Archives for July 2014

Will your Estate Pay Inheritance Tax?

The Institute for Fiscal Studies says the number of estates which will be liable to pay Inheritance Tax (“IHT”) will increase by nearly 400% so that in four years time one in ten estates will pay it.

Currently IHT brings the Chancellor of the Exchequer c.£3.5 billion a year. However, according to the Office for Budget Responsibility, the amount of IHT paid will increase in four year’s time to £5.8 billion.

The Inheritance Tax threshold or “Nil Rate Band” is the value of an estate before IHT becomes payable. The current Nil Rate Band is £325,000 which was set in 2009 – that’s about the average price of a detached house in Wells or Frome.

If the value of an estate (including any assets held in trust and gifts made within seven years of death) is more than the Nil Rate Band then IHT will be payable. This is currently set at a rate of 40%.

With the introduction of the “Transferable Nil Rate Band” between married couples and civil partners in 2007 the number of estates paying IHT fell. As property prices also decreased many estates avoided IHT. However, as house prices are set to continue to rise and the Nil Rate Band has been frozen at its 2009 level for the next four years, many more families are now more likely to be caught by the IHT net.

Planning your estate allows you to consider whether IHT is likely to be payable and if there are reliefs and exemptions which may be available to reduce the IHT liability. Having a Will and reviewing it regularly can ensure that your estate is tax efficient. In addition, it will also ensure that your loved ones know how you would like your estate administered.

At Harris + Harris we aim to help you make the right decisions, at the right time. We have experienced solicitors in both our Wells and Frome offices who can make sure your Will has the effect you intend, and that Inheritance Tax is minimised.

For more analysis of the anticipated increase of estates paying IHT see: Middle class families braced for inheritance tax time bomb

Contact Joshua Eva in Wells or Caroline Fletcher in Frome.

“15 Minute Wonders” 27 November 2014

On 27 November Neil Howlett of Harris is one of the experts providing “15 Minute Wonders” from 3-5.30pm at Frome Rugby Club. This is a brilliant concept started by South West FD which brings together five speakers (including three from Frome) on a range of topics relevant to business owners, directors and entrepreneurs. The trick is that they each have only 15 very focused minutes to give you all the relevant information you need without any the waffle! Come along and learn something valuable for free.

      • Neil Howlett will talk on Intellectual property – what you need to do  This will probably include Albert Einstein, the Rolling Stones or a sweater (possibly two) – if you don’t know why they are important you need to come.
      • Online Security Basics: conducting banking and accounting online safely from Adam Harling at Netitude;
      • Jenna Yhearm from Gumption Social Media on A guide to using LinkedIn for you and your business; and
      • Future Business with Jerry Davison;
      • Using alternative finance to increase working capital from Tim Jones at Start Point Finance;

This is a free event. There is more information, event timetable and booking link on the South West FD website.

Flexible Working – Does it work?

All employees who have worked for an organisation for more than 26 weeks now have the right to request flexible working arrangements. This includes part-time working, flexitime, job sharing, shift working or homeworking.

This is a much wider right than was available previously. It remains only a right to request and only once every 12 months. The old prescriptive rules on how to deal with such requests are gone; requests have to be considered in a reasonable manner and within a reasonable time. ACAS has produced a Code of Practice and Guidance for employers to help them understand the changes and how to handle requests in a reasonable manner.

Employers can refuse requests if granting the request would have an adverse impact on the business based on one of the business reasons set out in the legislation. These are: the burden of additional costs, an inability to reorganise work amongst existing staff, an inability to recruit additional staff, a detrimental impact on quality, a detrimental impact on performance, detrimental effect on ability to meet customer demand, insufficient work for the periods the employee proposes to work or a planned structural change to your business.

Although this system is fairly simple employers will need to be very careful about the overlap between a request for flexible working and direct or indirect discrimination. An employee seeking flexible working is supposed to specify the change which is being requested, when it is to come into effect, what effect they think the change would have and how they think any such effect might be dealt with. Employers are only required by this new law to consider requests that do that, and to respond to that specific request, but a failure to consider a request that doesn’t meet those criteria or a refusal of one that does may still result in a claim of Discrimination under the Equality Act 2010. Compensation for breach of the Flexible Working Regulations is capped at £4,000; compensation for Discrimination is unlimited. Remember that protected characteristics are wide: race, disability, age, sexual orientation or religion or belief, and part-timers should be treated equally with full timers.

There will also be challenges where several employees request flexible working; ACAS recognises that may require an employer to choose between them, though not many employers are likely to take up the suggestion of drawing names out of a hat! Remember too that health & safety obligations continue for employees who work at home.

Flexible working can work for both employers and employees. Here at Harris & Harris we have many years’ experience of partners and staff at all levels working part-time and job sharing – more than 40% of us work “flexible hours”, including many who by choice work less than 5 days a week. It requires flexibility on both sides, but it enables us to recruit and retain good people so it’s worth the effort.

For advice please contact Neil Howlett or Andy Hambleton.