Category Archives: Uncategorized

Probate Costs

Interesting to note that ‘because of Brexit’ the planned increase in the costs of probate are going to be delayed. Question is for how long. This article from the Guardian

Seems to indicate that it could well be some time before these new charges start to bite. Use to the be the case that Government services were based around the cost of the service to Government and priced accordingly, yet there does seem to be more and more charges that are indeed ‘revenue producing’ – or taxation by the back door. We have seen more and more stealth type taxes introduced which does concern me a little. I wonder when these will cease.

An increase in probate costs without a doubt considerably more than the cost of the service to the taxpayer. I don’t think it will be long before these new charges drop into the mix.

The increase in charges will affect those estates of more than £300,000 which I accept is not going to be all cases – but still the Guardian estimate an increase of some £155m per year once the new rules apply – not an insignificant sum of increased cash.

Meanwhile of course if you need any help with probate you’d better get in touch.

Power of Attorney – Can I borrow money from the donor?

Short answer on this is no, not sure why you thought it may be different. It’s not your money.

More – taken from

It’s not a UK site but succinctly expresses it.

Borrowing Money as Power of Attorney

One of the questions which I am asked over the years is whether an attorney using the authority under a power of attorney can access money held for an incapable donor to be used for other purposes than to benefit the donor.

This situation arises most often when a child or children who are named as attorneys want to “borrow” money from the incapable person. The reason given is that Mom or Dad have more than enough money to keep them for the rest of their days and they would loan the money without question. Besides I am told “I will pay it back if it were needed”

I often hear that taking into account the income from government and other sources they will never need any more income. Sometimes this type of transaction is joined in and supported by all of the siblings.

Another justification given is that for estate planning reasons they wish to reduce the value of the estate on death and thereby pay less to the government. This is not within the authority of the attorney either since they are doing the same thing for another reason.

It is the attorney’s duty to use the power only for the benefit of the donor and not for the attorney’s own profit, benefit or advantage. The attorney can only use the power for his or her own benefit when it is done with the full knowledge and consent of the donor. I am not aware of any authority that detracts from this principle in circumstances where the benefit is conferred on family members.

An Attorney is a fiduciary whose powers and duties must be exercised and performed diligently, with honesty and integrity and in good faith, only for the incapable person’s benefit. An attorney who receives compensation for managing property must exercise the degree of care, diligence and skill that a person in the business of managing the property of others is required to exercise.

An attorney has an obligation to keep proper accounts. A trustee must keep a complete record of their activities and be in a position at all times to prove that they administered the trust prudently and honestly. They must have the accounts ready and give full information whenever required.
A trustee must make a proper accounting as a condition precedent to being awarded compensation. Without a proper accounting, the court is unable to assess the conduct of the fiduciary and to determine the compensation to which he or she is entitled.

An attorney who fails to retain receipts supporting substantial cash withdrawals or expenses charged against the incapable person’s property has not adequately carried out their duties and will be held personally liable for the unsubstantiated withdrawals.

From the Public Guardians Office

Again – no.

An in-depth explanation of what you can do. CA

More from the UK

From PoA’s are not authorised to take loans for themselves nor authorise loans for other people so far as I am aware. Others will be along with more knowledge than I but that’s my understanding from discussions with the OPG.

If you are really not sure and still want to consider the options of borrowing from the elderly parent – you are supposed to be acting in the best interests of – call the Public Guardians office – you’ll the same answer as above – it is not acceptable to borrow from a donor when you have power of attorney – not now not ever.

Inheritance Tax – How Much Is Your Property Worth

The Inland Revenue are making themselves very busy over property valuations on death (note not on sale). With more and more probate cases being tested. Some are blatant undervaluations in order to reduce the amount of tax – if any is paid.

It’s a dangerous game to play – the Revenue Inspectors don’t have to pay to take a case to court so it’s not their money that’s at risk – it really is a case of Executor beware. So what are the options.

Get three Independent Estate Agents to value, formally the property. See if there is a consensus and make sure they justify the valuation. Remember it’s not the expected sale price we are trying to get – it’s the value of the property. As an Executor you have a formal obligation to value the estate – no matter if it sells for less – the valuation is important.

Other expenses like ‘reasonable funeral expenses’ can, of course, be deducted. But Estate Agent, legal costs and probate charges are not deductible – quite a lot of unfairness built into the system already.

Where the deceased offers specific gifts, like items of jewellery these need to be valued formally and included in the estate valuation.

