Archive for May, 2007
Wednesday, May 16th, 2007
Professionals with a significant amount invested in an occupational pension should take the opportunity to investigate how their lump-sum death benefit will affect their next of kin’s inheritance tax (IHT) bill, according to one expert.
Abbey Wealth Management’s Neil MacGillivray has reminded investors that the death benefit is not tax-free, because the debt is deferred to a spouse or civil partner.
Speaking to Citywire, Mr MacGillivray suggested that Britons should consider a "carve-out fund" instead, as a means of protecting money otherwise falling within the net of IHT.
Becoming a member of an occupational scheme, a lump sum is paid into the trust on the death of the settler.
The trustee is then afforded two years to allocate the death benefit without IHT implications.
Mr MacGillivray said: "Although this type of planning can be quite expensive, it is worth it for the potential IHT savings – all sizeable pensions should be part of a trust.
"Advisers who practise in this type of trust will be able to build up strong professional connections with professional trustees."
Recent research by the Halifax revealed that the number of properties exceeding the £300,000 IHT threshold has nearly doubled in the last five years.
Posted in Inheritance Tax | No Comments »
Tuesday, May 15th, 2007
The single survey proposed by Communities Scotland to aid the house-buying process in the country will not remove the need for mortgage lenders to conduct their own surveys.
Such is the view of the Council of Mortgage Lenders (CML) Scotland, which has responded to a paper on the proposed reforms from Communities Scotland today.
The council states that in a number of circumstances, such as when a particular surveyor does not meet with the criteria set by a lender, the mortgage firm would still need to conduct a separate survey – a point which the CML states is ignored in the current consultation.
A separate concern raised by the body was that relationships between estate agents and surveyors should also be transparent.
Kennedy Foster, CML Scotland policy consultant, commented: "We are disappointed that our concerns have not been addressed in the Communities Scotland consultation paper.
"The introduction of the single survey is a massive change to the home buying and selling process in Scotland and we believe more work is needed to ensure the new system is a success."
Single surveys are intended to be implemented as a means of making the house buying and selling process simpler and reduce the number of transactions which fall through.
In February the Law Society of Scotland welcomed the Scottish Executive’s desire to improve the property sale process.
However, Janette Wilson of the organisation’s conveyancing committee commented that it still has "concerns about the proposed form of the single survey [which] may create new problems to replace those that it set out to solve".
Posted in Conveyancing | No Comments »
Monday, May 14th, 2007
A number of alterations made to legislation affecting family law in Scotland last year have resulted in "chaos" for the legal profession, it has been claimed.
The Scottish executive has been accused of failing to fulfil obligations to publicise the changes made to the law, the Herald reports.
Implemented in last spring, the implications of the Family Law (Scotland) Act 2006 remain unfamiliar to much of the Scottish public, the Family Law Association(FLA) Scotland told the publication.
FLA chair Helen Hughes commented: "When a new law is introduced which potentially affects the lives of many, the executive has a responsibility to educate the public on the changes introduced."
She suggested that the changes to the law had not been well publicised despite the executive’s avowed commitment to ensuring public awareness.
"Most clients have no idea what their rights are", Ms Hughes added.
The act includes measures intended to extend the parental responsibilities and rights of unmarried fathers, as well as reducing the length of the separation period for divorce and increasing the rights of unmarried cohabiting couples.
Posted in Family Law | No Comments »
Friday, May 11th, 2007
The Child Support Agency (CSA) is being sued by a single mother who alleges she lost her home due to the "incompetence" of the organisation.
Considered to be a test case that could have implications for thousands of families, the action is being brought by mother-of-three Denise Rowley.
Following her divorce in 2000, Ms Rowley states that she was obliged to live with her family as she was unable to afford the upkeep of her former home without maintenance payments.
Left vacant, the property deteriorated and was subsequently sold at much less than its "real value", raising the question of whether the CSA owes a duty of care to those on whose behalf it claims maintenance.
The English family lawyers’ group Resolution has added its weight to her case because it considers the action "of such significance".
CSA services in Scotland are organised by the Scotland and North East England Business Unit based in Falkirk, one of six units across the UK that attempt to carry out child maintenance assessments for separated families.
Posted in Family Law | No Comments »
Thursday, May 10th, 2007
Property prices across the UK have increased by an average of 170 per cent under the Labour government, research released today indicates.
New figures from the Royal Institution of Chartered Surveyors (Rics) states that Northern Ireland has experienced the largest increases, hitting 240 per cent, while Scotland’s market has been more stable with increases at 140 per cent.
First time buyers looking to purchase a new house are estimated to need to save almost £31,000 in up-front buying costs, Rics asserts, adding that the cost of becoming a home purchaser has reached three times that of a decade ago.
Brian Berry, Rics’ head of public policy, observed: "The government needs to take more action to ensure that house building rises to sufficient levels if it is to make good on its promises to promote an inclusive and sustainable society where the poorest are not priced out of the housing market."
Today the Bank of England’s monetary policy committee announced a further increase in interest rates to 5.5 per cent, which David Stubbs, senior economist at Rics, stated would reinforce the slowdown currently occurring in the housing market.
