Estate Planning Update

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Estate Planning

Spring hasn’t sprung quite yet, but changes in the area of Wills and Probate and Estate Planning are upon us. Rebecca Austin is a Wills and Probate Solicitor based at our office in Chapel Allerton. Here, Rebecca highlights both an upcoming rule amendment as well as a court case that could result in some alterations of its own.

Finance Act 2016 and Inheritance Tax

An additional nil-rate band for inheritance tax is introduced when a property included as part of an estate is passed upon a person’s death to a direct descendant (i.e. children and grandchildren).

This will apply in respect of deaths which occur on or after 6 April 2017. The Government have said that the new rate will also apply if a person downsized their property after 7 July 2015.

Initially, the rate will be £100,000 for 2017 to 2018, and will increase yearly thereafter.

Cohabiting partners and pension rights

Recently, the Supreme Court ruled that a cohabitee was entitled to a deceased partner’s pension. Denise Brewster had been with her partner for 10 years, and they had in fact become engaged two days’ prior to his death.

William McMullan’s (public sector) pension provider stipulated that members had to nominate cohabiting partners in order for them to be eligible for a survivor’s pension. This stipulation was in line with the requirements of the Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2009.

The provider would not pay the pension to Ms Brewster, on the basis that it had not received the necessary form, and so she was denied the benefit.

The five Justices deciding the case all said that the requirement for such a nomination form should be removed.

What does this mean going forward? Although the Supreme Court’s ruling related only those schemes operating in Northern Ireland, the rule which was singled out in the case affects millions of similar schemes across the UK.

Essentially, the Court is saying that cohabitees should not be discriminated against in relation to pensions, just because of their marital status. Public sector pension providers across the UK may well be undertaking urgent reviews to take account of the decision in the Brewster case, before a change in the law forces them to do so.

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