In early March, Arthur Byng Nelson, Sherrards’ Head of Art & Heritage, attended TEFAF in Maastricht the leading art and antiques fair in Europe, as part of the At Business Conference.

Founded in 2014, The Art Business Conference is a leading global platform delving into pivotal topics within the contemporary art market. These one-day conferences attract senior art professionals, providing invaluable knowledge and insight for individuals involved in managing art businesses or collections.

Arthur advises clients on strategy, law and tax on all matters relating to collectibles. TEFAF is the fair to attend if you are looking to purchase museum-quality items: for example a painting by Guercino (1599-1666) see below of St. Sebastian, an ancient Egyptian relic or some highly unusual (and expensive!) jewellery. If you ever would like to attend he would be pleased to see what he can do for you.

Arthur also enjoyed the half-day Art Business Conference and made new contacts at museums in France and Belgium, as well as with a number of collectors and dealers.

See here Arthur with some of his fellow members of PAIAM (Professional Advisors to the International Art Market) and some photographs he took of works on his wishlist. 

Non Domiciled:

In his Budget speech, Mr Hunt said: “The Government will abolish the current tax system for non-UK domiciled individuals, to get rid of the outdated concept of domicile. We will replace the non dom regime with a modern simpler and fairer residency.” 

As it stands, those with non-dom status are able to earn money from abroad without having to pay tax to HM Revenue and Customers (HMRC) for up to 15 years. This is now being reduced from 6 April 2025 to four years, but after this period, those who continue to live in the UK will pay the same as everyone else.

Capital Gains Tax – cut

The higher rate of Capital Gains Tax (CGT) on property will be cut from 28% to 24% from April 2024 – firing up the residential property market and supporting thousands of jobs that rely on it.

National Insurance – cut

Following a 2 percentage point cut in the Autumn Statement, the main rate of Employee National Insurance will be cut again by a further 2 percentage points from 10% to 8% in April – a one third reduction in the main rate of National Insurance which means the average worker on £35,400 will receive a tax cut of over £900 compared to last year.

Following a 1 percentage point cut in the Autumn Statement, the main rate of Class 4 NICs for the self-employed will be cut by a further 2 percentage points from 8% to 6% from April – saving the average self-employed person on £28,000 over £650 compared to last year when combined with scrapping the requirement to pay Class 2 NICs announced at Autumn Statement.

British ISA

The new ‘British ISA’ has been unveiled pushing investment into exclusively UK assets allowing investors an additional tax free allowance of £5000.

ISAs, or Individual Savings Accounts, enable savers to invest £20,000 a year without paying tax on interest or returns.

The new British ISA, which will be introduced after a consultation into the implementation. 

These diaries cover the entire life and career of one of the most prominent figures in the British Army in the twentieth century and have been eagerly awaited by historians and enthusiasts alike. The extraordinary diaries of Lord Ironside were first targeted by Professor Sir Michael Howard when he created the Liddell Hart Centre for Military Archives back in 1964: after a remarkable 60 years, they are finally in the ownership of King’s College and the Liddell Hart Centre for Military Archives.

Arthur Byng Nelson, Head of the Art & Heritage Department at Sherrards, advised the Ironside family regarding these special papers and facilitated the transfer to the nation in lieu of inheritance tax for the benefit and study of the general public.

To commemorate this event King’s College London Archives and the Sir Michael Howard Centre for the History of War are hosting a talk on Tuesday 12^th March from 5:30 pm in the Archives Reading Room, at the Strand Building. At this gathering, esteemed speakers Professor Jonathan Fennell and Professor Andrew Stewart of King’s College London will delve into the significance of this collection for the study of the history of the world wars and beyond.

To sign up, click here and secure your place to celebrate the legacy of Field Marshal Lord Ironside and the invaluable contribution of his diaries to the understanding of military history.

To find out more about how we can help with your Art & Heritage matters, click here. 

For some, this involves considering the legal and financial implications of marriage. Beyond the emotional and romantic aspects, individuals may question whether tying the knot is a strategic move to save inheritance tax.

Marriage has long been considered a union founded on love, trust, and commitment. Choosing a life partner based on shared values, emotional connection, and mutual support is a timeless concept that transcends financial considerations. Whilst love is invaluable, couples may also find themselves facing practical questions about shared finances, joint assets, and planning for the future.

One financial consideration that arises in the context of marriage is inheritance tax (IHT). In many jurisdictions, married couples enjoy certain tax benefits, including exemptions and deductions related to inheritance. However, it is crucial to approach this aspect of marriage with a clear understanding of the laws and regulations governing IHT in your specific location as these can vary from country to country.

It is a widespread misconception that cohabiting couples enjoy the same legal rights as their married counterparts. In reality, cohabiting couples possess minimal rights, even if they share children. In the unfortunate event of a partner passing away without a will, the surviving partner inherits nothing.

