Clarke and Son News

Here is a summary of how the recent budget could affect you as an individual or business:

Inheritance Tax (IHT)

• The IHT nil rate band (the amount that can be given away on death without incurring Inheritance Tax - subject to lifetime gifts)  of £325,000 has been frozen for the next four years (i.e. 6 April 2010 - 5 April 2015)
• For chargeable events above the nil rate band IHT is charged at 40% on death, 20% on lifetime transfers

For further information on Inhertance Tax, please contact Nia Wharry.

Stamp Duty Land Tax (SDLT)

• The Threshold for first time buyers is to rise to £250,000 (applies where effective date falls on or after 25 March 2010 and before 25 March 2012).
• Introduction of an additional 5% rate of SDLT for residential properties £1 million plus. This rate does not apply until 5 April 2011.

All other SDLT rates and thresholds remain unchanged. For more information on Stamp Duty for residential properties, contact Jenny Axe.

Income Tax

• Introduction of an additional rate of 50% on income in excess of £150,000
• Gradual removal of personal allowances above £100,000 at the rate of £1 of personal allowance for every £2 of income
• Rates for basic (20%) and higher (40%) are to remain the same

 Capital Gain Tax (CGT)

• The annual exempt amount for tax year 2010-11 has been set at £10,000
• Entrepreneurs’ relief - doubled from £1 million to £2 million - i.e. 10% CGT paid on the sale of a business or shares in a personal company on or after 6 April 2010

If you have any queries on Business Rates or how the budget will affect your business, contact Peter Turner.

Other Taxes

• Fuel duty increase - to be phased at 1p in April, 1p in October and the remainder in January 2011
• National Insurance contributions to rise by 1% in April 2011. However, the threshold for NI payments is to rise so that nobody earning less than £20,000 will face extra charges.
• No change to VAT
• Business rates to be cut from October for one year
• Annual investment allowance for small firms - doubled to £100,000
• Duty on cider is to increase by 10% from 29 March and duty on wine, beer and spirits by 2% from 29 March

Savings - ISAs

• The annual amount individuals can contribute is to rise in line with RPI
• If there is a fall in the RPI then the amount will remain as for the previous tax year

Other Points of Interest:

Families:

• Provision of income tax relief for payments to special guardians/carers looking after children placed under a residence order.  The exemption applies to qualifying carers and qualifying payments made on or after April 2010
• Parents of one and two year old children are to recieve an increase of £4 per week in child tax credits from 2012
• Pensioners’ higher winter fuel payments to remain for another year

If you would like to discuss Parental Responsibility issues, please contact Bhupendra Sankhla.

Employment

• The length of time over 65s have to work in order to qualify for tax credits is to be reduced
• Youth employment guarantee scheme is to be extended to March 2012 (guaranteeing anyone under 24 will get a job or training once they have been unemployed for six months).

For employment issues, please contact Thomas Hunt.

Business Support

• State owned banks are to provide £105 billion of loans
• Time to pay scheme - allowing firms to agree extra timetables for settling tax bills to be extended for whole of next parliament
• New growth capital fund worth £500 million to help fast-growing SMEs

For advice on business matters, please contact Peter Turner.

The Economy & Government Finance:

• Predicton that growth for 2010 would be between 1% and 1.5%
• The prediction for 2011 is a growth rate of between 3% and 3.5%
• Government borrowing will be £167 billion this year, £163 billion in 2011, £131 billion in 2011/2012, £110 billion in 2013/14 and £74 billion in 2014/15

For more information on any of these issues, please contact Clarke & Son on Tel: 01256 320 555.

A landmark ruling regarding the validity of Prenuptial Agreements is expected any day now from the Supreme Court.  The matrimonial dispute is between a German heiress Katrin Radmacher and her investment banker ex-husband Nicholas Granatino.  It centres around whether Mr Granatino should be bound by the Prenuptial Agreement he entered into with Ms Radmacher in which he agreed not to make a claim on her fortune in the event that their marriage failed.  Ms Radmacher has a fortune of £106,000,000 but the Court of Appeal only awarded Mr Granatino £1,000,000.  If this decision is upheld by the Supreme Court it will represent a sea change in the law’s treatment of Prenuptial Agreements which previously had a chequered history in English law.  It will not only give legal recognition to such agreements without the need for parliamentary legislation but also set a legal precedent for other divorce Courts in the country to follow.

