

With Guy Fawkes day only a couple of weeks away, Nick Bowers of Clarke & Son LLP offers advice on how to make sure you have a good time whilst minimising the risks involved and possible claims for damages.

You might be forgiven for thinking that the biggest risks on November 5th were from fireworks and bonfires. However, they aren’t the only risks, according to insurance statistics. The number of fires increases by 50% according to an analysis of claims.

Comments Nick Bowers, “November 5 is the second worst day for fire-related claims - only Christmas Day has more. However, the biggest risk is injury caused by a firework. In 2005, there were 990 firework injuries in the UK, of which 285 were eye injuries. 86 of these injuries occurred during the Halloween period between 31 October and 6 November. If your careless or reckless use of a firework causes injury to another person, you may find yourself facing a claim for compensation.

“It is safer to enjoy Guy Fawkes’ night at an organised event,” continued Nick Bowers “Local authorities encourage people to attend community displays, and for these there are codes of practice. Your local council’s Trading Standards office is the place to call if you are concerned about what seems to be an unauthorised bonfire in the making. Trading Standards officers also enforce the rules for storing and selling fireworks. Even so, plenty seem to end up in the wrong hands, and in some cases if you feel in danger, call the police.” Vigilance from the public is also helpful for councils, who tend to adopt a zero zero-tolerance approach to fly-tipping in the run up to Bonfire Night. Dumped rubbish can become a magnet to arsonists who find it amusing to set it alight, putting nearby buildings and residents at risk.

For organisers of community events on bonfire night, the advice is:

• plan ahead;
• choose a safe location;
• take out appropriate insurance (the insurance supplied by a standard household insurance policy may not cover this type of risk);
• have named “responsible persons”;
• inform all the necessary authorities;
• provide a PA system, signage and separation distances for good crowd control;
• follow the instructions on the firework with great care;
• make sure any bonfire you build is sited and lit safely; and
• tidy up responsibly afterwards and ensure the bonfire is extinguished.

The government has sound advice about fireworks and bonfires on the Department of Trade and Industry website, with excellent information for retailers and display organisers: www.dti.gov.uk.

Visit www.cgsystems.co.uk/ncfs for the National Campaign for Firework Safety webiste.

Firework accident statistics can be seen at: www.dti.gov.uk/files/file30136.pdf - the figures are for 2005, which is the most recent full year for which figures are available. However, there are statistics for the Halloween period of 2006 (see archive.nics.gov.uk/hss/070118e-hss.htm), in which 69 persons were injured.

Great news for Clarke & Son, recently achieving re-accreditation for the Investors in People quality mark.

It was particularly challenging on this occasion due to the fact that the standard has been raised. The firm has been recognised as Investors in People since 1999 and has been successfully re-assessed on three previous occasions since, in 2000, 2002 and 2004.

Partner Nick Bowers says

“We are extremely proud of this achievement since it represents a purely voluntary standard and demonstrates our commitment to training and developing our staff”.

According to the Royal Institution of Chartered Surveyors (Rics), house prices are continuing to turn down - BBC news is reporting that Rics latest survey states that UK house prices in September generally fell again, with more of its members reporting a fall in prices locally than an increase.

It said enquiries from new buyers had fallen for the tenth month in a row.

The institution blamed the downward trend on a combination of factors, such as higher interest rates and lenders tightening their lending criteria.

RICS spokesman Jeremy Leaf said: “A major correction in the market seems unlikely while economic growth is above trend and employment conditions remain buoyant.”

He added: “The combination of rising interest rates, the introduction of home information packs (Hips) and volatility in the financial markets resulting in tightening of lending criteria, has certainly affected the confidence of buyers and sellers.”

BBC news also reports Rics said that the downturn seems to be severest in East Anglia, and the West and East Midlands, though prices are still going up in Scotland and London.

(Reference BBC News)

In his pre-budget report on 9th October 2007, the Chancellor announced changes to the Inheritance Tax rules for married couples and those in civil partnerships, to take effect immediately.

Before 9th October each spouse or partner had a tax free allowance - the nil rate band - currently £300,000. Transfers of property between spouses and partners were and still are, free of tax. Thus if one spouse or partner died leaving everything to the other, the deceased spouse’s or partner’s nil rate band allowance was not used, as it was not needed.  To avoid wasting it, many couples have drawn up wills containing a nil rate band discretionary trust, in order to preserve this allowance for the benefit of the next generation.

The effect of the change is to transfer the benefit of any unused allowance on the first death, to the surviving spouse or partner.  Thus wills containing a nil rate band discretionary trust are no longer needed for this purpose.

The change is retrospective in that on the death of a widow or widower or civil partner, they not only have their own allowance to set against their assets before tax is paid, but also the unused part of the allowance belonging to their spouse/partner even if he or she died many years ago.

The effect if both spouses/partners were to die in the current tax year having made no lifetime gifts, is that they can pass assets to the value of up to £600,000 before their estates are liable to Inheritance Tax.  Tax on the surplus (if any) is still charged at 40%.