Living in a deceased partner’s property or jointly owned property does not guarantee security- the surviving partner could face eviction or the forced sale of their home. They may be forced to bring a claim on the estate which could prove difficult if the beneficiaries of the estate are the unmarried couple’s children. Additionally, complications may arise if a person dies while cohabiting with a new partner amid an ongoing, yet unfinished, divorce, potentially leading to disputes with the family.

Having a Will in place does not exempt one from IHT if the deceased’s estate surpasses the IHT threshold. However, for married or civil partnership couples, the spouse exemption allows the transfer of assets upon death without incurring inheritance tax. While standard IHT applies to the estate exceeding £325,000 in value, married couples benefit from an exception that disregards this threshold, eliminating the need to pay IHT for the surviving spouse or civil partner.

As Valentine’s Day approaches and couples contemplate taking their relationship to the next level, the intersection of love and finances becomes more apparent. Whilst the allure of potential tax benefits may be enticing, it is crucial to approach marriage with a holistic perspective.

Should love not be the driving force behind such a significant decision, with legal and financial considerations serving as complementary elements?

To find out more, email Nicole here. 

Understanding the Basics:

A will is a legal document that outlines how a person’s assets should be distributed following their death. Having a clear and comprehensive will is essential to ensure that your partner is properly taken care of and that your wishes are respected.

In many jurisdictions, if there is no will in place, the law dictates how assets are distributed. In the UK, this falls under the Intestacy Rules. This default arrangement may not align with your intentions, particularly when it comes to non-traditional family structures. Therefore, a will allows you to have control over who inherits your assets, including your partner.

Choosing the Right Executor:

An executor is the person responsible for carrying out the wishes outlined in your will. When selecting an executor, consider someone you trust implicitly, as this role involves handling financial matters and ensuring the proper distribution of assets. It is crucial to discuss this decision openly with your partner and ensure they are comfortable with your choice.

Guardianship for Children:

For couples with children, clearly stating your preferences for guardianship in your will is vital. This becomes especially important for same-sex couples, as legal recognition and protection for non-biological parents may vary. Clearly defining your wishes can prevent potential disputes and ensure the well-being of your children.

Protecting Your Partner:

In many countries such as the UK, marriage equality has granted same-sex couples the same rights as heterosexual couples. However, it is essential to stay informed about local laws and regulations, as they can vary. With global mobility on the increase and many people moving abroad for work or other considerations, this may potentially affect one’s place of relocation. If marriage is not an option or does not provide sufficient protection, legal documents such as a will or power of attorney become even more critical.

Regularly Review and Update:

Life is dynamic, and circumstances change. It is advisable to review and update your will periodically, especially after significant life events like marriage, the birth of children, or the acquisition of new assets. Ensuring that your will reflects your current situation will help avoid complications going forward.

Conclusion:

In the pursuit of love and happiness, legal matters should not be overlooked. Same-sex couples, like any other, can benefit greatly from thoughtful will and succession planning. By taking the time to understand and navigate these essential legal steps, you not only safeguard your partner’s future but also ensure that your wishes are respected and your legacy is preserved.

Sherrards is part of an international alliance of legal and accountancy firms, Alliott Global Alliance, represented in 96 countries and we can connect you with advisers if you are looking to move abroad.

To find out more, contact Nicole Marmor. 

The event brings together Trust and Estate Litigators from across the globe to network and learn about recent contentious proceedings and updates.

This year, the Trusts & Estates Litigation Forum will take place 4-6th February 2024, and will be hosted in the city of Marrakech, Morocco.

Charles Burrell, Senior Associate and Head of Contentious Trusts and Estates will be in attendance and representing Sherrards.

Charles said “It is a pleasure to be attending the Forum on behalf of the firm. I am excited to connect with fellow professionals and build relationships with my peers across the globe..”

If you are attending the Trust & Estates Litigation Forum and would like to meet with Charles while you are there, please reach out to him on the details below.

As part of The Sherrards Training Academy, we have asked our Legal Assistants and Trainee Solicitors to write articles to support their learning, and also to ensure they start to build on their own personal brand. This article has been fact-checked and proofread by Head of the Private Wealth department, Nicole Marmor.

Introduction:

In the realm of estate planning, Lasting Powers of Attorney (LPAs) hold equal significance to Wills as tools by which individuals can safeguard their autonomy and ensure their wishes are honoured.

The Powers of Attorney Act 2023 received Royal Assent on 18 October 2023 and signifies a milestone in the law surrounding LPAs. The legislation is poised to take effect in early 2024 and will usher in substantial changes to how LPAs are registered and safeguarded.

The Act comes in response to concerns surrounding complexities and inefficiencies permeating the current LPA system and aims to promote accessibility by enabling online registration.

What is a Lasting Power of Attorney?

An LPA is a legally binding document enabling the donor to designate a trusted person (or persons) as their legal representative. The attorney is authorised to act on the individual’s behalf in situations where they are unable to do so.

There are two types of LPAs, one pertaining to financial matters and the other to health and well-being. Many choose to have both in place. Both documents need to be registered in order for the attorney(s) to act. By registering a power of attorney, you ensure that you retain control over how your affairs are managed in the future, irrespective of your personal circumstances.

