Posted on: 7th May 2020
While we continue to spend our days at home, tidying up your finances may be one of the many things you have added to your list of tasks to help keep yourself busy. We have previously spoken about spring cleaning your finances, but this week we will dive into specifics and guide you in organising finances and investments.
Tidying up your finances – LPAs
If you haven’t already, you may want to consider arranging your Lasting Power of Attorney (LPA). You can set this up directly with the office of the Public Guardian for £82 each and can be created for Health and Welfare and Property and Financial Affairs.
The Property and Financial Affairs LPA, in particular, can enable an attorney to manage a bank or building society account, pay your bills, collect benefits, or, or sell a home if a family member is incapacitated for some time.
It can take up to 10 weeks to register an LPA with the Office of Public Guardian. Given the current circumstances, it is understandable if you lack confidence about this timeline. Therefore, you may wish to arrange this as soon as possible.
For those with a will, you may want to check when it was last reviewed or updated. Remember, a divorce will not nullify a will unless stated. If the will does not specify whether a change of circumstance will affect the agreement, intestacy rules may apply.
How an estate is divided may not meet what you wished for. To avoid this now is the time to ensure the will matches the desires for your estate.
Though it may be difficult to provide a witness at this time, there are currently alternative methods currently under practice such as video conference calls.
Death benefit nominations
Another area you may wish to look into is whether now is the time to update your pension death benefit nominations. Again, this is particularly important for divorcees, but anyone who wishes to add another nomination can look into this.
Inheritance Tax Liability is sometimes a task that people put off for as long as they can.
Some may have learned that their net estate does not qualify for all of the Residence Nil Rate Band (RNRB) that is available. This is because it exceeds the £2 million thresholds, which is wear tapering begins – reaching £2.35 million for an individual and £2.7 million for those who are married or in a civil partnership.
Whatever is included or excluded from the RNRB will come down to who owns the asset. As soon as an item is gifted, the donor (or settler should you use a trust) is no longer the owner of the asset. It has been given away, meaning that the gift will then reduce the RNRB assessable estate.
However, if theis not gifted, a Business Property Relief (BPR) will always remain in the assessable Estate as the investor still personally owns the .
Changes to the UK tax regime
Looking to the future, we can expect to see notable changes to tax regimes as the government aims to get financially back on track. Though it is too early to see what this new regime may be, we are here to help keep your finances as organised and prepared as possible. If you would like to learn more, or need help organising your finances and investments, get in touch with today.