When couples separate and divorce, part of that process will involve dividing the assets from the marriage and making two households out of one.

‘Dividing up cash, savings and the family home are relatively straightforward,’ says Jo Scott, family law expert with Kidd and Spoor Solicitors in Whitley Bay. ‘In contrast, pensions are the most complex asset to distribute, and are often overlooked.’

Pensions can be shared just like any other marital asset. However, the share of the pension cannot usually be made available immediately but will provide some pension benefit in the future. In addition, there are a variety of types of pension schemes with differing approaches to calculating the eventual pension payments.

One key difference arises depending on whether a scheme is based upon defined contributions (for example, a private pension into which a set amount per month is paid into the fund), or a defined benefit scheme (for example, a final salary pension scheme), which is calculated by a formula based on the earnings history, years of service and age, rather than depending directly on individual investment returns.

Alternatively, experienced investors or company directors may have a Self-Invested Personal Pension (SIPP) or a Small Self-Administered Scheme (SSAS) which might include a portfolio of assets such as commercial property, woodland, shares and business investments.

It is perfectly possible for a couple to have pension funds of the same size but differing predicted monthly payments, even if they both work in the public sector.

Valuing the pension

The starting point is to contact your pension provider to request an up-to-date valuation of your pension or pensions – one is required for each pension you have. This is straightforward and a telephone call to your pension provider is usually sufficient. You will then receive a written valuation (or CEV) in respect of the pension, which says what the pension fund is currently worth and your expected pension payments.

For most private pensions, that valuation will usually be sufficient to provide accurate information to allow you to determine long-term arrangements. However, the picture is far from straightforward for SIPPs, SSASs and defined benefit public sector or armed forces pension schemes.

In these cases, the CEV may not be a true valuation of the pension fund. This is not because of anything untoward, it is simply to do with how the calculations are made, and the CEV provided may be lower than the actual value of the pension.

This can arise for a number of reasons, as demonstrated in the following scenarios:

• If the defined benefit is calculated based upon length of service of the serving spouse, the difference can be significant. For example, where the wife is a serving police officer who has 24 years and 364 days service, her pension provider says she has a CEV of £250,000. However, 24 hours later, when she has attained 25 years service, that pension may be worth £350,000.
• Where the pension fund includes property investments, values may change significantly particularly if planning permission for development is obtained. An acre of agricultural land may be worth £20,000 today, but with planning permission for a solar farm or a business park, its value could increase tenfold.

The benefit of an actuarial valuation

A pensions actuary will be able to provide an accurate valuation of the pension fund and expected payments. Unfortunately, an actuary’s report can be expensive, and often couples are put off by the cost and feel that the size of the pension does not justify the expense.

However, as can be seen in the example above, the true value of a pension can be significantly higher than you might initially be led to believe.

Can I claim against a pension that is already in payment?

Yes! Just because your spouse is already receiving their pension, it does not mean that the pension fund cannot be shared. However, it may be necessary to obtain an actuarial report to assist with calculating the appropriate percentage split.

What about state pensions?

It is possible in certain circumstances to have a pension sharing order against your spouse’s state pension – this might be particularly relevant if one party has not worked sufficiently to build up their NI contributions and so is not eligible for the full amount of the state pension.

Offsetting

In some cases, it might be preferable to keep the pension intact and provide one party with a larger capital sum.

For example, when one person earns little they might struggle to raise a mortgage to buy a house. If the higher earner has a large pension pot, they might prefer to keep the whole of the pension and (subject to appropriate valuations) give their spouse more capital in exchange. This is known as offsetting, however, pensions and capital cannot be compared on a pound-for-pound basis.

As can be seen, pension calculations are complex, but your financial security in your old age may be at stake and so it is vitally important to seek legal advice from a solicitor who will be able to explain to you in more detail about how to share any pensions and how to obtain accurate valuations.

