How Ken Dodd Avoided Inheritance Tax

Last month, the UK said goodbye to a national treasure, as singer and comedian Ken Dodd passed away after a severe chest infection. Two days before his passing, however, he and his partner of forty years, Anne Jones, decided to marry. It has been said that Dodd has “had the last laugh” as doing so would ensure that Anne doesn’t lose £2 million in inheritance tax.  It is important to note that Ken Dodd made a Will leaving his estate to Anne.

What is Inheritance Tax and how much is it?

Inheritance tax (IHT) is a tax on the estate of whoever has died. There are a few circumstances IHT is not paid, such as if the value of your estate is below the threshold of £325,000, you leave everything to your spouse or civil partner or if you leave everything to an exempt beneficiary such as a charity. If the value is above the nil rate band (NRB) of £325,000, then part of your estate above this will be liable for the tax rate at 40%, which is fixed until 2021.

The home allowance, or RNRB, has recently been introduced. This is on top of the nil rate band. In order for this to apply you must pass your home or a share of it to your children or grandchildren.

Given certain conditions are met, the home allowance gives you an additional allowance to be used to lower the IHT against your home. At the moment, the home allowance is £125,000 but is set to rise to £175,000 by 2021 and will be in line with the consumer price index from then on.

Valuing your Estate

To value an estate you must first devise a list of all assets and calculate their value at the date of death, and deduct any debts and liabilities. It is important to keep record of how you calculated it, such as estate agents valuation. HMRC are entitled to request a viewing of the records up to twenty years after IHT is paid.

Assets include banked money, property and land, valuable possessions, insurance policy pay-outs and jointly owned assets. Gifts must also be included, such as cash or other assets, if they were to be given away in the seven years before the individual has passed.  Gifts given to the deceased before this period must also be included if they continued to benefit from it, such as if they were to give their house way but continue to live in it up until death. These are also known as “gifts with reservations of benefit.”

Who Pays Inheritance Tax?

If there is a Will, it will be the executor who arranges to pay the IHT. If not, it will come down to the administrator of the estate. IHT is normally paid from funds within the estate, or from sales of assets if the estate has no cash. There are also times where the deceased has left money in the estate to pay this tax, or may have arranged for a life insurance policy to cover the bill.

When do you pay Inheritance Tax?

IHT must normally be paid within six months of the person’s death. After that there will be an interest charge from HMRC, regardless of if the executor chooses to pay by instalments over the years. If the Asset is sold before IHT is paid, the executors must ensure all instalments and interest are paid by then.

If your estate is likely to incur IHT, it’s ideal for the executor to pay some tax within the first six months of death to avoid paying interest for late payment.

Using Life Insurance to pay Inheritance Tax

Taking out a life insurance policy to pay some or all of your IHT bill can give you peace of mind you’re not passing down a big tax bill to your family and friends when you pass away. If you choose to do this, it is important to ensure you take advice before making any decisions. You will only reduce IHT on your estate if your life insurance policy is written in trust during your lifetime. If not then the policy proceeds will count towards the value of your estate and be liable to IHT on your death.

The importance of having a properly drafted Will

If you die without making a Will, you will die intestate. In these circumstances, your estate may not automatically pass to your spouse in its entirety. The rules relating to inheritance tax are therefore different and your loved ones may end up paying more tax than they would have to had you had a properly drafted Will.

If you have not yet had a Will drafted or your circumstances have changed since your Will was drafted, our specialist Wills & Probate Solicitors can advise you in relation to your Will and the planning of your estate. Should you be unable to travel to one of our offices, Claire and Ivana will be happy to visit you at home. 

Claire Atkinson
Solicitor for the Elderly
1 Anthony Street
Mossley
OL5 0LN
01457 835597
ca@haroldstock.com

Ivana Bailey, Solicitor
56-58 Pole Lane
Failsworth
M35 9PB
0161 682 2400
ib@haroldstock.com


Can you make your own will? More to the point, should you make your own will?

Darren McGuinness, Solicitor at Harold Stock & Co, tackles the issue of wills, whether you can write your own will and, if you do, whether it is legally valid.

One of the most important issues we help people with is forward planning – in some cases very far forward planning! Because there is one sure thing in life, that one day, we will all “pop-our-clogs”. Continue reading…


Claire Atkinson awarded Solicitors for the Elderly Accreditation

 

Solicitors for the Elderly (SFE) accreditation

We are delighted to announce that Claire Atkinson, Solicitor has become a Full Accredited member of Solicitors for the Elderly. Claire is one of only a handful of Solicitors within the Tameside and Stockport areas to be awarded this prestigious accreditation.

