Posted by Tony Millson, Partner
The Inheritance and Trustee’s Powers Act 2014 received Royal Assent on 14 May 2014 and is expected to come into force in October.
The weekend press reports highlighted that one likely effect of the recovering economy and rise in house prices will be to increase by a third the number of families potentially facing an inheritance tax (IHT) bill. The current IHT threshold of £325,000 was originally set in April 2009, where it is expected to stay until 2019. While it is difficult to avoid IHT altogether, its impact can be eased by following some basic rules.
An anticipated rise in the number of people with Alzheimer’s disease and dementia means that older people should think carefully about putting in place a Lasting Power of Attorney (LPA), even if it is never needed.
If you care about what happens to your assets after you die, you should make a will. Without one, your intended wishes for how your estate is to be distributed and who it should be distributed to, may not be adhered to.
The Sunday Telegraph recently reported a rise in inheritance disputes due to increasing numbers of couples who choose to cohabit without marrying. The diverse range of family relationships seen now have contributed to a significant increase in inheritance disputes over the last 10 years. Problems that arise highlight the importance of making a Will and organising your affairs.
When Chancellor George Osborne said, in his “Pensioners’ Budget” on 19 March, “Let me be clear. No-one will have to buy an annuity”, he was far from alone in appearing to believe that this was still a legal requirement for members of defined-contribution pension schemes.
I could hardly produce a Pensions Update and not say anything about auto-enrolment, after all. Every one of us is going to be engaged in the next year or so in going through the auto-enrolment procedure, whether as an employee or an employer. But how does the “pensioner’s Budget” affect that?