Key is what needs to be offered up to the Inland Revenue on death and these are.

An account of assets and liabilities.

Formal valuations for things like motor vehicles and chattels along with details of any liabilities and loans of the deceased.

Then the big one, the value of the property.

Three Estate Agents valuations as a starting point and possibly a valuation survey by a RICS Member outlining the valuation at date of death – these are normally accepted without question by the Revenue. If further work is required or there is more specialised questions to be asked then the Inland Revenue District Valuer will want to get involved – best avoided if possible.

From Rumball Sedgwick The valuation should be carried out by experienced RICS property surveyors with an in depth knowledge of the local property market. The report also needs to be compliant with current HMRC inheritance tax law to reduce the risk of the District Valuer becoming involved, which invariably delays the whole process further.

Any costs of this are born by the beneficiaries. and not on the estate, which seems harsh but the Inland Revenue have rules for a reason – they don’t always make sense. Of course they could argue that you don’t need to appoint an Estate Agent to sell the house or ask someone to take on probate for you – and you can inherit all of the available proceeds. As the Revenue say – that’s your choice.

You Have Six Months To Pay Inheritance Tax and no more. Read this post it’s important. And get in touch if you anywhere near this deadline. Probate and Inheritance Tax

From the Guardian

Often with normal household goods valuing them is hard to do. The Revenue seem to think an auction is the best place to sell – it will obtain ‘market value’.

Figures issued today show that HM Revenue & Customs (HMRC) has increased by 26% the amount of extra IHT it receives by successfully challenging property valuations. When someone dies, any land and buildings they own are part of their estate when it comes to working out IHT. Most estates don’t have to pay because they are valued at less than the threshold: £325,000 in 2012-13. Above this, tax is paid at 40%. However, recent figures from the Land Registry show the average house price in the UK is now £246,000, and £410,000 in London.

From Tax Insider

Mark McLaughlin warns that inaccurate valuations of land and buildings for inheritance tax purposes can result in HMRC enquiries, additional tax and possibly penalties.
Some areas of tax compliance are much more difficult to get right (and therefore more of a risk in terms of making errors) than others. Valuing assets such as land and property for inheritance tax (IHT) purposes (e.g. on death) is one such area. 
Land valuationsOne of the difficulties with land (and many other valuations) for IHT purposes is a lack of clear guidance on what constitutes ‘market value’. This term is simply defined in the legislation as ‘…the price the property might reasonably be expected to fetch if sold in the open market at that time; but that price shall not be assumed to be reduced on the ground that the whole property is to be placed on the market at one and the same time’ (IHTA 1984, s 160).
According to HM Revenue and Customs (HMRC), inadequate valuation of land (and buildings) is one of the biggest risks in IHT compliance. HMRC enquiries into land valuations produce large amounts of additional IHT and interest. What can be done to reduce the possibility of problems with HMRC? 

Importantly items of value will need separate, formal valuations and a formal valuation of other goods remaining. My view would be that an initial position of the estate should be obtained as soon as possible in order to calculate the rough situation and then a decision made from there as to what the next stage will be.

There is a some more information here

Household Items – Goods and Chattels

All the stuff that is left. You know the valueless items that no one wants – but were of course precious to the deceased. The Inland Revenue are interested and are watching carefully. For these reasons you need to be a little careful.

From the Revenue Practice Notes

Household goods and personal goods: valuation and technical issues: how we value household goods

IHTA84/S160 stipulates that the value to be included in the IHT400 (IHTM10021) is ‘the price which the property might reasonably be expected to fetch if sold in the open market at that time’. You may want to ask Shares and Assets Valuation (SAV) for advice when very valuable items are included but, otherwise, if the taxpayer has provided a professional valuation of household goods, which states that it has been prepared on the basis of the open market value and/or in in the terms of S160, you will usually be able to accept it. This is subject to the comments about sales below.

A valuation prepared on any other basis may not satisfy the terms of S160, as the value could be more, or less, than the open market value. For example, a valuation ‘for insurance purposes’ using replacement values may include too high a value.

Where a valuation is described as being made ‘for probate purposes’ or for ‘IHT purposes’ you may want to confirm with the taxpayer or agent that the open market value has been used.

If you are concerned that the value returned does not reflect the open market value ask SAV for advice, if the amounts involved are worthwhile.

Generally, sales after the death, particularly those at auction, provide the best evidence of the open market value at the date of sale.  The taxpayer or agent may be happy to substitute the sale prices for the original valuations or may argue for an adjustment due to market movement between the dates of death and of sale. You should consult SAV (Chattels) if appropriate.

