As of April 6th 2020, the pre-existing deadlines in place for paying Capital Gains Tax following the sale of a residential property are changing in the UK. To be as prepared as possible, you need to understand these changes.
From the aforementioned date, you will have approximately 30
days to inform HMRC and pay owed Capital Gains Tax – if you are a UK resident
selling a residential property in the country.
Should you fail to inform HMRC about your Capital Gains Tax
within the 30-day post-completion window, you could receive a penalty and be
made to pay interest on top of what you already owe. Because of these potential
consequences, it is crucial that people fully comprehend the changes.
What is Capital Gains Tax?
Put simply, Capital Gains Tax is what you pay on any profit
you make following the sale or disposal of an asset that’s value has increased.
In these situations -you need to report Capital Gains Tax within 30 days
If you sell or dispose of any of the following, you might
need to report on your Capital Gains Tax and make a payment:
A property that hasn’t been used as your home
A property used for holidays
A property that you let out for others
An inherited property that hasn’t been used as
your home
However, you will not be required to report or pay if:
A contract for sale was made prior to 6th April 2020
The Private Residence Relief criteria are met
The sale was to a spouse or civil partner
The profit gains fall within tax-free allowance
The property was sold at a loss
The property exists outside of the UK
Online Service to be Launched
HMRC are launching an online platform that lets you report on or pay any Capital Gains Tax owed by yourself.
Advice for Agents
Do you act as an agent for a person who is selling or
disposing of residential property in the UK? If so, you need to:
Register with Agent Service
Ensure that Capital Gains Tax owed by any of
your clients is reported and paid within the 30-day window following completion
If you’re a non-UK resident
Are you a non-UK resident? If so, you will need to carry on
reporting the sale/disposal of any UK property and/or land. You must do this
even if there is no Capital Gains Tax owed within the 30-day window following
completion.
You will no longer be allowed to defer any Capital Gains
payment you owe through a Self-Assessment return, and any you owe will have to
be paid within the 30-day window.
Included in this is the disposal of residential property,
non-residential and other disposals.
From April 6th 2020, non-UK residents can use the
new online platform, which is replacing the pre-existing reporting service.
If you are a non-UK resident, you can discover whether you
need to pay Capital Gains Tax here.
What About Trusts?
Do you represent a Trust? If so, you will need to register at the Trust Registration Service. For existing Trusts, you can utilise your UTR in order to gain access to the new service.
If you represent a Trust for a UK-based resident who
sells/disposes of UK residential property, you will need to make sure any
Capital Gains Tax owed is reported & paid within the 30-day window
following completion.
Similarly, if you represent a Trust for a non-UK resident
who sells/disposes of UK residential property, you will need to make sure any
Capital Gains Tax owed is reported & paid within the 30-day window
following completion.
[vc_row][vc_column][vc_column_text]Buying a leasehold can be a complex process, and having questions is perfectly normal. Luckily for you, we have compiled this comprehensive guide on all things leasehold. Here we answer, in detail, 12 key questions that people might have when entering into this process. If you get to the end of this piece and still have questions, we are just a short phonecall or email away. However, the chances are you’ll find exactly what you’re looking for right here…
How long is left on the lease?
During the process of buying a leasehold, you buy the right to possess the property for the remainder of the term of the lease. When drawn up in the past, leases have been anything between 99 years and 999 years. Obviously, as the years go by, the term reduces.
The law allows you to require that the landlord extends the lease once you have owned the property for two years, but the cost of that lease extension goes up dramatically once the term of the lease is less than 80 years. For this reason, some mortgage lenders want there to be as much as 90 years left to run so that you have time to extend the lease before the costs go up.
How much is the ground rent?
Ground rent is the amount that the lease says you have to pay to the landlord every year – for nothing. Yes, you do not get anything in return for ground rent other than to be able to say that you have complied with the requirements of the lease. If you fail to pay the ground rent then the law allows the landlord to take you to court, so you need to know that you can afford it and should always pay it if there is a dispute over the rent. You can claim it back later if you win the dispute.
Ground rent can be anything from a peppercorn (basically a nominal value so you do not actually pay anything) to many thousands of pounds, and it can go up further.
Is there a ground rent review clause?