Solicitors for the Elderly (SFE) is an independent organisation, made up of solicitors, barristers and legal executives who provide specialist legal advice to elderly and vulnerable people.

Founded in 1999, the SFE was the brainchild of a small group of lawyers who recognised that the UK’s ageing population was leading to an increasing number of enquiries from older clients. Today the organisation has more than a 1000 members nationwide.

To qualify for membership of the SFE, lawyers must have demonstrated their specialist knowledge of a wide range of legal issues affecting elderly people. They also need to have worked with a substantial number of clients in this age group.

Harold Stock & Co can assist you with:

  • Making a Will
  • Lasting Power of Attorney
  • Court of Protection
  • Tax Planning
  • Intestacy
  • Trusts
  • Probate and Estate Administration

For further details of the services we offer, please visit our Wills & Probate Section or contact Claire on 01457 835597. 


Our claim to fame…

A couple of years ago and before my time, we ran an advertising campaign to coincide with Valentine’s Day. You could say this campaign was a success although not necessarily for the right reasons! It has since appeared on a number of lists of the most un-romantic gestures on Ladbible, etc. 

Whilst the poster may not have been to everyone’s taste, it did carry a serious message. Our recent article, What happens if you die without making a will? explained what would happen with your estate should you not make a will or if your will is found to be invalid for some reason. 

I will be the first to admit that there are better ways to treat your loved one on Valentine’s Day than making a will but I would also ask that you give serious consideration to making a will in the near future if you have not already got one or updating your current will if there has been a change in your circumstances.

If you would like to discuss making a will, please contact Claire Atkinson in Mossley on 01457 835597, Ivana Bailey in Failsworth on 0161 682 2400 or Darren McGuinness in Stockport on 0161 456 5012. You can also email info@haroldstock.com

Whatever you are doing today, I wish you all a happy Valentine’s Day. 

Alexandra Newman

Practice Manager


The majority of the public still trust solicitors when it comes to Will writing claims Will Aid

If you’re considering making a Will in order to safeguard and guarantee your family’s long-term future, who’s the best person to consult? The answer is a solicitor. We would say that, wouldn’t we? Yet, this is not a recommendation we’re making for ourselves: this is a recommendation based on a survey by the highly respected organisation Will Aid – a special partnership between the legal profession and 9 of the UK’s best-loved charities. Continue reading…


Ivana Bailey qualifies as a Solicitor

Ivana Bailey 01457 835597 ib@haroldstock.com

Ivana Bailey – Solicitor

Congratulations to Ivana Bailey who has today qualified as a Solicitor.

Ivana’s journey to qualification has been slightly longer than others as she took some time out during her training contract to have her beautiful little boy. 

The final part of Ivana’s training contract has been spent in our Wills and Probate Department and this where she will remain as a qualified Solicitor. Ivana has shown a real passion within this area of law. She has an easy-going and friendly nature which immediately puts clients at ease.  

Recent feedback from Ivana’s clients include the comments:

“Ivana listened to our questions and answered them in terms that we could understand. Very pleasant attitude!”

“Very helpful and understanding. Gave advice where needed.”

“Ivana was very professional and efficient. She explained everything very clearly and the timescale was exactly as she said it would be.”

Ivana is available to see clients at our Mossley, Failsworth or Stockport offices and can also visit you at home should you be unable to attend at our offices. 

 

 


Make a Will for Charity

Why leave things to chance? If you do not currently have a will or yours is out of date, this is exactly what you are doing. It is especially important to make a will if you have children, own property, have savings, or are a business owner.  Continue reading…


Intestacy queries have increased dramatically over the last 5 years claims Age Concern

We all know how important it is to make a Will, don’t we? After all, it’s the only way to ensure that what you leave behind goes to those you want. Making a Will also ensures that there is also no added stress for loved ones in what are already difficult times post-bereavement. Yet it seems that the majority of us are failing to take our responsibilities seriously. According to a recent YouGov survey, nearly two thirds of the UK’s adult population still do not have a Will. Continue reading…


Court of Appeal rules that a divorced partner can challenge his former mother-in- law’s Will

When can you challenge a Will? When do you, in the court’s opinion, have a valid to bring a case and challenge the express wishes of the bereaved? That was the question put before the courts in the recent case of Randall v Randall. The answer, according to the Court of Appeal’s latest decision, is when you have ‘sufficient interest’ in the Will to bring a case. Continue reading…