Steve Meredith, to boost Horsey Lightly Solicitors Private Client Department.
Jeremy Fitzgibbon, Managing Partner says “We are delighted to welcome Steve to the firm. He brings huge experience and expertise to the already strong team of Christopher Popham, Vicky Brackstone and Carl Wheeler. Steve is recognised as one of the leading practitioners in the country for Tax and Trusts work and while he was Head of Private Client at a previous firm, the Department was ranked in the top 25 in the UK. Steve has practised in the area of Wills. Trusts and Estate Planning for over 20 years and is both a member of the highly regarded Society of Trusts and Estate Practitioners (STEP) and one of the few Solicitors to hold the prestigious Chartered Tax Adviser (CTA) qualification.”
Steve acts for a wide range of clients including business owners, farmers, property developers and private individuals with a particular emphasis on helping people to pass on accumulated wealth to the next generation whilst avoiding or minimising Inheritance Tax (IHT) and Capital Gains Tax (CGT) liabilities. Steve says “I do this by making full and effective use of Agricultural and Business Tax Reliefs and ensuring that tax efficient Wills are in place. In particular it is vital that, where clients have children, their Wills are drafted to take advantage of the new Residence Nil Rate Band (RNRB) which was introduced in 2017 and will by April 2020 achieve a potential IHT saving of up to £140,000 for a married couple or civil partners. This represents a very significant IHT saving but the rules are not straightforward and it is quite easy for the RNRB to be lost by careless Will drafting or placing the home in a trust, only a limited number of which qualify for the RNRB. Particular care needs to be taken when dealing with a widow or widower who has remarried. In this case it may be possible to claim multiple RNRBs and a potential IHT saving of over £200,000 but the Wills require very careful redrafting to achieve this.
Well drafted Wills can also be used to minimise exposure to care home costs which for many people are a bigger worry than IHT because these can decimate a person’s assets. Whereas IHT will eat up 40% of the value of your assets above a certain limit (£650,000 for a couple without children and potentially £1,000,000 for a couple with children), care or nursing home fees can rapidly deplete your assets down to £14,250 meaning that there is almost nothing to leave down to your children when you die. Having well drafted Wills in place and changing the ownership of you property to a ‘tenants in common’ basis can protect your estate against the liability to pay care fees.
Steve’s approach to mitigating IHT and care costs for married couples/civil partners is to start with the Wills to ensure that they are fully efficient. Once the Wills are right then that means that up to £1,000,000 of assets will be free of IHT. However, for clients who have assets above that value and wish to mitigate their exposure to IHT, then further lifetime planning is required. This can include gifting assets or setting up trusts for children and/or grandchildren to assist with school fees or University tuition fees. Steve says “ many people are nervous of trusts because they have heard horror stories about how complex and expensive they are. However, modern trusts are very flexible and can be a very useful tool for clients looking to avoid IHT and CGT. Their main benefit is control ie if you simply make an outright cash gift to a child or grandchild then you have no control over how they spend that money, whereas if you put that money into a trust instead, you can control both how and when that money is spent. Many people are rightly wary of putting too much money into the hands of their offspring at a young age so a trust is an ideal alternative and can run for many years if required, including after the death of the person who creates it. A married couple can put up to £650,000 (£325,000 each) into trust without adverse tax consequences and, if each of them survives for 7 years, then that will achieve not only a 40% IHT saving of over £250,000 on the monies transferred into the trust but also any growth in value of the monies/investments held within the trust will also be outside the IHT net”.
Steve is always happy to see clients on a ‘no obligation’ basis ie the first meeting is free. Steve says “This makes the client feel more relaxed because there is no doubt that most clients are concerned about legal costs. During the meeting I will explore various options as to how to reduce exposure to IHT liabilities or care costs and, at the end of the meeting once I know what the client wants to do, I will be in a position to give them an accurate indication of the likely costs involved. They can then go away and think about it and decide whether or not and how they wish to proceed. I estimate that in 90% of cases I am able to produce either an IHT saving or create some level of protection against care fees.”
If you would like to know more or wish to arrange a free consultation with Steve either at our offices in Newbury or at your home please contact him at SMeredith@horseylightly.com or on 01635 517118.