You need to ask your property lawyer whether there is a rent review clause and how that operates. If there is a calculation, you should run the calculation for at least 50 years to see what the payment would look like. There have been some badly-worded rent review clauses that have resulted in ground rents in the region of millions of pounds.
How often is the rent reviewed?
Most lenders require that the rent is not reviewed more often than every 20 years, so you need to check that your lease will comply with that.
When is the next review?
It may say that rent is reviewed every 20 years, but you need to know from when. Some lease start dates are well before the actual date of the lease, because the builder might start all their leases on the same date within an estate. If you are buying a leasehold that is one of the last plots to be sold on the estate then the lease may already have been running for several years, so you may find that your rent is reviewed or your lease will become ‘short’ much sooner than you would think.
How much is the service charge?
Service charges are the contribution by the property owners towards the maintenance of the shared areas and amenities. These vary hugely depending on how big the communal areas are and the type of shared amenities. You can imagine that if you have access to a marina or leisure facilities then these can be very high, whereas if you have a leasehold house which only has to contribute towards a small space of communal garden – then hopefully the service charge would be pretty low.
Are there any major expenditures coming up?
Where there are major expenditures, the landlord has to consult with leaseholders before committing to having the work done. Your property lawyer will ask if there are any Section 20 notices revealed which would indicate if works were planned. However, you need to ask your surveyor to see if they can foresee any work that might come up which has not yet been consulted on.
Is there a sinking or a reserve fund?
Every leasehold estate should have an asset management plan detailing what the likely costs will be to maintain the properties in the estate. This should result in an additional payment to the service charge, which goes into the reserve fund to build up funds, so that when a large expenditure does come up you don’t have to find thousands of pounds. Once paid into the reserve fund you won’t get the money back but similarly, when you buy the property you will get the benefit of the monies already accrued in the reserve fund.
What consents do I need?
The lease may well contain additional requirements for you to obtain the consent of the landlord. For example, if you want to alter, extend or let the property, but also if you want to keep a pet or run a business from the property. Therefore, you need to know whether you have to get consent and, if it is going to be important to you, make obtaining consent a condition of your purchase of the property.
What are the administrator’s fees?
When buying a leasehold the lease administrator will charge fees for administering the lease. The lease administrator might be a landlord, a management company, a managing agent, a right to manage company, a housing association, a residents’ association or a legal representative of any of the above.
There could also be more than one lease administrator all of whom may want to make a charge for the administration of the lease.
Ask your property lawyer to ask the lease administrator for a menu of their charges so that you know how much it will cost you if you want to sell, let, re-mortgage, extend or do anything that requires their consent within the lease. The administration fees can be very high, and you generally have no right to challenge how reasonable they are through the courts.
Are event fees payable?
Some leases contain a requirement that if you sell, let or re-mortgage the property you have to pay a percentage of the value of the property at that time to the landlord. Sometimes event fees are created as a way to offset service charges during the ownership, particularly in retirement homes, but in other cases it is just an additional payment to the landlord.
Is the lease acceptable to mortgage lenders?
Whether or not you are buying a leasehold with a mortgage you need to know that you will be able to sell on the open market or take a mortgage out in the future if you need to. It is therefore incredibly important that you know whether the lease is acceptable to mortgage lenders. Of course, a lending policy does change so do beware that just because it is okay now does not mean it will be acceptable in the future.
For example, some lenders have changed their policy so that they will not lend on leases which have ground rents of more than £250 (£1,000 in Greater London). This is because they can be caught by the provisions of the Housing Act 1988, which would turn the lease into an assured shorthold tenancy that would give additional rights to the landlord if you fall behind on payment of the ground rent. The Government have committed to change this law, but until it does you need to make sure that your lease meets the lender’s policy.
There are lots of other complications to leasehold, so make sure that you read your property lawyer’s advice thoroughly and question anything which you do not understand or which conflicts with what you have been told already.
There are lots of leases out there which are absolutely fine – you just need to make sure that you are buying one of them. It is worth noting that the majority of these 12 questions require information which the person marketing the property should have available under the Consumer Protection from Unfair Trading Regulations 2008. Be sure to ask them for their material facts disclosure for the property.
