Inheritance tax is payable when the value of an estate exceeds the nil rate band. The inheritance tax nil rate band has been £325,000 since 2009 and will remain frozen at this level until 5 April 2015. Inheritance tax is payable at a rate of 40% on the amount over the nil rate band.

Gifts left in a Will to UK charities have been exempt from inheritance tax for many years. However, on 6 April 2012 changes came into effect that reduces the rate of inheritance tax payable by an estate to 36% if at least 10% of the estate is left to charity.

Changes to the inheritance tax rate form part of the Government's 'Big Society' initiative to encourage charitable giving and the Legacy10 campaign launched in November 2011. The aim is to encourage more people to remember charities in their Wills.

In order to qualify for the reduced rate at least 10% of the net value of your estate must be left to a qualifying charity. The net value is the sum of your assets after deducting any debts, liabilities, reliefs, exemptions and the nil rate band. A qualifying charity is one that is recognised as a charity for tax purposes by HM Revenue and Customs (HMRC) and will have a unique charity reference number.

To work out whether the reduced rate applies, your estate and your assets are broken down into three components as follows:

• assets that you own jointly with someone else that pass by 'survivorship'
• assets in trust
• assets that you own outright or as tenants in common with someone else

The tax position for each component may be treated differently and it may be possible to merge one or more components to gain the maximum benefit from the reduced rate of inheritance tax.

You can work out the calculation using the steps detailed below but HMRC’s website has a useful “reduced rate calculator”.

Step 1 - work out which assets fall into each component - remember not all estates have all three components.

Step 2 - add up the assets then deduct any debts, liabilities, reliefs and exemptions that apply to each component.

Step 3 - apportion the Inheritance Tax nil rate band - including any transferable unused nil rate band from a spouse or civil partner - between the number of components being used and any assets classed as ‘gifts with reservation’.

Step 4 - deduct the apportioned value of the nil rate band from each component.

Step 5 - add back in the value of the donation to charity - this result is the 'baseline amount' for each component.

Step 6 - divide the baseline amount by 10.

Step 7 - work out whether the charitable donation is more than the result of the sum at step 6.

The benefit of the changes to a charity in practice will be four times greater than the cost to the estates beneficiary, as HMRC will shoulder the burden of 76 pence for every pound donated, whereas the estate pays only 24 pence. For example, if the gross value of the estate is £500,000 and you deduct the nil rate band of £325,000 that leaves a net value of £175,000 which would be subject to inheritance tax. If there were no charitable gifts left in the Will the total inheritance tax payable at 40% would be £70,000 leaving a final estate balance of £430,000. In the same circumstances, if a charitable gift of £17,500 (10% of the net value of the estate) was made in the Will the total inheritance tax payable under the current 40% rate would be £63,000 leaving a final estate balance of £419,500. However, under the new rate of 36% the total inheritance tax payable would be £56,700 leaving a final estate balance of £425,800. What this shows is that whilst your beneficiaries would receive £4,200 less, HMRC would get £13,300 less tax than before.

If you would like to discuss making changes to your Will in light of the new inheritance tax provisions then please contact Rebecca Goldsworthy on 029 20 222 685 or rg@freedandco.com who will be happy to discuss matters with you.

What does the CQS Mean for Residential and Commercial Conveyancing in Cardiff?

You may be aware that Freed & Co., one of the best and longest-running solicitors in the city of Cardiff, have recently had the honour of being one of the very first Cardiff conveyancing teams to be accredited by the CQS (Conveyancing Quality Scheme). 

The achievement is fantastic news for Freed & Co., for their clients and for the standard of residential and commercial conveyancing, Cardiff wide. To date, only 4 Cardiff firms out of over 100 have earned the right to CQS accreditation. The speed with which we have managed to earn accreditation marks our conveyancing service out as one of the fastest and most efficient in the city. We hope our success will inspire other firms to raise the bar in residential and commercial conveyancing right across Cardiff.   

What Does the CQS Actually Involve in Terms of Residential and Commercial Conveyancing?

