Chancery Law & Tax

08/02/2025

The acting fraternity says 'break a leg' when wishing someone luck, but have you ever considered who would look after your business and finances if you were physically or mentally unable to represent yourself?

Believe or not only 14% of the adult population have a (LPA) Lasting Power of Attorney!

So what does that mean in practice if you suffered an illness, accident, or were simply unable to speak/sign for yourself?

Let's take what happened to me. Two years ago today I suffered a stroke which was brought on as much from stress as my historic s*x n' drugs n' rock n'roll lifestyle 🙃.

For almost 4 months I wasn't able to manage my own business or personal affairs. Yes, I made a good and full recovery, but thankfully the proverbial physician had healed himself, in that I had in place a registered LPA, which my 'Attorney' (in this case my wife) was able to run things on my behalf as if she were me.

Image for a moment if that had been you and neither of us had an LPA?

Then apart from working on your recovery, nothing could be signed, your bank account would be effectively frozen, and your other half or business partner(s) would have had to apply to the Office of the Public Guardian (OPG) who, would appoint a civil servant to administer and run your affairs.

By their very nature, these people are risk averse in the extreme, and are pathologically incapable of making quick, sensible, or business minded decisions. They are also a virtually unaccountable law unto themselves.

As my Jamaican friends say "Babylon"! Meaning, the struggle with a corrupt or oppressive state. That's not to say that the OPG is corrupt, far from it, but it's presence in your life is certainly oppressive and something we could all do well without.

Thankfully, and for very little cost, you can protect yourself, your family, and your business from the State sticking its interfering nose where you don't need it.

LPAs for your property & financial affairs and health & welfare are the most practical common sense thing you can do. Hopefully you'll never need to use either, but for what they cost you might as well protect yourself.

To find out how, email me Tony Gimple at [email protected] or text/WhatsApp me on 07974 099221.

02/02/2025

Don't let 'frightful' Rachel Thieves screw your family out of their rightful inheritance.

If you haven't already written your Will, or are concerned that Liebour's politics of envy will undo your existing one, then reach out to me for a without cost or obligation initial consultation using this link.

https://lnkd.in/d_d3FwZR

PS. If you own your business or are a landlord, then you're an even bigger target.

PPS. Don't forget that you can also ring fence your home from attack by hostile creditors and long-term care costs.

16/12/2024

Long-term care charging – A growing problem.

Although it’s difficult to say with absolute certainty how many family homes have had to be sold to pay for long-term care, one thing is certain, in that we all want to pass on our hard earned and accumulated wealth to the next generation as intact as possible.
Placing the family home in a Protective Trust to shelter it from Long-term care charging.

Placing the family home in a trust is a strategy sometimes used in the UK to protect the home from long-term care charges. However, this approach requires careful planning to comply with legal guidelines and to avoid potential pitfalls such as "deliberate deprivation of assets."

Here’s an overview of how it works and what to consider.

1. Understanding How a Trust Works

• A trust is a legal arrangement where one or more "trustees" hold assets (such as a home) for the benefit of specific "beneficiaries" (for example, your children).

• By placing your home in a trust, you no longer legally own the property; your trustees do. Therefore, in theory, the property should not be included in means testing for care costs, as it is not part of your estate.

2. Types of Trusts for Protecting the Family Home

• Life Interest Trusts:
o This type of trust allows you to retain the right to live in the property during your lifetime, or until a specific event (e.g., moving into a care home).

o After this period, the trust usually stipulates that the home is passed to your beneficiaries. This trust is commonly used when the property is jointly owned with a spouse, helping to protect half the home from being included in the other spouse’s care cost assessment.

• Discretionary Trusts:

o In a discretionary trust, trustees have control over how the assets (in this case, the home) are managed and distributed among the beneficiaries.

o Discretionary trusts provide flexibility, as the trustees can decide who benefits from the trust and when, based on the needs of beneficiaries.

3. Potential Benefits of Placing the Home in a Trust

• Exclusion from Means Testing: If structured correctly, the property may be excluded from means testing since you no longer own it. This could reduce the likelihood that it would be sold to fund care costs.