If you require further advice on buying a leasehold and other related issues, feel free to get in touch with us by giving us a call on 01782 652300, or sending an email to lawyers@tinsdills.co.uk.[/vc_column_text][/vc_column][/vc_row]
Congratulations to Amelia Blackhurst and Louise Williams, qualifying as Solicitors today joining their colleague, Sarah Longley who qualified into our Family Department in September. They have all been part of Tinsdills well established Trainee Programme.
Amelia is qualifying as a Solicitor into Residential Property to support the continued growth of the department and in particular, to support our Hanley team, which has expanded significantly in the last two years. We have recently welcomed Zoe back from maternity leave at our Hanley office, Sam Sharratt is back working with the team at our Leek office.
The role will include assisting on a stimulating and varied case load including sales, purchases, leasehold work, new build matters, re-mortgages, right to buy, transfers of equity and title issues. The appointment will allow the team to take on an increased number of new instructions, whilst continuing to provide a personalised service.
Louise will be joining the Commercial Property Team based in our Sandbach office. Louise’s addition to the team will help continue to grow both the firm and the department’s presence in Cheshire and the surrounding areas. As a team, we will be able to accept more instructions from private individuals and businesses, both in the area and further afield, whilst maintaining the high level of personal service we are known for.
She will be dealing with all aspects of commercial property transactions including: purchasing sites for development and then selling the individual properties or units; commercial sales and purchases of freehold and leasehold land; and landlord and tenant matters such as drafting, negotiating and reporting on leases.
Congratulations to you both!
If you would like to discuss how our strengthened Residential and Commercial Property Department can help you, your business or your family, please do not hesitate to contact us:
[vc_row][vc_column][vc_column_text]We are pleased to announce that we have acquired the Corporate Law, Commercial Property, Dispute Resolution and Wills, Trusts and Probate departments of fellow Staffordshire based law firm, Grindeys Solicitors.
The acquisition sees us welcome 11 team members from Grindeys Solicitors to now offer a larger team who are all dedicated to providing even more legal services. The new team members bring a wealth of experience and knowledge to our current teams to enhance the legal advice we offer across Staffordshire and Cheshire.
Commenting on the acquisition Tim Cogan, Managing Director Compliance Officer and Head of the Personal Injury Department at Tinsdills Solicitors says “Tinsdills Solicitors and Grindeys Solicitors have both successfully worked in the local legal market as independent providers of high-quality legal advice to both personal and business clients for many years. As Grindeys Solicitors have now decided to contract the areas of legal work in which they operate this is a great opportunity to pool both firms’ expertise in these specific areas so that we can enhance the type and level of services offered to the mutual benefits of both firms clients”
Our new team members include:
Company and Commercial / Business Services –
Ryan Marr, Solicitor
Karen Green, Secretary
Dispute Resolution –
Jason Washington, Solicitor
Linda Collett, Secretary
Commercial Property –
Julia Hagan, Solicitor
Lauren Wild, Solicitor
Laura Haughton, Secretary
Wills, Trust and Probate –
Luigi Dimaio, Solicitor
Michelle Birchall, Legal Executive
Hollie Higgins, Secretary
Maggie Williams, Secretary
Peter Hamilton, Managing Director and Head of the Wills Trusts and Probate Department comments; “I’m delighted to welcome new team members to our department and the business as a whole! The new additions will strengthen our business, helping us to continue to develop our already strong offering in the local area; creating a very exciting time and future for Tinsdills Solicitors”.
This is an incredible milestone for the business, which is a testament to the outstanding team we have assembled, the great business we have created and exceptional service we continually deliver.
We are incredibly excited about the potential this unlocks for us and with the additional resource which will leverage impact and scale for future growth across Staffordshire and Cheshire.[/vc_column_text][/vc_column][/vc_row]
A recent article from the BBC claims that new home freeholds aren’t “worth the paper they’re written on”, with one person saying “I don’t trust landlords and leaseholds. I promised myself I would never get involved with a leasehold property. Now finding out my freehold isn’t worth the paper it’s written on makes me so angry.”
Andrew Burrows – Director and Head of our Residential Property team says “it’s very important when buying a property that you get the correct advice, and this can be particularly important when buying a new build property.”
The article also states “once the estate is finished and handed over to a management company, Denise (resident) will be charged each year for services such as the upkeep of the green spaces and the maintenance of the roads. However, she doesn’t have any control over what that rent charge might increase to in the future.”
