LEGAL PROPERTY OWNERSHIP AND TAX PLANNING
AFTER THE PANDEMIC For many, living through a global pandemic and being fortunate enough to come out the other side has made them re-evaluate their life, their life style and their aims/objectives for the future. Many people have been left feeling they wish to divorce or separate from their spouse/partner but are unsure where to turn before taking any action. Many wish to ensure they are financially stable and protected in the future. Many people have been left with the urge to plan their future by making sure their Will is up to date leaving their estate to their desired beneficiaries, by considering who can and will assist them if they suddenly became unwell or lose capacity to make their own decisions. Many wish to plan their care needs and express their preferences and many have turned their minds to inheritance tax planning. Sadly, many people may have suffered loss during the pandemic and require guidance and assistance in dealing with their loves one’s affairs. It is always advisable to seek legal advice to explore your options, gain professional advice and guidance on these complex issues. You can access legal advice with us in various ways such as via telephone conference, video conference or traditional face to face meetings, arrangements can be made according to your preference and safety measures taken according to Covid-19 guidelines. Your solicitor will explain the processes and the pro’s and con’s of any decisions you intend making. Your solicitors can draft documents which best meets your needs now and in the future. It may also be beneficial to understand what other agencies and organisations are available to assist you and your family. Should you wish to discuss any of these issues further please contact us.
There are many factors to consider when deciding how best to leave property on death and this should be explored as part of a wider discussion about tax and estate planning as a whole. Jointly owned properties are held in one of two ways, the first being as joint tenants, which means that on the death of the first joint tenant, the property will pass automatically to the surviving joint tenant, regardless of the terms of any will or the intestacy rules. This transfer will be exempt from Inheritance Tax as the spousal exemption will apply. It will also pass without the need for a Grant of Probate. The second way is as tenants in common, when both parties own a distinct “share” in the property – this can be 50-50 or any other split, which would usually be recorded in a Declaration of Trust. On the death of the first tenant in common, his or her share in the property will pass in accordance with his or her will or intestacy. A property held as tenants in common may, of course, still pass to the surviving spouse on the first death, if the deceased spouse left his or her share of the property to the surviving spouse in his or her will, in which case spousal exemption would still apply. Alternatively, a trust can be set up for the benefit of the surviving spouse for the rest of his or her lifetime, allowing that spouse to live in the property but not own the deceased’s share of it. There may be many potential benefits of doing this such reducing the Inheritance Tax liability on the spouse’s death, to claim the residence nil rate band and to provide certainty as to where the share passes after the surviving spouse’s death.
MADELINE RAND King Davies & Partners
Deadline date for the November issue is: Friday 15th October
• Wills, Trusts & Probate • Conveyancing • Property Law • Housing • Family
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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
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