• Inheritance Planning: Trusts allow you to control who inherits your home and can be a useful tool for passing on assets to the next generation.

4. Challenges and Risks

• Deprivation of Assets Rules: Local authorities can scrutinise the timing and reason for placing your home in a trust. If it appears the trust was created explicitly to avoid care costs, the local authority could invoke "deprivation of assets" rules. This may result in the home being included in the care cost assessment despite being in a trust.

• Costs of Setting Up and Managing a Trust: Establishing a trust involves legal costs, and trustees have a duty to manage the trust according to legal requirements, which can require additional expenses for professional administration.

• Complexity and Tax Implications:

o Depending on the trust type, there may be tax consequences, including Inheritance Tax, Capital Gains Tax, and ongoing trust tax reporting.

o Trusts generally require an annual tax return, and any income generated within the trust could be taxed at higher trust tax rates.

5. When Is It Appropriate to Use a Trust?

• Trusts are more commonly used as part of a comprehensive estate and tax planning strategy rather than solely to avoid care costs.

• If you have broader objectives, such as asset protection for children from a previous marriage, providing for grandchildren, or estate planning, a trust can serve multiple purposes.

6. Seek Professional Advice

• Because of the complexity and potential scrutiny involved, setting up a trust for your home should be done with the guidance of a solicitor or financial advisor specialising in elder care, estate planning, and trust law.

• Advisors can help ensure that the trust is compliant with the law of England & Wales, avoiding the appearance of deliberate deprivation and minimising any adverse tax implications.

7. Alternative Approaches to Consider

• If a trust isn’t appropriate, other approaches such as joint ownership or taking out insurance for care costs may achieve similar goals with fewer potential legal or tax complications.

Summary
While placing the family home in a trust might protect it from care charges under certain circumstances, it’s a complex strategy that requires careful planning and professional advice to avoid issues such as deprivation of assets and unexpected tax implications.

Trusts can be beneficial but are not always guaranteed to shield the home entirely from care costs.

Next steps
For more information about how to ringfence your home and other assets from future hostile creditors including your Local Authority, please contact Tony Gimple at [email protected] to arrange a without cost or obligation initial consultation.

Tony has been involved in the legal, financial and tax arena for over 30-years.

15/12/2024

Have you been left in the lurch by the failed P118 and LT4L schemes?

Are you facing unplanned for and potentially ruinous tax bills as a result?

Would you like to know what your options are and how you might be able to properly incorporate your portfolio in accordance with HMRC guidelines?

If so, then The Entrepreneurs Accountant in association with Chancery Law & Tax, can help.

To book an initial without cost or obligation consultation, please email [email protected] or WhatsApp Tony Gimple on 07974 099221.

09/11/2024

Looking for rapid Bridging or other property debt Finance with completion and money in the bank before Christmas?

Fast service for both smallest and extremely large loans from niche private and large alternative lenders. Widest and deepest expertise and industry relations in quick private direct credit markets, especially from non-bank quick credit sources with proven money-in-the bank profiles.

98% cases approved!

Up to 90% of purchase price!

Terms in as little as 24 hours!

We work with more than 300 quick private direct lenders, including niche family offices and private individual lenders that lend quickly and in flexible manner with money-in-the-bank profiles.

Widest deal size range from £100k up to £3bn

Fast ex*****on
24-hour to term sheets and sometimes 48-72 hours to completion and money transferred.

Highest LTV
Up to 90% of purchase price / 100% refurbishment / extension costs covered.

Affordable
Monthly interest rates could be as low as 0.43% (5.16% APR and additional fees apply) for bridging deals and could be lower for development and term loans.

Get started now and receive terms for your deal in 24 hours!

Contact Tony Gimple at [email protected] or WhatsApp him on 07974 099221.

Secured lending only. The property may be at risk if you fail to maintain the repayments or redeem the loan at the end of the term. Sophisticated borrowers only.

Tony has been involved in the legal, financial and tax arena for over 30-years.

