Preserve it and save: how conditional exemption can protect your heritage... and your wallet

According to the PDSA’s 2024 report on pet populations, over 51% of UK adults currently own a pet.  To many their pets are not “just pets”, but beloved family members and a core part of their family unit.  If something unforeseen should happen in the future, most would want the best for their pets.  Often, however, when an unplanned major live event happens, such as a divorce or the death of a pet owner, thought has not been given to what should happen to the pets.

While the Autumn Budget brought tax rises and gloom for some, it delivered relief and comfort to the victims and families of the Infected Blood Scandal, as the Chancellor Rachel Reeves announced that she would “exempt all payments from the Infected Blood scheme from inheritance tax (‘IHT’) regardless of the circumstances in which those payments are passed down”. This decision finally resolves a longstanding technical ‘secondary transfer’ flaw that had created a secondary injustice for affected families. The changes ensure that compensation awarded for a public failure will no longer be diminished by unfair taxation.

The valuation of personal assets—such as artwork, antiques, and jewellery—is a critical consideration in a range of legal, financial, and estate planning contexts. Whether prompted by divorce, inheritance, insurance, or general curiosity, an accurate and defensible valuation is essential. The process, however, is nuanced and requires careful attention to both methodology and documentation to ensure that valuations withstand scrutiny by courts, auction houses, or tax authorities.

Making gifts on behalf of a protected party (“P”) can be seen as carrying out their wishes and feelings and/or helping a person closely connected or related to them. However, an attorney/deputy has specific powers which do not extend to making all types of gifts unless authorised by the Court of Protection. If an unauthorised gift is made, the attorney/deputy may face severe penalties including removal of their role, order to immediately return the funds/gift or referral to the police. It is important therefore that the correct procedure is followed before making a gift. The Office of the Public Guardian (“OPG”) recently issued updated guidance about making gifts, which we consider in this blog. The guidance applies to both attorneys and deputies. Reference to deputies in this blog also includes attorneys.

Is your camel’s back broken yet?  Or will this year’s Autumn Budget be the proverbial last straw?

Rachel Reeves’ Autumn Budget in 2024 not only brought in an immediate increase to capital gains tax (CGT) rates, but also announced a swathe of changes to the taxation of international individuals which mostly took effect on the 6th April this year. 

A YouGov poll* commissioned by law firm Kingsley Napley shows 54% - over half of the British public - now want a complete abolition of Inheritance Tax (IHT), up from 49% a year ago.

With significant changes to Inheritance Tax (IHT) reliefs for agricultural and business property due to take effect in approximately seven months, affected individuals are exploring every available planning strategy to mitigate the impact. For those who are asset-rich but cash-poor, the prospect of a 20% IHT charge on death is deeply concerning and threatens the continuity of long-held family assets.

The English trust has a fascinating history. It dates back to medieval times, when knights heading off on crusade would hand over their land to someone they trusted to manage it in their absence. This practice laid the foundation for what we now know as the legal split between ownership and benefit: trustees hold the legal title, but the real value belongs to the beneficiaries.

There have been a flurry of media reports that the Treasury is considering changes to the IHT regime at the next Budget in the form of a gifting cap or amending the tapering rules on gifting. The reports make clear nothing has been decided but the kite-flying will no doubt focus minds on estate planning in the weeks ahead.  

In this blog we consider whether a pre-nuptial agreement is a good option to help protect the estates of vulnerable individuals in the event that their marriage should come to an end.

This case study highlights the inspiring journey of a young man, Louis who was born with cerebral palsy (CP) and with the support of his Deputy, Deputyship team and family has transformed his passion for dogs into a small business, overcoming numerous challenges and creating a successful venture. His story not only exemplifies the power of perseverance and support but also showcases how individuals with disabilities can thrive in the business world with the right resources and mindset.

The Child Brain Injury Trust reports that every 90 seconds, someone in the UK is admitted to hospital with an acquired brain injury, and every 15 minutes, a child in the UK acquires a brain injury. While many will make a full recovery, for others, this may impact on their ability to make certain decisions as adults.

The increase in the value of cryptoassets has undoubtedly contributed to the continued interest and adoption of this still relatively new asset class across organisations and individuals. The ease of purchasing, selling or transferring a cryptoasset has improved significantly over the last few years (and which has in part stemmed from the development of the regulatory environment). However, there is still a technical barrier to entry. This presents a practical problem; if your assets pass to your loved ones on your death, how do you ensure that they are able to actually access and benefit from any cryptoassets that you hold?

Having poured blood, sweat and tears, not to mention money and time, into building a successful business, the loss of mental capacity of a shareholder, director or partner could be devastating for a business and that person’s wider family unless the necessary safeguards are put in place for these key individuals.

As a business owner, you need to think about what would happen to your business if you were unable to make decisions – would someone be able to authorise payments or enter into contracts and keep the business running day-to-day? If not, fundamental business decisions may not be possible and, within a very short period of time, the business may no longer be able to trade. This can have adverse consequences for your family finances if they are reliant on income from the business.

As family lawyers, we are used to meeting our clients at a time when they are at their most vulnerable. This is intensified when addiction is present within a family. Divorce or separation places an added burden upon everyone involved and those individuals are likely to have experienced or still be experiencing the destruction that addiction can cause, some of it obvious and some of it less so.

Being alive to the particular challenges which may present themselves in a divorce involving addiction is essential but this should be balanced with an understanding that the issues are likely to be different for each client and for each family.   

We increasingly encounter situations where a vulnerable person may have been financially abused by a third party. A recent study by STEP found that financial abuse is increasing and it is most prevalent where there is uncertainty about whether a person lacks capacity or their decision-making ability is in decline.

Supporting a loved one with capacity issues can be very challenging, as well as emotionally distressing. In this article we explore some practical considerations and offer tips and advice to support a loved one in these circumstances.

For a Will to be valid, amongst other things, the person making the Will (known as the “testator”) must be of “sound mind”.

The test for capacity to enter a prenuptial agreement is the same as the normal test for capacity (mentioned in Blog 1) and the individual must be capable of understanding their assets and the nature and effects of the contract they are entering into.

An executor/executrix is a person named in a Will who is responsible for carrying out the instructions in a person's Will and administering their estate. Executors can have a number of responsibilities following someone’s death, including: securing, insuring and clearing the deceased’s property, collecting in all the deceased’s assets, paying outstanding bills, distributing the estate, arranging the funeral and applying for probate.