Following on from this, Andrew suggests the way that planning permission is currently granted for developments means that developers will be forced to create a green or open space in the development. Whilst this will provide a significant amenity for the residents, once the development is completed the builder will want to hand over responsibility for its maintenance to the residents. This is usually achieved by the residents being forced, upon purchase of the property, to become involved in a management company ran by the residents themselves. In some cases, residents can even be forced to become officers of the company.
The maintenance of these open spaces, and the fees associated with the running of the company such as accountants fees, are levied on residents as an annual payment, usually called a rent charge. The exact amount for this isn’t fixed in the deeds, and so can rise unexpectedly. This can lead to complex legal arguments regarding sanctions for the non-payment of these charges, which can delay or even prevent a property being sold.
Proposals are being made to regulate these charges more closely, but given the present political climate, it is difficult to guess when these may become law.
The BBC also proposes “Covenants are intended to preserve the amenity and outlook of the wider estate and to promote good neighbourly relations and when planning the estate, the developer will need to form a view as to how restrictive the covenants should be.”
Andrew backs this up by suggesting, sometimes to reflect planning conditions but sometimes for the developers benefit, the deeds will contain restrictions called Restrictive Covenants. These can prevent alterations to the property, parking certain types of vehicles, or preventing running a business. It’s important that these are considered before committing to the purchase, as they may hinder your plans for the property and not be acceptable to future buyers.
Whilst it’s not always easy, the best approach is to look past the glossy sales brochures and the pristine show homes to truly consider, with an independent and suitably qualified and experienced lawyer, exactly what you are signing up to.
Continuing our exciting news last month with welcoming Helen to the family team, we are now pleased to announce that Sarah Longley has completed her training contract and has qualified as a Family Law Solicitor. Sarah started her training contract at Tinsdills in 2017, where she completed seats in Family, Commercial and Residential property before going back to complete her final seat in the Family department. Sarah says she is “excited to be continuing her career” at Tinsdills.
Well done Sarah!
Sarah has a wide range of experience dealing with divorce, including the preparation of petitions and the proceedings in general, advising clients on children related issues, preparing applications for court proceedings and dealing with Court proceedings in general. Sarah will mainly cover our Leek and Hanley branches, joining Marie and Helen. Marie has worked at Tinsdills for 18 years and specialises in Family Law, and Helen has also specialised in Family Law for 30 years.
The employer has a duty to
assess risks and to take steps to avoid or minimise risks where possible. These
steps may include:
Prevention
Response
Training
Management & supervision
The risk assessment should be
reviewed periodically and should assess:
Whether there are any tasks too dangerous to be carried out by a lone worker
Any appropriate arrangements to provide help or back-up
Employers have a duty to
consider any foreseeable emergencies and consider factors such as:
Is the workplace a specific risk to a lone worker
Is there a safe way in and out for one person
Is there machinery involved
Are chemicals involved
Is it necessary to lift heavy objects
Training is particularly
important for lone workers given there is limited supervision and to enable the
worker to cope with any unexpected circumstances.
There should be some
supervision and monitoring and again this should be included in any risk assessment.
Perhaps regular contact
between the worker and supervisor is required by phones or other means. Is a
manual or automated warning device necessary? Should the lone worker call into
their supervisor or office once their task has been completed?
An emergency procedure should
be agreed and communicated to your employees. The best way of doing this is by
way of a written policy.
If your business has one or
more lone workers then it may be relevant to have a very simple Lone Worker
policy in place. This can be included as a stand-alone policy or could be
included in your Staff Handbook.
You may want to consider
revising all your employment policies and procedures to make sure you are as up
to date as you can be regarding obligations to your workforce.
Comments Off on What is a Settlement Agreement and When Can They be Used?
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A settlement agreement is a contract between an employer and employee (or former employee) that is used to record terms of agreement between the parties following the termination of employment. The main purpose of settlement agreements is that in signing them, the employee waives their rights to bring a claim against the employer in a Court or tribunal, and they usually involve an agreed payment from the employer to the employee.
To be valid, the agreement must be in writing, must relate to particular potential complaints or proceedings, and must state that the relevant statutory conditions regulating settlement agreements have been met. Most importantly though, the employee must have taken advice from a relevant independent adviser, who must be named in the agreement.