08/11/2024

A necessary evil – the top 10 reasons why claims aren’t paid
By Andy Lees and Tony Gimple of Risk Group UK

According to figures from the FCA, a staggering 23% of claims are rejected by insurers, with some firms refusing to pay some 45%!

The majority of people regard insurance as a necessary evil, and that’s just as true for landlords as it is anyone else. After all, we pay our premiums every year but the first time we need to make a claim it seems as though the insurer is looking for any reason not to flash the cash and/or delay paying up as long as possible.

Truth be told, insurance companies are there to pay claims – that’s the reason they exist – to provide the capital you need when you can otherwise least afford it, i.e. insurance is the one investment that pays the most when you need it the most.

So, why does it sometimes go wrong and we find ourselves fighting a battle that we can least afford?

To help, we’ve compiled a list of the main reasons why claims aren’t paid which also happens to be the most compelling case for not going it alone and instead using the services of an insurance broker whose role is to work for you at time of proposal and in fighting your corner when things go wrong.

Here are the 10 most common reasons for insurers to refuse/reject (repudiate being the technical term) your claim?

1. The policy was not in force when what you are claiming for happened
In most cases policies run for 12 months at a time but its all too easy to miss your renewal date which could lead to a gap in cover. Should that happen, you simply won’t be covered. That might be OK for a minor loss, but if for example there were a fire or flood then you could be left tens if not hundreds of thousands of pounds out of pocket.

2. The policy is invalid because you provided incorrect information
All insurance policies are based on you providing the correct information, but if for example the property in question is an HMO and not a single let, or its owned by a company and not you as an individual, and you fail to disclose that, the insurer would be within their rights to invalidate the policy, these are called material facts and form the basis of any insurance contract.

3. You failed to disclose relevant information when you applied for, or renewed, the policy
Non-disclosure of a material fact is probably the biggest reason for claims being repudiated. Examples could be failing to disclose that you’ve been bankrupt or have made an arrangement with your creditors, the property in question has or is subject to subsidence, you’re letting to asylum seekers, that its subject to a Rent-to-Rent agreement or similar, or that you’ve been refused insurance in the past or had special terms applied.

4. The item is not covered by your policy
Its easy to think that everything is covered, but not everything. Risks such as damage from war, certain natural disasters, damages caused by gradual wear and tear, or the insured property is left unoccupied for extended periods without advising insurers. Terrorism cover is a policy that can be added onto an existing policy but does not come as standard.

5. An exclusion clause means that you cannot claim
Its common practice for insurers to exclude claims arising from the insured not taking reasonable care. Likewise, requiring a claim or notice of breach to be made within a specified time frame, as well as setting a monetary cap on damages or excluding certain types of losses, such as indirect losses or loss of profits are standard exclusions.

6. You failed to update your insurance details when your circumstances changed

No one said that being a landlord was easy, especially if that’s not your fulltime occupation, but you have a legal duty of care to inform the insurer of any change in your circumstances or to the properties you’re insuring as this could influence and underwriters decision towards the risk in question.

7. You have missed some of the instalments of your premium

Any businessman will tell you that cashflow is king, which is why many landlords pay premiums on a monthly basis. Trouble is, if for any reason you fail to pay, the insurer is within their rights to not pay the claim. If you can’t afford to pay on an annual basis, then always opt for a premium finance facility. That way at least, if you do miss a payment, it’s to the finance company and not the insurance company and they can be flexible to your circumstances.

8. You have not followed the claims process correctly
The devil is always in the detail, and insurance companies can be pedantic when it comes to correctly following process. Failing to report incidents promptly or lacking adequate evidence to support a claim can lead to rejection.

9. You have not complied with the policy terms and conditions
All insurance policies contain terms and conditions that you obliged to follow. These can be maintaining the property, including the outside, fixtures, fittings, plumbing, gas, ventilation, and electrical wiring. Another example is water damage, and you may need to take extra care with pipes outside the property or in the loft and ensure that water tanks etc are lagged. Landlords may also need to tell tenants to keep the property at a minimum temperature of 12°C during the winter.

