LEGAL BUSINESSES AND DIVORCE
CHANGES TO APPLICATIONS FOR PROBATE We have experienced significant delays with the probate service since 2018 when the Ministry of Justice (MoJ) proposed to increase probate fees. The proposals led to an increase in applications following uncertainty around the suggested new fee structure. Delays were further exacerbated by the pandemic. Combined with it becoming mandatory in September 2020, to use the online service for grants of probate applications by professional users, with exceptions for more specialised applications, this resulted in increasing delays to the probate service with members suggesting these were often going beyond eight weeks before receiving the grant. HM Courts and Tribunal Service (HMCTS) are taking measures to reduce the time between submission of applications and receipt of the grant. From 1st January 2022, the Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2020 came into force. The regulations change the Tax reporting requirements for excepted estates: these are estates below the current inheritance tax (IHT) threshold available at the time of the deceased death. This regulation confirms that Executors / Administrators for a person living in the UK with an excepted estate, who dies on or after 1 January 2022, no longer need to complete the Tax forms IHT205 or IHT217 (where applicable). They must however keep a record of the assets and liabilities of the estate as HMCTS will have 60 days instead of 35 days from the issue of the grant to ask for additional information. The application for probate must contain details of the following:• the net value of the estate for IHT purposes • the gross value of the estate for IHT purposes • the net qualifying value of the estate In addition to this, from 26th January 2022, the costs of applying for probate have increased to a single fee of £273 for professional and non-professional probate applicants, regardless of the size of the estate. The main reasons for this are to remove the discrepancy between professional and non-professional applicants for probate, ensure all users should pay the same fee for the same service, ensure that the fee recovers the cost of delivering the probate service and protect access to justice by ensuring that courts and tribunals are adequately resourced, while reducing the overall taxpayer subsidy for HMCTS. SWANSEA | MUMBLES CARDIFF 01792 65 00 00 16 Axis Court, Mallard Way, Swansea Vale, Swansea SA7 0AJ
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Dealing with the financial fallout from a divorce can be challenging legally but also emotionally. This is certainly true when the divorce involves a family business. It’s an asset that needs to be taken into account in the overall divorce settlement, but it’s not the same as cash in the bank or the family home. You might be able to sell it, but that may the last thing you want to do if it provides the family’s main income or you plan to pass it on to your children. There are potentially complex issues to be considered. Valuing a business on divorce is not straightforward. You need to assess the size and nature of the shareholdings, business and personal tax, the position of any other family or non-family owners and whether or how value can be extracted without undermining its future profitability. If it’s possible, the courts tend to leave the business owner with the business and compensate the other spouse with a larger share of the other assets and/or maintenance. Very often, this is what the couple want themselves. The courts can be flexible, however. For example, it might be possible to share the income or divide the shares. The courts prefer not to leave one person with all the cash assets and another with assets that are tied up in something like a business. But in practice, they often do just that. If you and your ex-partner own a business outright, or have a significant shareholding in a business, it would usually be valued for the financial settlement. Valuing a business can be complicated and, as a result, can cost thousands of pounds. Before you arrange for an expert, it’s a good idea to get some legal advice.
MADELINE RAND King Davies & Partners
Deadline date for the July issue is: SUNDAY 12TH JUNE
• Wills, Trusts & Probate • Conveyancing • Property Law • Housing • Family Partner Mr. Ceri Morgan L.L.B
Tel: 01656 732911 Email: info@kingdavies.co.uk www.kingdavies.co.uk
Associate Madeline Rand BA
Lloyds Bank Chambers, 18 Talbot Street, Maesteg, Bridgend, CF34 9BP
Regulated by the Solicitors Regulation Authority No.637836