How will the Powers of Attorney Act change the current landscape?

The Act’s primary objective is to streamline the LPA process, making it more convenient whilst reducing the clerical errors traditionally associated with wet ink LPAs. LPAs will be able to be created and registered online which will (hopefully) significantly reduce the processing time.

Nevertheless, it’s not all ‘laissez-faire’ when it comes to the Powers of Attorney Act, considerable safeguards have been put in place with the aim of shielding vulnerable donors from potential fraud and abuse, attorneys are now being required to provide more comprehensive information regarding their relationship with the donor. Furthermore, to ensure compliance with these new measures the Office of the Public Guardian (OPG) has been granted increased authority to assess and challenge LPAs and a new criminal offense of LPA fraud has been introduced to fortify the measures.

Forecast for the future:

Cloudy with a chance of LPAs …

It is anticipated that there will be a surge in the number of people wishing to register an LPA due to the convenience of the digital registration process. Private Wealth solicitors are poised to play a pivotal role in facilitating this process, offering guidance on the recent amendments and potentially undertaking reviews of existing LPAs to ensure compliance with evolving legal standards.

The OPG is expected to provide online training specifically tailored to acquaint legal professionals with the new digital LPA registration process. Solicitors may consider integrating online resources and video conferencing services to streamline access to their LPA-related advice, adapting to the changing legal landscape to benefit their clients.

Inheritance tax

As a general rule assets of a deceased over the value of the nil rate band (currently £325,000) are chargeable at 40% inheritance tax.

The Acceptance-in-Lieu scheme (“AIL”)

Since 1910 the UK government has encouraged those administering estates, responsible for ensuring that the tax is assessed and paid, to consider offering works of art and important heritage objects to the nation in lieu of inheritance tax.

In addition to the advantage of being able to meet a tax liability in kind, the scheme offers a financial sweetener (known as the douceur) to provide an even greater incentive to make use of the scheme.

The criteria

The art or objects must be ‘pre-eminent’: in other words, of particular historic, artistic, scientific or local significance, either individually or collectively, or associated with a building in public ownership. A very wide range of objects is accepted each year as may be seen in the annual reports published by the Arts Council.

The art or objects must be in an acceptable condition.

The process

Offers must be made to the Heritage Team at HMRC. Those offers must be approved by the Secretary of State for Digital, Culture, Media and Sport (or the appropriate Minister in the devolved governments in Scotland and Wales) who is advised by Arts Council England’s AIL Panel. The AIL Panel consists of independent experts who seek specialist advice on the art or objects offered.

Key elements of any offer will be a valuation and justification for that valuation (generally independent opinion from more than one source is helpful); an explanation of why the object is considered pre-eminent; digital images and details of where the object can be inspected; evidence that the offeror has good legal title to the object (and details of its ownership between 1933-1945).

The douceur

In order to attract some of the finest works into national ownership the government offers a financial incentive to those administering estates. The sweetener consists of a 25% “cash-back” calculated against the inheritance tax that would normally have been due.

Example: Mr Gombrich’s estate contains an important Modern British work on paper. At date of death the piece was valued by an independent expert at £100,000. Mr Gombrich’s son is the sole residuary beneficiary and executor and decides to offer the painting in lieu of the inheritance tax liability of £40,000. The AIL Panel confirm the piece to be pre-eminent and agree a value of £100,000. The douceur is calculated as 25% of the inheritance tax due on the painting: 25% x £40,000 = £10,000. Gombrich junior receives £70,000 for the piece, the tax liability is cleared and the nation gains a pre-eminent work for the public to enjoy.

Conclusion

Every case will be different. The scheme offers an opportunity to make a not-insignificant tax saving whilst also having the benefit making the item(s) available for the appreciation of the general public. At the same time do bear in mind that there will be occasions when an item might achieve a better overall result (tax liability included) when sold on the open market (or indeed by a private sale). If you are considering your options I would be very pleased to advise.

Founded in 2006, Spear’s is a bimonthly British Magazine for ultra high-network individuals and for the people who advise them, focusing on the latest news surrounding wealth, business culture and luxury. 

Spear’s annually publish rankings on the top International Private Wealth advisers and service providers to high-networth individuals. These rankings are drawn from peer recommendations, feedback from clients, in-depth telephone and face-to-face interviews, data supplied by firms, as well as research conducted by the Spear’s editorial and research teams.

Nicole Marmor, Partner and Head of Private Wealth at Sherrards, was ranked alongside just four other “Top Recommended” International Private Wealth Lawyers for Probate and Wills for high-networth individuals in the UK. 

Nicole says “I am very grateful to the Spear’s team for the time and effort put in to be recognised as a top lawyer among so much talent. It is great to see a range of individuals showcased for their expertise and drive within the probate legal industry.”

If you would like to speak to Nicole, or a member of the Private Wealth department, please contact law@sherrards.com

To see the rankings on the Spear’s website, click here.

To see Nicole’s profile on Spear’s, click here.