10. You have exaggerated the claim and are trying to claim for more than you should.
Insurance companies and their loss adjusters are pretty switched on, so there’s little point in trying to gild the lily when it comes to a claim. That said, it may be advisable to appoint a loss assessor who works for you and not the insurance company to get the right settlement but the final decision always lies with the insurers.

Summary
There’s a far greater chance that your claim will be disputed if you’ve arranged the insurance yourself as opposed to doing it through an insurance broker, for the simple reason that any broker worth their salt will not only take the time to fully understand your real needs, but they’ll ensure that the cover and the carrier are a perfect match.

One word of warning though, the necessary evil that insurance may be, please don’t be tempted to buy on price alone, as the contingent capital market is an exemplar of that old adage, being that you only get what you pay for; and cheap doesn’t always equal good.

What most people forget, is that an insurance policy is a legally binding contract between you and the insurance company. Both you and they are governed by the Insurance Act 2015 which imposes a range of duties on both parties, not least of which is for all concerned to act in good faith aka uberrimae fidei for the classics’ scholars amongst you.

What next?
To find out more about how Risk Group UK can help you to get your property business back on its feet when disaster strikes, contact Andy Lees Andy Lees [email protected] (07786 707827) or Tony Gimple [email protected] (07974 099221), or visit https://www.riskgroup.uk/.

04/11/2024

How BTL landlords can incorporate their portfolio without incurring Capital Gains Tax (CGT) or Stamp Duty Land Tax (SDLT).

Below, you'll find our brief guide to understanding s162 incorporation relief and its implications for you as a landlord.

Guide to s162 incorporation relief for Buy-to-Let Landlords

Incorporation relief under Section 162 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) can be a valuable tax relief for Buy-to-Let landlords considering incorporating their property portfolio into a company. This relief allows landlords to transfer assets (in this case, rental properties) into a limited company without immediately triggering Capital Gains Tax (CGT) on the asset gains. Instead, the gain is deferred until the shares in the company are eventually sold.

Here’s a guide to understanding this relief and its implications for landlords:

1. Eligibility for Incorporation Relief (S162 TCGA 1992)
For landlords to be eligible for incorporation relief, certain criteria must be met:

• Business Activity: The property portfolio must be considered a “business” for tax purposes. This typically requires a level of involvement that goes beyond simple ownership. HMRC generally expects active management, such as regular tenant interaction, maintenance, repairs, and improvements. Passive investment activities might not qualify.

• Transfer of All Business Assets: All assets related to the business, including the rental properties and potentially related liabilities (like mortgages), must be transferred to the company.

• Transfer in Exchange for Shares: The landlord must receive shares in the company in exchange for transferring the assets. No other form of consideration (like cash) should be given.

2. Benefits of Incorporation for Buy-to-Let Landlords

• Capital Gains Tax Deferral: Instead of triggering an immediate CGT liability when transferring properties, incorporation relief allows the gain to be deferred. The “base cost” of the shares received in exchange is reduced by the deferred gain, meaning CGT is only payable upon the eventual sale of those shares.

• Mortgage Interest Deductibility: Within a corporate structure, mortgage interest can generally be deducted as a business expense. This can be advantageous compared to the restrictions on mortgage interest relief for individuals.

• Tax-Efficient Income: Operating as a company enables the landlord to receive income in the form of dividends, potentially benefiting from lower rates of personal taxation compared to rental income taxed at higher income tax rates.

• Inheritance Tax (IHT) Planning: Shares in a company can be easier to transfer than individual properties, providing flexibility in estate planning.

3. Risks and Considerations

• Stamp Duty Land Tax (SDLT): Incorporation relief does not eliminate the SDLT liability associated with transferring properties into a company. If properties are mortgaged, SDLT will be assessed on the mortgage amount or property value. However, in cases where the portfolio operates as a partnership, there may be SDLT relief available if specific partnership conditions are met.

• Increased Administrative Costs: Operating a company involves additional compliance requirements, such as corporation tax returns, annual accounts, and potentially higher accounting fees.

• Double Taxation: Rental income received by the company will be subject to corporation tax, and any income withdrawn (e.g., dividends) may be subject to additional personal tax. However, the overall tax rate may still be lower, depending on individual circumstances.