To earn a place on the CQS (Conveyancing Quality Scheme) applicants must tick a whole host of very stringent boxes which ultimately prove the following things:

• True Integrity
• Exceptional Practice Management Standards
• Real Prudency & Efficiency

By proving our firm meets these criteria within mere six months, Freed & Co. have distinguished themselves as one of the best and fastest residential and commercial conveyancing solicitors Cardiff has to offer. In order to prove their adherence to these three qualities, conveyancing firms must sign the CQS client charter. The CQS client charter is a list of promises which the firm involved makes to every single client. To ensure the standard of conveyancing in Cardiff and beyond, the charter includes elements like:

• Service that adheres to the high-quality standards of the Conveyancing Quality Scheme
• Clear, prompt, polite, professional, honest and entirely transparent information and advice
• Accurate and up-front costs, explained from the outset

The purpose of this charter is to encourage and reward transparency, speed, efficiency, honesty and high-quality service in the fields of residential and commercial conveyancing. Cardiff is home to many great legal firms and Freed and Co. have demonstrated that they are one of the most efficient, fastest and very best in the region.  

If you would like to learn more about expert residential and commercial conveyancing, Freed & Co. are the solicitors to ask. Freed & Co. can guarantee you expert services delivered quickly and to the highest professional standard. Get in touch with the best residential and commercial conveyancing team Cardiff has to offer by calling 029 2022 2685 today.

We’ve just received some great news here at Freed & Co. We have long been regarded as one of the best firms for conveyancing in Cardiff and now our achievement has been recognised by the Law Society. Having accepted our application, the Law Society has already awarded us a place on the brand new CQS (Conveyancing Quality Scheme).

This is fantastic news, of the hundreds of firms who provide conveyancing in Cardiff, as of November 2011 only four are CQS accredited at this time. The CQS will soon be rolling out UK-wide but the fact that Freed & Co. have been so quick off the mark reveals them to be one of the most exceptional firms for conveyancing .

What is the CQS & What Does it Mean for Conveyancing in Cardiff?

The CQS (Conveyancing Quality Scheme) is a UK-wide scheme designed to reward and encourage high standards, impressive competence and excellent levels of customer service amongst firms offering conveyancing in Cardiff and the rest of the country. In order to be awarded accreditation by the CQS, conveyancing teams must sign both the New Conveyancing Protocol and the Client Service Charter as well as meet very strict, stringent criteria which proves their skill.

The Client Service Charter is a very important document as it promises every single client that the conveyancing solicitor involved will provide:

• Exceptional levels of service, all of which adhere to the codes of conduct outlined in the New Conveyancing Protocol.
• Completely accurate, transparent and informative advice and information, delivered in a manner that ensures the client is completely confident in the processes involved.
• Up-front fees and costs, flagged up and explained from the start.

Meanwhile, the New Conveyancing Protocol is more of an inter-industry document, built to encourage and ensure the requisite high-standards in the world of conveyancing, and the rest of the UK too. Firms will only be accepted onto the CQS if they meet the hundreds of criteria and standards of behaviour laid out in the Protocol. 

As of November 2011 Freed & Co. are one of just four firms offering conveyancing in Cardiff who have already become accredited by the CQS – the impressive speed with which they have achieved this bodes extremely well for the pace and efficiency of their conveyancing service in general.

Here at Freed & Co. we hope our achievement will inspire other firms providing conveyancing in Cardiff to eventually apply and meet these all-important standards laid out by the CQS. A move towards regulated, consistently excellent service will allow conveyancing in Cardiff to flourish, providing top service to all clients who require conveyancing.

Until the CQS rolls out across all conveyancing solicitors, please make sure you always use a firm you can trust when you are looking for conveyancing. Freed & Co. have been providing services for conveyancing in Cardiff for over 35 years and the speed with which they have been accredited by the CQS shows them to be leaders in the local industry. Don’t leave one of the most important transactions of your life to slower, unaccredited firms and instead contact Freed & Co. on 029 2022 2685 today.

Moving home, they say, can be the most stressful experience that you are likely to encounter throughout your life.  We are here to help you through the buying and selling process and this document outlines the various stages of your move.  Here at Freed & Co we are committed to providing help and guidance through every stage.