You will occasionally find that the taxpayer or agent will deduct either the cost of obtaining the valuation or the costs incurred in sales from the gross value. You must remember that any costs incurred after the date of death are administration expenses and therefore not deductible.  The auction sale price is the gross proceeds of sale (or hammer price) before deduction of commission and insurance and without addition of any buyer’s premium.

You have been warned.

As always, please let me know if you need any help on the matter of probate.




The Truth About Planning For Care Fees and Inheritance Tax.
The Ugly Truth About Care Fees Planning

Five Things You Need To Know About Care Fees
My parents hit their mid 70’s with no formal plans in place, their pensions kicked in at 65 and they have had a very happy and healthy life, still living in the family home and still very much in love. Of course health wise I never expected them to start getting frail so quickly, and as is normal it was Dad who got worse first.
None of us are ever sure which one it’s going to happen to first, but we must try and plan for every possible outcome. I know it’s difficult, and it’s an even harder subject to bring up with our family – but bring up we must.
Nothing prepares you for it when it does come, and there is little truthful information out to there to help much like you, my wife and I were muddling through piles of information when it happened to us.
It also doesn’t help when you read some of the specialist websites because many of these report different things, and then there are the conflicts from Adult Social services who often seem determined not to help you.
We have personally found that Social Services are not helpful at all; indeed have been told that “they are not advisors or consultants and are not concerned about preserving any funds” it’s only the care of the person needing the care.
And then you could spend days looking for the right answer only to miss one or more important points which then means any tentative plan you have, fails.

When we made the first calls to Social Services, they made some sense, but actually getting them to take action was damn difficult– with at least three departments involved it was proving to be a frustrating exercise.

Despite my twenty eight years of financial services bureaucracy I was not prepared for what was coming next, confusion and complexity faced us.

This is one of reasons I started to tour the South East with a series of workshops outlining the truth about what really happens when parents need more than a bit of shopping and a cleaner and when there is an industry waiting to convince you that they have the solutions – when they don’t.
You are never sure which one it’s going to happen to first, but you must plan for every possible outcome. I know it’s difficult, and it’s an even harder subject to bring up – but bring it up you must. Inheritance tax and care fees should be on the tip of your tongue until you understand and know how they will affect you and your family.

These are your major considerations..
What happens if one or both of your parents needs long term care, either in a nursing home or just care because they are frail. Simple things like cooking and cleaning can be a real problem.
Is there anything that can be done to reduce a liability? What are your options.
Also, what happens to the things they own, their pensions, their house and other investments if they do die or if they live for longer than expected.

These Are Difficult subjects.The main considerations are care fees and inheritance tax – who pays and who doesn’t and how can you legally reduce a liability to them without falling foul of the law, and without being accused of deliberate deprivation.

Beware Of The Snake Oil Salesman and The Shiny Suited Liars. One of the big problems is that there are plenty of ‘scammers’ out there offering solutions that will never work (at best) or at the very worst are plain scams, they base their scams on complexity and deceit, which is why I have spent the last four years providing education and knowledge instead of selling products.

You require a slightly different structure and a forward plan, and not most definitely not a one size fits all product.

Thinking Time
The sooner you get started on this problem, the easier it will be. Knowing what your options are now will ensure that when the time comes, you can have a stress free move in plan a or b. Whatever you decide based on what you know.

Below is part of a press release I sent to Horsham, Crawley and East Grinstead Elderly Groups earlier on the year, when there is was a highly targeted campaign by two firms. Both were offering plans that could never work and charging a small fortune for them.
It’s clear that with record house prices in the South East, and the Government collecting more and more inheritance tax, and it’s insistence of changing the rules every so often (2014 Care Act) this problem is not going away soon.
Like you I was concerned for my parents, and I am a qualified financial consultant with over twenty eight years experience in this area of personal planning. It’s for that reason I have been managing an education program with everyone I have met over the last couple of months.
I have been presenting this information at over 50’s groups across the county, and here is what they said.