The cost of your independent adviser is usually covered by the employer. There should be a clause within the proposed settlement agreement that stipulates this and states the amount that they are willing to pay.
There is specific criteria that the relevant independent adviser has to meet. This includes the stipulation that they must have a current professional indemnity insurance policy in place, and they have to be identified in the agreement so that they can sign to say that they’ve provided advice.
They can be used in most circumstances relating to the termination of employment, including a redundancy situation, a gross misconduct dismissal, a capability dismissal, or even a mutually agreed termination.
If you’re entering into a settlement agreement, you should remember that you’re doing so voluntarily – which means that the terms of the agreement are negotiable. So, if your employer offers a payment that you don’t consider to be fair, you can either negotiate this, or your independent adviser can do so on your behalf.
In some situations, your former employer may offer you less than your statutory and/or contractual entitlement. Usually, your settlement agreement should include a compensatory payment in addition to your statutory or contractual entitlements. These statutory and contractual payments can be made up of notice pay, statuary redundancy pay, holiday pay, bonuses etc. A compensatory payment is a separate payment altogether.
So, it is worth noting that in signing the settlement agreement you are signing away your rights to bring a claim against your employer – which may not be a good idea if your employer is only offering payments equal to or less than your statutory and contractual entitlements. Again, your independent adviser is the best person to ascertain whether the payments that you’re being offered under the agreement are fair in all the circumstances.
Your independent adviser will also handle tricky bits like distinguishing which payments are taxable and which are tax free, based on whether the payments are compensatory or salary payments. Compensatory payments are made for the loss of your job, and the first £30,000 will be paid tax free. Anything over that amount will be taxed in the usual way, along with all other payments (including notice pay, holiday pay and bonuses).
In general, your independent adviser will help you to consider whether your settlement agreement is fair in all the circumstances. For example, if you’ve got a potential or actual personal injury claim, your adviser will be able to ensure that the wording of the agreement excludes this type of claim from the list of claims you are relinquishing, to ensure you will still be able to pursue it.
Overall, it’s fair to say that settlement agreements are contracts that formally sets out the terms of the termination of your employment relationship. Your independent adviser is a requirement but is also there to ensure that the contract is worded and signed off in the manner that most benefits you.
If you are seeking advice relating to your employment rights or a settlement agreement, feel free to get in touch with us. You can call us on 01782 652300 or drop us an email at lawyers@tinsdills.co.uk.
[vc_row][vc_column][vc_column_text]Having a well-drafted shareholders’ agreement in place not only documents the understanding between shareholders in relation to particular matters, which can provide certainty, but can also provide shareholders with better protection in the unfortunate event of relationships deteriorating.
So what is a shareholders’ agreement?
A shareholders’ agreement is a contract between the shareholders of a company, and more often than not, the company itself, which sets out agreed matters between them such as how shares can be transferred, how dividends are payable, non-compete restrictions and exit plans, amongst other things. It gives the shareholders personal rights and imposes personal obligations on the shareholders.
The agreement can provide protection to minority shareholders and majority shareholders, regulate the transfer of shares, impose restrictions, govern decision-making, and much more.
It is also very easy for individuals to go into business together and to hit the ground running without thinking about what happens to the company if there is a major disagreement. Despite good intentions, there will be times during the life of a company where disagreements occur. A shareholders’ agreement can include a dispute resolution procedure which can be utilised if relationships have broken down, and which will give the parties a structured plan in stressful circumstances.
However, it is important to ensure that the company’s articles of association are consistent with the shareholders’ agreement to avoid uncertainty or conflict and ensure adequate remedies are available in the event of a breach of the provisions. Together, the articles of association and the shareholders’ agreement regulate and govern the running of the company, the relations between the company and its directors & shareholders. Below are a few common questions often asked when discussing the benefits of a shareholders’ agreement.
Below are a few common questions often asked when discussing the benefits of a shareholders’ agreement.
Why should the shareholders have an agreement?
Some of the main benefits of a shareholders’ agreement are:
In the event of a dispute occurring, a well-written shareholders’ agreement can provide a dispute resolution procedure to be followed, with the intention of resolving disputes swiftly in order to protect the company’s business. A shareholders’ agreement may also prevent a dispute escalating as
the provisions may assist in clearing up any misunderstanding between the parties.
