Transferable Nil Rate Band

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    We will all be aware of the impact of Alistair Darling’s change to the treatment of the Nil Rate Band between married couples and civil partners. We have all seen the headlines talking about the ‘joint allowance’ of £624,000 available from 6 April.

    Now that the dust has settled a little and we start to look at the practicalities of the situation it is clear that all is not as simple or straightforward as the headlines suggest.

    Indeed, anyone charged with the responsibility of being an executor and in a position to submit a claim may find themselves in a difficult position. Therein lies an opportunity for all Will writers…….read on.

    Firstly, lets get one thing clear. The benefit of any unused nil rate band from a deceased spouse/civil partner is not automatic – it must be claimed. This value of the claim may be as high as £124,800 of course – and more in years to come.

    Therein lies the first concern. The Revenue is being asked to forego a substantial sum of tax. That makes the correct completion of the documentation (Form 216) extremely important.

    It is fair to say that we can expect the Revenue to look at each claim quite closely given the sums involved. It will be to their considerable benefit of course to disallow a claim.

    Okay, you may say, ‘it’s just a claim form’ – and you would be correct. But have a look at it; consider the position of the executor who has to sign the document to say that the answers to the questions are all correct. The form is available on-line: http://www.hmrc.gov.uk/cto/iht216.pdf

    Consider the questions that the executor has to answer – accurately. Take question 4 for example. What lifetime gifts did the deceased make in the 7 years prior to death? Now it is possible that the former spouse may have died 10 years ago – the executor needs to be able to go back 17 years to be answer the question – how does he or she do that? After all, the person who may have been best placed to help (i.e. the surviving spouse/civil partner) has just died.

    Now we get to the opportunity – the opportunity to provide a valuable service to your clients, and of course, charge a fee for it. Quite simply, the time to get all of the information together, to get a written statement from the surviving partner, is when they are still alive.

    What better can an executor hope for than all of the documents required, plus a statement signed by the surviving spouse confirming the information needed to complete the claim?

    They can then sign the claim with a high degree of confidence that, if the Revenue do decide to query or challenge the claim, they have some evidence to support them.

    To summarise therefore, you have an opportunity. In your client bank you will have individuals who have been widowed. Now is the time to go and see them and offer them the opportunity to be certain that their heirs will benefit from Mr Darlings dalliance. How much you charge is up to you!

    Against that background, we can begin to understand the responsibility on the shoulders of the executor and why the inclusion of a professional executor may be vital.

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    Matt Walkden Will Writer

    About Matt Walkden

    I am a Professional Will Writer and I offer a small number of other products that complement my Will Writing such as Lasting Power of Attorneys (LPA’s), Fixed Price Estate Administration, often called Probate and some Property Products such as changing a family home from Joint owners to Tenants in Common.

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