 For further information on Prenuptial Agreements, please contact Bhupendra Sankhla on Tel: 01256 320 555.

The Court of Protection’s role is to make decisions in relation to the health, welfare, property and affairs of children and adults who are suffering from mental incapacity.  Currently, these decisions are made in hearings held in private, with only the parties to the application being present, to ensure confidentiality is maintained for the vulnerable people involved.

Recently, the Court of Protection, which was quoted in The Times as being “One of Britain’s most secret courts” has been subject to widespread criticism in its workings. These criticisms are largely from people applying to manage the affairs of elderly or vulnerable relatives who have found the Court of Protection to be bureaucratic, complex and intrusive. As a result of these complaints the senior judge at the Court of Protection, Denzil Lush, has stated that he would favour a decision to allow media access to the hearings, as is the current position with the rest of family courts.  He did, however, specifically state that “there would have to be anonymity for the vulnerable elderly people involved, the details of whose financial affairs were being exposed”.

What is clear is that media presence could boost public confidence and understanding of the Court of Protection after the recent widespread criticism of its workings.

If you have any issues relating to the Court of Protection, you can contact Nia Wharry, Head of Wills & Probate department on Tel: 01256 320 555.

Bhupendra Sankhla, Partner and Head of the Family Department at Clarke & Son LLP is now able to offer clients a Collaborative Law Service.  This is an alternative to court for divorcing couples, involving four-way meetings with both parties and accompanying solicitors.

 The aim is for all parties to set the agenda and to reach an amicable conclusion within their own timetable.  It helps to reduce the amount of cost to the client as there is less correspondence between solcitors.  Also, the solicitors sign an agreement to say they cannot represent the client in court, giving the client an incentive to work with this process.

It is an alternative to mediation which involves an independent person known as a ‘mediator’ who assists the parties reaching an agreement.  However, the mediator is not a legal representative and therefore each party is advised to take additional legal advice.

 Bhupendra says of the new service:

“I am delighted to be able to offer clients this alternative to court proceedings, which can be costly and stressful for all concerned.  It is vital that all parties are happy with arrangements, especially when children are involved and this process will hopefully help to achieve this.”

For more information on Collaborative Law, please email Bhupendra Sankhla, who is an accredited specialist member of Resolution (formerly known as The Solicitors Family Law Association) or tel: 01256 320 555.

The High Court has confirmed that a Solicitor’s Undertaking is something that the party to whom it is given should be entitled to rely on absolutely.

The decision reaffirms the importance of Solicitors’ undertakings in the conveyancing process and emphasises that undertakings should always be appropriately qualified and unequivocal.

A buyer that accepts a solicitors’ undertaking should be entitled to rely on it knowing that the solicitor will be compelled to comply with its terms.  If solicitors were able to delay complying with their undertakings because of  a dispute with a third party (save, perhaps, in very exceptional circumstances) it would undermine the sensible conveyancing practices that have evolved over time.

 For any queries on all services offered by Clarke & Son Solicitors, please email us or Tel: 01256 320 555

On 14 July 2009, the Lasting Powers of Attorney, Enduring Powers of Attorney and Public Guardian (Amendment) Regulations 2009 were made, in response to a consultation launched in October 2008. These regulations, which come into force on 1st October 2009, amend the Lasting Powers of Attorney, Enduring Powers of Attorney and Public Guardian Regulations 2007 to introduce new prescribed forms for individuals intending to make Lasting Powers of Attorney.

The new forms are considerably shorter than the current 28 page forms, use clearer language and problem areas such as tick boxes have been removed and continuation sheets introduced. They also incorporate fundamental details such as attorneys’ addresses which were unavailable in the previous forms. They will be launched on 1st October 2009 and until then the current forms should continue to be used.

There will be a transitional period where the old forms will be allowed, provided that execution occurs before 1 April 2011.

For more information on Lasting Powers of Attorney contact Nia Wharry or Tel: 01256 320 555.

Ref. The Lasting Powers of Attorney, Enduring Powers of Attorney and Public Guardian (Amendment) Regulations 2009 and explanatory memorandum.