Posted in Estate Agency | No Comments »
Wednesday, May 9th, 2007
Legal bodies in Scotland have criticised moves by a consumer watchdog to prompt an investigation by the Office of Fair Trading (OFT) into affordable justice in Scotland.
Consumer magazine Which? was reported by the Herald to have put forward a "super complaint" to the OFT this week, suggesting that regulation of the profession in Scotland prevents both competition and sufficient access to affordable representation.
However, the Faculty of Advocates and the Law Society of Scotland have countered the complaint, stating that it was not called for and that more productive would be a discussion of the watchdog’s concerns directly with the profession’s bodies.
The debate follows a decision by the legal profession in Scotland not to follow England and Wales in pursuing the recommendations of the Clementi Review, which allowed non-legal bodies to cooperate with legal firms in the provision of legal services.
Michael Clancy, director of Law Reform at the Law Society of Scotland, commented: "The society has not been sent the complaint, but it is disappointing that Which? has chosen this route to raise these issues instead of working with the society to benefit the Scottish public."
In March, at its annual general meeting, the society discussed ways of combating apparent legal aid "deserts" in Scotland, calling for "hard evidence" that could be presented to the Scottish Executive to address the issue.
Posted in Legal Aid | No Comments »
Tuesday, May 8th, 2007
Proposals for a commercial property development have been put to Stirling Council planners, it has emerged.
Coming on the heels of previous applications to develop the site, the office building and leisure facility complex has been conceived by RJM Development’s Scottish arm.
The site has previously been put under consideration for development by United Auctions, the Stirling Observer reports, but the firm’s bid was turned down because it did not provide details of enhanced road safety measures on a nearby roundabout.
RJM Developments, possibly having learnt from the lessons provided by the previous proposals’ rejection, told the Observer that it was "consulting fully with the relevant authorities" over the plans.
Meanwhile, Stirling Council has granted planning permission for a £10 million auction market in the area to United Auctions.
The planning bid for the property will now be elevated to the Scottish Executive for further consideration.
Posted in Commercial Law | No Comments »
Friday, May 4th, 2007
Consumers need to achieve greater understanding of the risks involve in financial savings and investments, according to the results of a recent survey.
A poll conducted by the Financial Services Consumer Panel suggests that consumers desire a "consistent approach" when having risks associated with financial products explained to them.
This was paired with the observation that most members of the public’s understanding of the details of financial products was low.
John Howard, chairman of the Financial Services Consumer Panel, said: "Most consumers cannot hope to make a sensible decision about buying a financial product without understanding the risks involved.
"The evidence suggests that few consumers do understand the risks, so we believe a practical system of explaining risks which also promotes understanding is a fundamental requirement."
Panel members say that while many investors understand the relationship of risk to reward, few comprehend more complex relationships such as risk to capital.
In March, the organisation welcomed new proposals from the Financial Services Authority regarding the Financial Services Compensation Scheme, which it suggested made the scheme more robust and efficient in its support of consumers.
Posted in Commercial Law | No Comments »
Thursday, May 3rd, 2007
Letting costs in Aberdeen have overtaken those in both Edinburgh and Glasgow, new figures have revealed.
Research compiled by rental company Citylets evaluated letting costs in the first quarter for more than 45,000 properties and found that Aberdeen had overtaken the southern Scottish cities for the first time.
However, the firm made moves to reassure investors in the central belt that the increase reflected improving demand in the highlands city, rather than a dip elsewhere.
Citylet’s data suggested that a one-bedroom flat in Aberdeen is currently rented out for an average of £499 per month, compared with Edinburgh’s £494 and Glasgow’s £434 for similar properties.
The rental cost represents an increase of 18.4 per cent for the Aberdeen market compared with the same period last year.
Managing director of Citylets Thomas Ashdown commented: "I was aware that the rental market in Aberdeen was extremely strong but I must admit to being slightly surprised by just how well it has been performing.
"The fact that it has now overtaken Edinburgh in both rental prices and demand for one and two-bedroom properties is astonishing."
Investors considering whether to purchase a house for buy-to-let reasons in any area may be interested in recent figures from the Bank of England released yesterday.
The bank identified a fall in the number of mortgage approvals in March to an 11-month low, which could suggest that recent interest rates increases have begun to impact on the property market.
Posted in Estate Agency | No Comments »
Wednesday, May 2nd, 2007
Inheritance tax could impact upon many more people than expect to pay following the loss of a loved one, a financial adviser has suggested.
Simon Botfield of Edward Jones, a stock market investment service, has suggested that many people do not appreciate the full value of their estate, which often extends significantly beyond the obvious residence and savings assets.
"Many people don’t realise how much their estate can amount to once everything is taken into account house, car, possessions, business interests, savings, shares, jewellery and so on," Mr Botfield asserted
Tax is currently charges at 40 per cent for all assets exceeding a £300,000 threshold, which the combined value of such assets can easily exceed.
Mr Botfield also reminded consumers that the common assumption that all assets are passed to the nearest and dearest following a death is often not the case.
"But interests can easily be safeguarded by making a will and taking advice," he continued.
"It is simple, inexpensive and can also help limit any inheritance tax liability."
In this year’s budget, chancellor Gordon Brown announced his intention that the threshold for inheritance tax should be increased to £350,000 by 2010.
Posted in Inheritance Tax | No Comments »