4. Steps for Implementing S162 Incorporation Relief

• Seek Professional Valuation: Have a qualified professional
assess the market value of each property and any associated capital gains, as these will determine the base cost of shares.

• Obtain Mortgage Lender Approval: If properties are mortgaged, check with lenders to confirm they will allow the transfer to a corporate entity and if new terms will apply.

• Set Up the Limited Company: Form a new company and ensure it meets all legal requirements. The company should be incorporated with the intention of owning and managing rental properties.

• Execute Transfer of Properties: Work with a solicitor or tax advisor to legally transfer the properties and mortgage liabilities to the company in exchange for shares, while ensuring all S162 requirements are met.

• Document the Transaction: Ensure that all documents related to the transfer, including contracts and board minutes (if any), are thoroughly recorded for compliance and audit purposes.

5. Professional Advice

While S162 incorporation relief can be beneficial, eligibility and application can be complex. Consulting with a tax advisor experienced in property and corporate tax law is essential to ensure compliance, optimise tax benefits, and minimise risks.

30/10/2024

Dodging the proverbial bullet.

By the looks of it, Rachael Thieves has broadly left landlords alone, but how long that will last for is another matter altogether.

So what should you do now?

As always the devil will be in each individuals details, but gut feeling is that now is very much the time to seriously look at incorporating your property portfolio while you still have the chance.

Chancery Law and Tax can help. We work in conjunction with Chartered Accountants, Chartered Tax Advisers, and STEP qualified lawyers, and are very much specialists in our field.

To arrange an initial exploratory consultation without cost or obligation, please email [email protected] or WhatsApp me on 07974 099221.

29/10/2024

With Liebour's first budget only hours away, and Rachael Thieves poised to steal even more from 'working' people and landlords in particular, Chancery Law & Tax (www.cltl.co.uk) is ready to help.

We specialise in Inheritance Tax mitigation along with personal estate and business succession planning.

Clearly, even if only a fraction of the much trailed tax grab is put into effect we're going to pretty busy, so please send me an email at [email protected] or WhatsApp on 07974 099221 to book your free and without obligation consultation.

BTW, Landlords are likely to hit heavily, so now may be the time to incorporate your portfolio and/or think about setting up a Family Investment Company.

19/10/2024

Regardless of what Liebour and Rachel Thieves has in store for the British people in the forthcoming Budget, Chancery Law & Tax is here to help.

Whether it's sheltering your estate from long-term care costs, mitigating the worst effects of the State inheritance tax racket robbing your grave, or taxing your property and other business interests out of existence, our team of STEP qualified lawyers, chartered accountants, and chartered tax advisers are on your side.

Add to that our strategic relationships with Ploutos Associates for all your secured lending needs, and with Risk Group Ltd for everything insurance, Chancery Law & Tax exists to help you help yourself.

To book an initial without cost or obligation conversation, either visit https://lnkd.in/dyxjrcmx, directly email me at [email protected], or message me on 07974 099221.

Come what may though, don't let yourself be a victim of Liebour's greed and anti aspirational politics of envy.

You've worked hard to build a life for yourself and your family, now let the Chancery Law & Tax team help you keep it and pass it on as intact as possible.

16/10/2024

SME Developers

Are you a SME Property Developer seeking innovative and flexible solutions to build your business and fund your pipeline?

If so, then Ploutos Associates specialist finance advisor can help you.

Clients enjoy the following premium products and services: -

Up to 100% funding for developers
Bridge loans for acquisition up to 85% day 1 LTV (case by case - not valid for land)
Access to mezzanine lending (institutional and private)
JV equity finance (institutional and private)
Unique funding structures such as Hybrid Debt/Equity facilities and Programmatic Funding
Overseas jurisdictions accepted: Ireland, Spain, Portugal, Jersey, Guernsey, Germany, and others
Dedicated case manager ensures quicker response times

Min Loan size: £1m.
Max loan size: £70m, albeit larger loans considered

For more information and to arrange an initial confidential chat, please email Tony Gimple (non-executive Partner) at [email protected] or call him on 07974 099221.