Share transfer provisions, such as pre-emption rights (the right of first refusal), compulsory transfer provisions (deemed transfer of shares in certain situations) and permitted transfers (the ability to transfer shares to family members or intra-group).
It can include specific policies in relation to the declaration of dividends, providing for certain levels of dividend to be declared, certain reserves to held or different policies that apply to different classes of shares.
It can offer protection to minority shareholders, such as providing for matters that require the consent of minority shareholders or “tag along” rights in respect of any sale of shares by the majority shareholders allowing the minority to “tag” on to that sale.
It can also offer protection to majority shareholders, such as the ability to oblige the minority shareholders to sell their shares if an offer is received for the entire share capital of the company and they wish to sell.
It can detail agreed provisions relating to the management of the company at the director level, which helps to provide clarity and consistency regarding the day to day running of the company. For example, detailing matters that would require the consent of the shareholders or allowing specific shareholders to appoint directors.
It can impose restrictive covenants on the shareholders, restricting their ability to be involved in any business that competes with the company’s business or provides services to the clients of the company or engages suppliers.
It can provide for what will happen where consent to certain matters require the consent of two or more parties and such consent is not forthcoming. As a result, the inaction may adversely affect the company’s business. Deadlock provisions can be included in an agreement which provides the mechanics of how the deadlock will be resolved, usually by providing that the parties can buy each other’s shares.
It can impose confidentiality restrictions on the parties to the agreement to protect valuable information that is key to the company’s business, both whilst the parties are involved in the company and after.
The process of drawing up a shareholders’ agreement requires the shareholders to address many provisions and scenarios, such as what happens if a shareholder wishes to transfer or sell his shares or passes away, exit strategies, and how shares would be valued in different scenarios. On a practical level, this engages the shareholders to discuss, consider and agree with each other an acceptable position in relation to such matters which, in doing so, focuses minds and minimises the risk of disagreement in relation to such matters in the future if and when they arise.
It can include provisions that relate to commercially or financially sensitive matters which are not appropriate to be included in the articles of association of the company (which is a publicly available document).
The agreement can also demonstrate that the shareholders have planned ahead and have acknowledged that disputes may arise, but have attempted to address how such disputes would be handled to minimise disruption and detriment to the company and its business. Having such foresight can create a good impression if the company is seeking finance or investment from third parties.
What are the risks of not having a shareholders’ agreement?
Some of the main risks of not having a shareholders’ agreement are:
If things don’t work out as planned, difficulties can arise without a clear exit strategy for shareholders.
Shareholders who leave their employment with the company may be able to retain their shares, which is often commercially undesirable.
Minority shareholders are forced to rely on statutory rights which, in practice, may be cumbersome and expensive to enforce.
Minority shareholders may be able to block a sale.
If there is a deadlock situation and no resolutions either at director or shareholder level, draconian measures such as winding up the company may be the shareholders’ only option, which can be extremely time-consuming and expensive.
Shares are, at law, freely transferable unless the articles of association of a company, or any relevant agreement between shareholders, prevents this. So without appropriate share transfer restrictions, the shares are at risk of transfer to unknown parties.
Reliance on common law confidentiality obligations which may be more difficult to enforce.
Departing shareholder’s ability to set up a competing business, poach employees or suppliers.
The directors may be able to take decisions of the company which the shareholders would want to be involved in, such as excess capital expenditure, acquisitions or sales of other businesses or assets, making or receiving loans or other financial commitments.
What are the benefits of seeking legal advice on a shareholders’ agreement?
It is always advisable to seek legal advice on the terms of any legal agreement.
It is often the case that the risks lie with what is not in the agreement rather than what is.
The terms of a shareholders’ agreement and the articles of association of a company are very much tailored to a company’s share and management structure, and the company’s future plans. The agreements are not “one size fits all” and receiving advice appropriate to your company circumstance is imperative to avoid creating more problems than the agreements solve.
We can negotiate and draft all terms of a shareholders’ agreement and articles of association on your behalf. We have vast knowledge and experience in drafting both simple and complex agreements and articles to suit your needs. Getting the right legal advice at the right time can help to keep your business running smoothly in order to achieve long-term success.