Before we start we will need you to provide evidence of identification; this is checked in a variety of ways (in common with banks and building societies when opening an account). We will also ask you to instruct us to carry out various tasks on your behalf such as filing a tax return on your purchase.  Please help us by completing and returning the forms that we send you as soon as you can.

Selling

1. Please contact us as soon as you have, or are likely to receive an offer, so that we can carry out the following:-
 (a) Apply for the title deeds from the lender (necessary to enable us to produce the final contract).  
 (b) Give you a breakdown of the costs involved, including a redemption figure in anticipation of redeeming your mortgage. 
 (c) Send you a Sale Questionnaire and Fixtures and Fittings List to complete, this forms part of the contract with the purchaser.

2. A draft contract is sent to the purchaser’s lawyer, together with all the supporting documents.  The contract then has to be approved and once this has happened we will ask you to sign this and other documents so that we are prepared for exchanging contracts.

3. When the purchaser’s lawyer has received the local searches and their client’s mortgage offer and is satisfied as to the title, we will negotiate a completion date and the amount of the deposit with them, taking into account your instructions.  Provided all parties are satisfied contracts can then be exchanged.

4. On the completion date, the property must be vacated and be clear of all your  possessions (other than those which you have agreed to leave) by 12 noon leaving the  keys to the property with the estate agents, unless other arrangements have been made  and agreed to. From the proceeds sent to us by the purchaser’s lawyer we will pay off  the mortgage (if any) and settle the estate agent’s invoice.

Buying

1. When you have made an offer to buy a property, the estate agent may want you to pay a deposit.  Should this happen, this will be allowed for on the financial statement on completion.  Please tell us if you have paid a deposit.

2. As soon as we know that you have made an offer, we will ask you to complete a purchase questionnaire, the answers to which will help us with our enquiries of the seller’s lawyer.  Searches will need to be carried out both for your benefit and to satisfy your lender so you will be asked to send us a payment to enable us to carry these out.

3. The seller’s lawyer will send us the draft contact. As soon as we receive this we will:-

 (i) Apply for searches as appropriate.

 (ii) Examine the contract and title.  We may feel it necessary to raise additional enquiries of the seller’s lawyer.  When we are satisfied that all is in order, we will send one copy of the contract to the seller’s lawyer and retain one copy for you to sign.

4. Where borrowing is required to buy the property, the mortgage offer must be received from the lender in advance of exchange of contracts.

5. If you are arranging any new life policies, we must have received acceptance of risk from the insurers before exchange of contracts.

6. When we have received all the requested searches, offer of mortgage and have satisfied ourselves as to the title, we will write to you detailing the terms of the mortgage (if there is one), the results of the searches and details of the title (covenants and leases where appropriate) and ask you to sign the contract and mortgage deed.  The amount agreed as a deposit on exchange will need to be received and cleared before exchange of contracts can be carried out.  Where there is a related sale we will normally be able to arrange for the amount received from your buyers to be taken as a deposit on your purchase and subsequently it passes up the chain where appropriate.

Exchange of Contracts

1. We are now ready to exchange contracts. However it may be that there are other people involved in a chain - in other words your seller is buying a property in which someone resides who requires to purchase another property.  Your buyer may also be involved in a chain. This is where it gets complicated as everyone wants to move in and complete their sale and purchase on the same day so as to avoid any “bridging” finance.  This is where we come in, we arrange and organise the completion date that will suit all parties.  This sometimes means that the date that you would like to move on cannot be met. This is because we have to wait for everyone in the chain to have gone through the same process as you, i.e. that they have:
 (i) A mortgage (where appropriate)
 (ii) The required searches have been carried out
 (iii) The title and contract has been approved
 (iv) A completion date or dates have been suggested

Obviously it is not always possible to arrange a date that is satisfactory to everyone.  However we will do our best and will be in constant contact with the estate agents and lawyers until the completion date has been agreed and exchange is carried out.

2. When exchange has taken place, the completion date is legally binding (your buyer would lose at least their deposit if they did not proceed) so you can now go ahead and arrange your move.   Below are some of the things that you will need to deal with:-

• Arrange contents and buildings insurance (we can provide a quote for this).
• Contact the following and arrange for meters to be read and accounts transferred to your new address where appropriate:-
    - Gas
    - Water
    - Electricity
    - Telephone/cable services
    - Book the removal van.
   