In a landmark judgement, three of the most highly respected judges in the UK, have ruled that Prenuptial Agreements can be decisive in determining the financial division on divorce.

This court ruling could pave the way for such contracts to become legally acceptable in England and Wales.

Miss Radmacher, a German heiress appealed against a 2006 court ruling to award her French husband £5.8m of her £100m fortune. A Prenuptial Agreement enforceable in the Germany but not the UK stated that her husband would not make a claim if they divorced.

The Court of Appeal ruled that such contracts should be taken into account by the courts when they divide assets after a marriage fails. Bhupendra Sankhla, Partner and Head of the Family Department at Clarke and Son LLP said of this development:

“This will be a welcome relief for not only the fabulously rich but also the not-so-rich who will be more able to ring fence their fortune from attack by an ex-spouse in English Divorce Courts.”

For more information on Prenuptial Agreements, contact Bhupendra Sankhla, Partner on Tel: 01256 320 555

The current uncertain financial climate is leading to more applications to vary Maintenance Orders which were made in more prosperous times. Agreements under Court Orders requiring (usually) the husband to pay maintenance to an ex-wife may not be sustainable due to the downturn in the economy because the husband may have had a pay cut, lost his job, etc. As a result ex-husbands are looking to renegotiate the amount they pay to their ex-wives.

A fluctuating economy also means that family lawyers are finding it increasingly difficulty to value and divide assets amongst spouses/civil partners. With a falling property market (usually) the main asset of the marriage being the matrimonial home is worth significantly less. Therefore it is more difficulty for it to provide enough funds to parting couples to support two separate households on divorce.

B Sankhla, Partner, and head of the family department at Clarke & Son LLP advises:

“Marrying couples should consider Pre-Nuptial Agreements in order to provide some economic certainty in the current uncertain economic conditions. The divorce Courts are more willing to honour agreements between parties made prior to or during the marriage.”

For more information on please contact Bhupendra Sankhla on Tel: 01256 320 555.

Over the last decade, there has been a significant increase in employment legislation that has originated from both the EU and the UK.

It’s an established fact that many businesses, and small businesses in particular, find the steady stream of employment legislation extremely challenging.

For employees too, Employment Law can often be viewed as minefield of information beset with potential pitfalls - especially in the area of redundancy which, unfortunately, is an all-too-common occurrence in these changing economic times.

Whether you are a business owner, employee or former employee, there is no substitute for qualified, professional advice to give you all the facts you need under current legislation.

Areas in which our Employment Law specialists can advise our clients include:

• Redundancy, Lay-Offs and Short-Time Working
• Dismissal and Grievance Rules
• Employment Terms & Conditions
• Parental, Paternity or Maternity Leave
• Parental, Paternity or Maternity Pay
• Working Time Regulations
• Flexible Working
• Agency Workers
• Self-Employed
• National Minimum Wage
• Equal Pay and Conditions
• Health & Safety in the Workplace
• Disability Discrimination
• Age Discrimination
• Sex Discrimination
• Race Discrimination
• Employee Holiday Entitlement
• National Minimum Wage
• Employing Migrant Workers.

If you have an issue that needs to be resolved either as a business owner or as a worker, or you’re simply looking for some friendly help and advice, contact us or e-mail Nicholas Bowers direct.

Reports in the leading legal publication ‘The Lawyer’ have indicated a significant increase in the number of women seeking advice on divorce proceedings. Reports suggest that a growing number of women are seeking to secure assets as the economic boom turns to gloom.

Meanwhile, men are seeking advice on how they are going to prevent their former wives from accessing their dwindling wealth.

More men are also asking about variations - where court orders were made years ago and the husband has to pay an annual sum to the wife but can no longer afford to.

Bhupendra Sankhla, Partner, Clarke & Son says, “In the present economic climate, I’m finding more already-divorced couples coming back to us demanding a change to their original court orders, for the men because their earnings are not keeping up with the rising cost of maintenance fees and for the women, (or the main carers of the children), because of the increased price of food and fuel.”

If you need further information, help or advice regarding Divorce, Mediation and Reconciliation, Pre-nuptial Agreements  or Informal Separation, contact Bhupendra Sankhla Partner, Family Department.

Alternatively, call Clarke & Son on 01256  320 555.