If you have any other questions regarding this subject or Commercial Law generally, feel free to contact us today. Give us a call on 01782 652300 or email us at lawyers@tinsdills.co.uk.[/vc_column_text][/vc_column][/vc_row]
Let’s face it, there are more cheerful things to think about than what happens to our assets when we die, and the thought of making a Will can seem quite a daunting process.
However, making a Will creates clarity and peace of mind both for you and those you leave behind, and with the right help the process can be simple and stress-free.
If you’re looking to write a Will, here are ten things that you should definitely consider:
1. What are your assets?
Before making your Will, you should take some time to consider and write down what the assets of your estate are, and their values. For example, this could include property, savings, investments, life policies and personal possessions. This exercise can be very helpful ahead of a meeting with your solicitor, as some financial or tax planning needs to be carried out as part of the Will making process. It will also help you to consider whether you want to make specific gifts or other arrangements relating to individual assets.
2. Who do you want to benefit under your Will?
This will depend upon your personal circumstances, but you need to consider whether any potential beneficiaries might need special consideration due to their age, vulnerability or other circumstances. It is also possible to grant rights over your assets for one beneficiary, but then have the asset pass to another beneficiary when those rights end. This can be particularly useful for property arrangements.
3. Who do you want to deal with your estate?
The Executors that you appoint in your Will are responsible for the administration of your estate and carrying out your wishes. You need to think carefully about who you appoint to this role as your executors need to be trustworthy and reliable, in order to guarantee that your wishes are properly carried out. If your estate is likely to be difficult or contentious, you may need to consider independent or professional executors. If you are leaving any part of your estate to someone who could be under 18 at the date of your death, or any other trust provision, you need to consider appointing at least two trustees to hold those assets in the terms of your Will.
4. Guardians
Although we all hope that it will never be necessary for Guardians appointed in our Will to act in said role, it is crucial to note that the decision of who to appoint is arguably the most important in writing your Will.
If you have children who could be under the age of 18 at the date of your death, then you should appoint guardians to look after them after your death until they reach the age of 18. The Guardians appointed under your Will take on parental responsibility for your children and therefore you need to consider this role and responsibility very carefully.
5. Inheritance tax
Once you have provided details of your assets, your solicitor will be able to advise you on whether there will be inheritance tax payable on your estate and if so, what you can do to reduce the tax bill.
6. Third-party threats
When you leave any part of your estate to a beneficiary, that inheritance then becomes part of the beneficiaries’ own estate for all purposes. This can leave the inheritance vulnerable to third-party threat, for example, from divorce, bankruptcy, poor decision-making, etc. If you are concerned about these third-party threats then it may be possible to safeguard part of your estate through the use of trusts.
7. Changes in circumstances
Are there any foreseeable changes to your circumstances that might alter the terms of making a Will? If so, you might need to build some flexibility into the Will, and trusts are often used to provide protection and flexibility.
Marriage and remarriage will automatically revoke (cancel) your Will unless it specifically states intentions to the contrary. A divorce won’t automatically revoke your will, but it can alter the terms of any will you have in place.
8. Proper signing and witnessing
Your Will isn’t valid until it is properly signed and witnessed. A Will that hasn’t been signed and witnessed correctly may be invalid or open to challenge.
9. Let people know
Once you have made your Will, and in particular if you have appointed someone to the role of Executor, Trustee or Guardian, then it would be sensible to let those people know that you have made a Will, where it is kept, and what role you have given them. It is also important that you keep your paperwork in good order so that your Will and estate assets can be easily identified after your death.
10. Review your Will
It is important that you review your Will periodically to ensure that it continues to reflect your current wishes. It is particularly important to review your Will if you (or any of your beneficiaries, Executor, Trustee or Guardian) have any significant change of circumstances. Even if the circumstances haven’t changed significantly, it is still worthwhile reviewing your Will periodically to keep up to date with changes in the law that might affect you.
The process of making a Will is much easier than you think. If you’re looking to create a Will, we recommend you contact us to have a chat about how we can make the process as simple and stress-free as possible for you. You can telephone us on 01782 652300 or email us at lawyers@tinsdills.co.uk right now.
We’re here to help.
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