• Cancel Standing Order for Mortgage payments, after exchange of contracts
• Notify local authority of move and ask for council tax to be apportioned to the date of moving.
• Notify the following of the change of address
    - Insurance/Assurance companies  
    - National Savings/Premium Bonds
    - Banks and Building Societies
    - Employer  
    - Schools
    - Doctor and Dentist     
    - DVLA      
    - friends and relatives
    - Make arrangements for family/friends to look after any children and pets on the moving day!
• Contact Post Office for mail to be re-directed

Completion

1. We will send you a statement of account showing you all the monies received and paid out.  Where there is a balance required to complete we will need to have this four days before the day of completion.

2. On completion day, if you have a related sale, we have to wait for the buyer’s lawyer to transfer the sale money before we in turn, can send the money to your purchaser’s lawyer. For this reason it is unusual for the keys to be available for your new purchase until lunch-time on the day of completion.  Please contact us before vacating your old house to ensure that it is in order for you to move. Where there is just a purchase it is normal for us to transfer the money early in the day, however you are unlikely to receive the keys before midday as you have to allow time for the buyer to vacate the property.

Finally

We hope you will have found this guide helpful.  If at any time you have a problem or are worried about anything please contact us.  We are proud of our service and if you are, then please recommend us to your family, friends and colleagues!

Paying a solicitor for conveyancing on an hourly rate can be dangerous. That is why we offer a guaranteed set fee for conveyancing, giving you peace of mind.

Earlier this year the Ministry of Justice carried out research on Conveyancing Fees and their methods of calculation.

In the last 3 years, 31% of people who moved home obtained an estimate of their legal fees from their Conveyancing Solicitor.  Of those, 61% obtained fixed fee quotations, whilst 4% were charged on an hourly rate.

4% of those surveyed did not bother to obtain an estimate from their Conveyancing Solicitor before proceeding.

Surprisingly, 30% of people were willing to accept a Conveyancing Estimate rather than a formal Conveyancing Quotation from their solicitors.

Whilst some Conveyancing Solicitors might argue that it is impossible to predict what complications might occur during the transaction, and therefore the level of work involved in the transaction, Freed & Co are experienced enough to provide a guaranteed set fee at the outset for any conceivable additional work which might occur.

It goes without saying that agreeing an hourly charge is unnecessary, outdated and dangerous.

So there you have it.

It’s an easy decision to make; why accept an estimate when with Freed & Co you can have the comfort and piece of mind of a fixed fee and a guarantee of no hidden extras.

TIP 1

Try to make sure you are NOT required to sublet at teh same or higher rent than you pay.  You should not be limited other than by reference to the market rent at the time of subletting.

TIP 2

Ask your Landlord to reflect the flexibility you require in the sharing provisions of the lease.  This probably means you must not create a tenancy for your supplier. 

TIP 3

Make sure your Landlord, including any superior Landlords, is required to give consent within a defined (and short) period of time and that he is not allowed to refuse without good reason.

TIP 4

Ask the Landlord to limit his requirement for an Authorised Guarantee Agreement (AGA) to those cases where your proposed buyer (assignee) is financially weaker than you are at the date of assignment.  Ask the Landlord to include provisions that will allow you to cancel the Guarantee if defined conditions are met and/or after an agreed period.

TIP 5

Try to agree alternative conditions to avoid you having to enter into an Authorised Guarantee Agreement for example by having the new tenant pay a rent deposit.

TIP 5

Try to make sure the only precondition for assignment is obtaining the Landlord's consent in writing and that the Landlord may not unreasonably withhold or delay giving his consent.

Taken from The Code for Leasing Business Premises in England and Wales 2007 www.leasingbusinesspremises.co.uk

For further information on subletting and assignments, please contact Jeffrey Freed jlf@freedandco.com

In October, the Treasury announced changes to pensions tax relief.  The annual allowance for tax-privileged pension saving will be reduced from £255,000 to £50,000 from April 2011, and the lifetime allowance from £1.8m to £1.5m from April 2012. 

