The new inheritance tax residence nil rate band (RNRB) will be available in the estates of those who die on or after 6 April 2017 provided they leave their interest in their family home to a direct descendant (usually a child or grandchild).
HMRC have produced guidance and 18 case studies explaining points such as the following:
- Basic rules
- How to calculate the RNRB
- How to transfer any unused RNRB to a surviving spouse or civil partner
- How the RNRB applies where the interest in the family home is held in a trust
- How the RNRB is tapered where an estate is worth over £2 million
- What happens if the deceased had downsized
For further information see here and here.
It is important to understand the potential ramifications to charities when taking into account these new rules. Legacy officers will want to know that executors have administered the estate in accordance with the actual terms of the Will and the RNRB calculations.
Unfortunately, the legislation and guidance leave open far more questions than they provide answers and we anticipate that there will be a number of construction issues in the future.
Personal applications for probate online
Personal applicants can now apply for grants of representation online if invited to do so by the relevant probate registry. The Non-Contentious Probate (Amendment) Rules 2016 (SI 2016/972) enabling this came into force on 1 November 2016.
This represents the start of an online system which the Ministry of Justice eventually intends will deal with the whole probate process, from start to finish.
It remains to be seen how much this process will be used initially, but personal applications provide some safeguard against 'accidents' occurring. The concern must be that online applications make fraud more tempting.
STEP Guidance Note: Lasting Powers of Attorney and Deputyship
The Society for Trust and Estate Practitioners (STEP) has published new guidance entitled 'Dealing with a person's property and investing their money – a guide for Attorneys and Deputies'.
Aimed at helping attorneys and deputies themselves, it sets out information on understanding the extent of the Deputyship order or Power of Attorney, together with basic information on the Mental Capacity Act.
It then provides practical guidance on common issues such as use of bank accounts, buying assets from P, occupying P's property or paying for home alterations so that P can live with the attorney/deputy, making gifts, recovering expenses, keeping accounts, investments and deputyship standards.
The guidance is available here.
Legacy officers will want to know that personal representatives are satisfied that whilst the deceased was alive, any attorney or deputy acted appropriately.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.