Monthly Archives: June 2019

This research should serve as a good reminder to everyone that it is important that your family and professional advisors know what funds you have in what accounts. Should the unthinkable happen tomorrow, would your executors know what monies they must account for, and possibly pay tax on?Lack of certainty can have a number of impacts. For one thing, executors are under a duty to account to HMRC for tax due to the date of death and during the administration period. However, should further funds come to light at a later date this will drag out the administration process. In addition, small sums held in bank accounts can be applied towards the estate’s inheritance tax; banks will often release small sums without requiring a grant of probate which, in a catch-22 scenario, the Probate Registry will not release until inheritance tax has been paid.These undiscovered sums are also monies that should be passed to the relevant beneficiaries under the deceased’s Will, or according to the intestacy rules if the deceased died without a Will. If those funds are substantial, they may represent a valuable benefit to that recipient rather than languishing in an account.Clients should make the lives of their executors and professional advisors as straightforward as possible and provide them with a schedule of their assets, including details such as the names of third party account holders and any relevant account numbers. As and when these details change it can be very useful to provide an updated schedule, for example at an annual estate planning meeting.

Johnson’s announcement of his proposed tax cut is certainly grabbing the headlines but it is worth pausing to reflect on the ways it might impact professional advisors and their clients.Journalists quick out of the gates this morning have estimated that raising the threshold at which 40% income tax is paid from £50,000 to £80,000 will save an individual earning £80,000 per year around £3,000. Indeed, for pensioners the cut could be even more beneficial, with estimated savings of up to £6,000 due to the fact that pensioners will not be liable for the increase in National Insurance which is feted to accompany the cut to help pay for it.With more take-home pay in their pockets, tax payers may feel less inclined to take advantage of tax mitigation opportunities such as Gift Aid or maximising their pension contributions.One can be confident that Mr Johnson and his team have rigorously focus-grouped the proposed plan, but it is worth noting that the tax cut is not being achieved by lowering the income tax rates, which Mr Johnson’s rival for the Conservative leadership Dominc Raab suggested only last month, but instead raising the threshold at which higher rate income tax is paid.