You and I both know that death is not an option, and nor are the taxes that arrive with it, and the 2014 Care Act brings a similar threat when half dead or at least not coping.
Problems arrive when you consider what to do. Which is where I can help. I have no products to sell you, just simple face to face consultancy for a fixed fee – and a complete money back guarantee.
You may be looking for a magic wand to help solve some of the problems for you and I can’t promise that, but I can help you with a number of proven solutions – and the sooner these are discussed the easier/more efficient things will be for you.
You and I can look at exactly what can be done, what’s safe to do and what is tested. You are then free to set things up by choice, on your own terms.
But, and this is a big but. You have to act on this. If your parents [or you] have assets in the form of a house that is worth more than £30,000 (thirty thousand pounds) and are still alive, and if you are remotely concerned about making sure the maximum amount of money is passed down then you need to consider this today – before it’s too late.

As I mentioned above, no magic wand, just honest and truthful help without having to sell you something.

I don’t even want you to make a decision today, all you need do is send me your email address using the box below, and some more information will be sent. I’ll follow this up via email (no one will call you) over the coming couple of days – when you are ready we can arrange to meet or you can pop along to one of the open events being held in September/October (there is nothing to buy at these events).
Whatever you decide, doing nothing is not an option. If you own your own home or if your parents own their home; then at least one of these things will be of concern.
Even if you decide to act on this but not through me, that’s fine and I fully accept that. But you do need to act, and you need to do it today.

Money Meetup


I know that some of you have been enjoying the weekly meetup at the Arora Hotel in Crawley for the last few months, and I have decided to move the meetings to varied spots around the county (Sussex) so the travelling time is reduced for some of you.

At the same time I have moved the group  from to our own email newsgroup. There are a couple of reasons for this, cost is one. There is a membership fee for meetup, and the other is control. By having our own group, it’s possible to manage and hold group discussions far easier if it’s on website space that’s controlled buy you and I.

We’ll still be meeting weekly at a number of venues (to be advised) and these meetings will still be free of charge.

For those of you wanting to accelerate your move to true financial independence, and want to learn how to manage your own money, this meetup is for you.

There is nothing to buy, so there is no chance of you being sold something. It is a safe environment to learn about money, how it works, what makes sense.  Send me your details below and I’ll get  the first emails out to you.

Just so you know, you’ll need to confirm your email address by clicking on the link in the email that’s sent, and your email address is not loaned or lent to any third party.

Richard – Money Trainers – Making Money Make Sense.

Local Government | Pension Schemes | LGPS

You have this nice job at the council, everything is ticking along quite nicely. You are looking forward to a happy and stable retirement and boom.

A problem with most (if not all) of the Government supported pension schemes may end up shocking you when it’s announced that they may not do what you think they are going to do.

Local Government (LGPS) pension scheme is currently underfunded  – does not have sufficient investments to cover it’s liabilities [pensions due to be paid at a future date] the present amount it needs is  £57bn LGPS Shortfall

The NHS Pension Scheme is also in difficulty with some £500m needing in the coming few years and some £1.2 b needed to be found in the very short term according to the HSJ, worse than the shortfall that’s looming is the longer term and very painful problem of the £500bn shortfall that’s expected.

Teachers Scheme don’t think for one minute you’re safe if you teach. In 2012 the Governments’s own actuary was talking about the scheme needing £15b to ensure all benefits could be paid.

With just these three schemes alone someone needs to find some £572b  in the coming years if benefits are not going to be reduced.

The public no longer has access to the same gilt edged pensions – called that because they seemingly are not able to fail and provide guaranteed benefits at retirement [Final Salary Pensions]; it is unlikely that the public will want to pick up the tab for this shortfall via increased taxation.

The Government has a couple of options.

  • Take the shortfall from the public purse.
  • Reduce Benefits for existing and new members.
  • Reduce benefits/increase contributions for future members.

There are a couple of problems with these Government sponsored schemes that will not go away. It’s also clear that these existing pensioners or those shortly to retire will have really had it all, “there is no money left’ as one of the Brown Government Civil Servants stated on leaving his desk.

So it looks like, those under 30 currently members of these schemes will be facing the problem head on, longer working life, reduced pensions and state  support, increased cost of housing, increased levels of taxation to pay for an ageing population. And very soon having to stump up more hard earned  to cover the mistakes and promises of the past.

Listen now millennials, if you don’t start taking this very seriously and stop relying on the State Pension Promise you are going to be in for a surprise. Pensions as you and I understand them are fatally flawed. Government promises are unlikely to be fulfilled.

If you don’t think you need to make your own plan b, then you are mistaken. Genuinely taking control of your own future financial security has never been more important.

You can find out more about your options by getting the 30 Day Money Course. There is no charge for it, and you will find it helps with your bigger picture planning, it also tells you the truth.