I have already made a Will containing a nil rate band trust. Should I change it ?

As the object of the trust is being achieved much more simply by the change in the rules announced by the Chancellor, it could unnecessarily complicate the administration of your estate if the trust provisions were to be left in your will. We are offering to "convert" nil rate band wills which we originally drafted, to more traditional wills for a discounted fee, for instructions received before 31st January 2008.

I have already set up a nil rate band discretionary trust following the death of my spouse/partner.  Should I do anything about it?

The purpose for which the trust was set up has been achieved much more simply by the change in the rules announced by the Chancellor.  We are therefore offering an easy way of bringing such trusts to an end.

For more details, please contact Roy Young or James Phipps.

Following on from yesterday’s post, Chancellor Alistair Darling has doubled the inheritance tax threshold for married couples to £600,000.

The chancellor also targeted private equity bosses and "non-domiciles" in his pre-Budget report - and pledged to switch green air taxes to flights, not passengers.

But he was accused by the Tories - who unveiled policies in all these areas last week - of being in a "panic" after their recent opinion poll surge.

At the moment, inheritance tax is charged at 40% on assets worth more than £300,000 that someone leaves behind when they die, unless it is left to a spouse.

When the spouse dies the same £300,000 rate applies.

Mr Darling has simply made the individual inheritance tax threshold transferable - allowing couples to combine their allowances and so escape tax on the first £600,000 of an estate. The measure will be backdated "indefinitely" - and it will increase to £700,000 by 2010.

Read the full story on the BBC News website.

According to BBC News, Chancellor Alistair Darling is expected to signal inheritance tax changes and plans to target private equity bosses’ tax loopholes in his pre-Budget report, and it’s also expected that he will downgrade expectations for growth as he outlines his latest thinking on the UK economy.

Hospitals and schools may also get more than expected when the Chancellor sets out to MPs the government’s longer term plans in the Comprehensive Spending Review.

The statements come as ministers seek to regain the political initiative and follows criticism of prime minister Gordon Brown - after he allowed speculation about a snap election to grow and then ruled it out completely.

BBC News also states that the prime minister told his parliamentary party on Monday night that Tuesday’s statements would be an opportunity for Labour to set out its vision and respond to some of the Conservative proposals outlined at last week’s Tory conference.

It was the Tory plan to cut inheritance tax with a levy on business executives registered abroad for tax purposes that helped the Conservative revival, and there is now speculation that the chancellor may signal the government has its own ideas for reforming inheritance tax.

Moves to close the tax loopholes enjoyed by private equity bosses are also expected.

And last week, in an interview with the Financial Times, Darling said that there would undoubtedly be an effect on Britain from the "credit crunch" experienced in the US, he said:  "I see is that there will undoubtedly be an effect. It’s too early to say what it is, but I think all economies right across the world need to be aware of that."

And when asked if he was likely to be reducing his 2.5% to 3% forecast for 2008, Darling responded:

"Well, obviously the figures I will set out when I give my statement in the Commons, but if you look across the world, and given the importance of the US economy, and given what’s happened here in relation to the effect it will have on the availability of credit, it would be very odd if you didn’t take account of that. Now I think it’s a question of striking the right balance.

I think to overreact to this would be a very big mistake, and what I detect from the people I’ve spoken to outside government here, people in business, they are confident. They point to what is happening in the Asian economies, and they make the point that America, yes it’s slowing down, but the Fed has taken what they would regard as corrective action. We’ll obviously have to see over the next few weeks and months how that pans out."

There was a 37% fall in the number of properties that required one of the packs that were put on the market during September compared with the same month of the previous year, according to the Royal Institution of Chartered Surveyors.

This follows on from a trend in August when a 51% slump was reported on four bedroom homes following the initial introduction of HIPs on 1st August.

Home Information Packs (HIPs), which aim to speed up the house buying process by including more of the information buyers need up front, were rolled out to include homes with three bedrooms on September 10 and this is seen to be the cause for the latest figures.

RICS spokesman Jeremy Leaf said:

"Although they are not the only factor, HIPs are continuing to have a detrimental impact on the housing market, in spite of assurances from the Housing Minister that this would not happen.

"With fewer family properties available for sale in September, those buyers looking to upgrade to larger properties are finding it increasingly difficult to choose from declining supply.

"In the current climate of higher interest rates and tightening mortgage lending, the Government needs to take stock of the impact that HIPs is having on the housing market, and refocus on the need for genuine reform of the home buying and selling process."

Source 24 Dash

Members of Clarke & Son showed their bowling prowess at a recent skittles evening.

Fun was had by all, with some taking it more seriously than others and the eventual winner on the night was Accounts Assistant - Andrew Smith - who celebrated after winning the first prize of a bottle of champagne.

Unfortunately, for every winner there has to be a loser, and on this occasion it was Partner Nick Bowers. Luckily he is much better at practicing law than at skittles.