STEP UK News Digest wrap-up – October’s top stories


Head in the clouds? Missed key recent industry news? Welcome to the wrap-up of the top ten most popular stories in the STEP online Digests throughout October as clicked by our readers.

Charity loses challenge to executors’ interpretation of nil-rate band: The executors of Valerie Smith were entitled to interpret the expression ‘nil-rate band’ in her will to include the nil-rate band transferred from her predeceased husband, the England and Wales Court of Appeal has ruled. The court rejected a challenge by the Woodland Trust charity which, as Mrs Smith’s residuary beneficiary, stands to lose a large sum as a result of the decision.

Guidance on NRB discretionary trusts: HM Land Registry has updated its PG70 guidance regarding nil-rate band discretionary trusts in England and Wales

HMRC simplifies system to reclaim or pay tax for bereaved persons: From 13 October 2014, form R27 ‘Reclaiming tax or paying tax when someone dies’ will be removed and replaced: with an automated process for PAYE customers; and with a tailored service for self-assessment customers. HM Revenue and Customs will extract the pay and tax information it needs from Real Time Information, making the form unnecessary.

Protections for executors against unexpected claims: A partner at London law firm Adams & Remers discusses the dangers for personal representatives in distributing an estate against which unresolved claims may still exist – an extreme example being the Jimmy Savile affair.

Abolition of 55 per cent ‘death tax’ is clarified: HM Treasury has circulated a document giving more details on the removal of the 55 per cent tax rate on pensions at death, and pensioners’ improved lifetime access to their funds. It promises measures to cope with pension providers who do not offer drawdown.

The future of forced heirship: Rachel Jones contemplates how England and Wales compare to other European jurisdictions when it comes to forced heirship, and the potential impact of the EU Succession Regulation.

Ombudsman joins call for tougher controls on will-writing: The Legal Ombudsman (LeO) has published a report criticising the poor service provided by many will-writers in both the unregulated and regulated sectors in England and Wales. LeO points to high levels of complaints about service providers’ charges, delays, and failure to explain their responsibilities.

Wealthy beneficiaries entitled to anonymity: The England and Wales High Court has ruled that a court judgment concerning trust beneficiaries must be anonymised before publication in order to protect them from the ‘adverse personal effects’ of their wealth. However, Mr Justice Morgan declared that their privacy and personal security is not a good enough reason for restricting publication.

Effect of Mental Capacity Act 2005 on testamentary capacity: The previously unreported case of Bray v Pearce and Smith examines the precise effect of the Mental Capacity Act 2005 on determination of testamentary capacity.  However, the effect of the 2005 Act has not yet been authoritatively decided.

Changes of the last three years: Law firm Farrer & Co has produced a useful summary of the past three years’ changes to the UK system of residential property taxation. These changes include: the punitive rate of stamp duty and the annual tax on enveloped dwellings imposed on corporate property owners; capital gains tax on the sale of ATED-rated property and the likely extension of CGT to all non-resident owners; the restriction of debt relief from inheritance tax; and the new statutory residence test.

The STEP Industry News Digests provide a round-up of relevant industry news for trust and estate practitioners and other professionals in the wealth management sector. They provide brief summaries of topical news stories gathered from news providers internationally, providing a quick reference for busy practitioners to all the relevant news and issues. The News Digests also feature job listings from our recruitment site and list local STEP branch events and conferences. STEP’s digest services include twice weekly UK and Wealth Structuring (international) editions as well as a bi-weekly North America Digest focusing on the US, Canada and Mexico, and a Latin America Digest.

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