The change is targeted at those who make the most significant pension savings; an annual allowance of £50,000 will affect 100,000 pension savers, 80% of whom will have incomes over £100,000.  To protect indivduals who exceed the annual allowance due to one-off 'spike' in accrual, the government will allow individuals to offset this against unused allowance from previous years.

www.hmrc.gov.uk

TIP 1

Check that you understand the basis on which the rent can be changed. Can the rent go down as well as up? You should see if the Landlord is prepared to allow upward or downward rent reviews and if not, you should consider asking for a break option exercisable only by the tenant.

TIP 2

Make sure that the interest rate on the difference is no higher than bank base rate.  Try to introduce a provision whereby te Landlord forfeits interest on the difference if he/she does not initiate the rent review process prior to the review date.

TIP 3

Avoid strict time limits in the rent review clause (other than referred to in Tip 2) - those could result in you losing the ability to negotiate.

Taken from The Code for Leasing Business Premises in England and Wales 2007

For further information on rent review, please contact Jeffrey Freed jlf@freedandco.com

TIP 1

Make sure you understand every term and condition in the offer including the total cost until the lease ends and ask the Landlord or the Landlord's representative to confirm in writing that the offer meets the Lease Code for Leasing Business Premises in England and Wales 2007.

TIP 2

Make sure the offer clearly shows the extent of the property, with the boundaries clearly marked on plan and the floor area noted, together with all means of access or areas you must share with other occupiers, any limitation of hours of use, any restrictions in the type of use, any legal or planning limitations or obligations that come with the property.

TIP 3

Make sure the offer sets out clearly who the Landlord is, together with any superior landlords, and assume that any Landlord will sell his interest to someone else and that you will have to deal with the new owner.

TIP 4

Request written responses from the Landlord, where you expect to need to rely on them.  Check that all things which are important to you and your business have been accurately written down in the Heads of Terms and documented in the lease.

TIP 5

Make sure that the Landlord provides you with a Heads of Terms which clearly sets out all of the terms of the proposed lease.  The terms should include details such as the length of the lease, rent review terms, break options, repairing liabilities and all other matters agreed with the Landlord.  If you are not happy with the terms which the Landlord offer you, you should instruct a solicitor to negotiate on your behalf more tenant friendly terms.  You should refer to the model Heads of Terms in the Leasing Code.

TIP 6

Always ask the Landlord whether the lease has 1954 Act protection.  The 1954 Act guarantees security of tenure and the statutory right to renew your lease at the end of the term.  If the 1954 Act is excluded, you will have to vacate the premises at the end of the term.

Taken from The Code for Leasing Business Premises in England and Wales 2007 www.leasingbusinesspremises.co.uk

For further information on negotiations with Landlords, please contact Jeffrey Freed jlf@freedandco.com

TIP 1

It may be helpful to use a checklist so that you can ask the Landlord to be explicit about costs and obligations in the Lease.  The checklist should include:

• the rent
• VAT
• rates
• service charges
• insurance
• utilities
• repairs/dilapidations
• fitting out/alterations

You should ask the Landlord:

• who pays?
• How often? How much?
• What is the occupier's cost each year?
• If this cost is not fixed, what does it depend on?

TIP 2

Keep thinking of the deposit as your money and demand that interest on it is accrued at a fair rate.  Ask the Landlord to make sure that it is held in an account that belongs to you (escrow or stakeholder account) in case the Landlord becomes insolvent.  Thoughout the term of the lease, make sure you obtain statements from the Landlord to confirm that the money is still in the account and that all interest earned has been paid to you or, if required by the lease, has been held on your behalf within the account.  Check that your deposit will be transferred to the new Landlord if the Landlord sells the property to another owner.

TIP 3

Make sure you know when and how you can get your deposit back, such as when you no longer have an interest or have satisfied agreed conditions.

TIP 4

Think of any guarantees as if it WILL be called on the first day of the lease; what would be the personal consequences for you? Can you afford it?

Taken from The Code for Leasing Business Premises in England and Wales 2007 www.leasingbusinesspremises.co.uk

For further information on financial matters, please contact Jeffrey Freed jlf@freedandco.com