For further information, please contact Jo Scott in the Family team on 01912970011 or email cbennett@kiddspoorlaw.co.uk. Kidd and Spoor office can be found at 7 Marden Road Whitley Bay NE26 2JN.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Like many government organisations, Her Majesty’s Courts and Tribunal Services (HMCTS) has been increasing its digital services over the past few years as it aims to provide a more streamlined system for probate registries.

While the online service provides an option for executors and administrators to deal with an estate themselves, according to Nigel Miller and Noel Dilks, solicitors in the wills and probate team with Kidd and Spoor Solicitors in Whitley Bay ‘There are many reasons why instructing a professional remains sensible. If you distribute an estate without properly taking into account the terms of the will, as well as the rules governing the different types of gifts and trusts, you could find yourself subject to a claim for breach of your duty.’

Taking a step back from the administrative duties can allow you proper time to grieve and entrusting a legal expert with the more practical aspects of estate administration means that you are in safe and experienced hands. Our probate team has been rigorously trained and are used to dealing with estate administration on a day-to-day basis.

An estate may seem simple enough to deal with, especially if you knew the person well. However, only a small percentage of estates are truly straightforward and there are many apparently ordinary circumstances which should be considered in more depth, and which may call for the knowledge and expertise of a practised professional.

Children

If there are any minors (those under the age of 18) who are due to inherit, you must consider the precise wording of any will to ensure that their money is held as per your loved one’s explicit instructions. For example, a small gift to a child might be the subject of a bare trust, whereas a larger gift might be part of a bereaved minor trust. These different types of trusts have different rules and restrictions and wills do not usually explicitly state the trust type.

Property

Most estates today include some property and how property is owned is important. If you are dealing with an estate which includes a house the deceased owned jointly with someone who is still alive, that house may or may not pass in accordance with the terms of the will, as this will depend upon exactly how the house was legally held.

Large estates or unusual assets

The type and volume of assets involved may also be a good reason to enlist professional help. Overseas assets will need to be handled carefully.
Shareholdings, for example, attract complicated valuation and tax rules. If dealing with a particularly large portfolio you will need to carefully consider all its individual holdings to ensure that the estate does not overpay or underpay tax, as well as whether any tax is the liability of the estate or the beneficiaries.

Inheritance, income and capital gains taxes

Tax is a complex legal area and a professional can help you to ensure that all tax is accounted for. When administering an estate, you need to consider not just inheritance tax, but income and capital gains as well. A professional can also make sure that no tax is paid needlessly, ultimately saving you and the estate money.

Some assets will be subject to special tax exemptions or reliefs. For instance, an estate which includes business or agricultural property is likely to attract specific tax reliefs, and assets passing to certain people or organisations (such as a spouse or civil partner, or a charitable organisation) will be exempt from inheritance tax altogether.

There are also some other more nuanced rules concerning tax, such as a reduced tax rate where a certain percentage of the estate is left to charity. A professional can help you to navigate all of these rules meaning that you need not worry about misinterpreting, or missing out on, any available tax reductions.

Estates with limited assets

Sadly, not all estates can pass as the deceased had wished. Sometimes there are insufficient assets available and an estate will be insolvent, or subject to abatement. The order of entitlement under an insolvent estate must follow a strict order which is set out in the law. Abatement refers to the process for administering an estate which is solvent but in which there are insufficient assets to honour all of the gifts made by a will. Again, the order by which gifts must abate is predetermined and must be followed.

Claims from family members

Family members do not always get along, and an extended or blended family may disagree over the distribution of an estate.

If you anticipate a dispute, it would be wise to instruct a legal professional to administer the estate from the outset. Not only can this introduce a neutral person to prevent the further deterioration of family relationships, it will also mean that they are familiar with the estate should a claim arise.

How we can help

As executor or administrator, you are responsible for making sure correct procedures are followed. A legal expert will be familiar with the rules and can ensure they are correctly adhered to on your behalf.

If any of these potential complications seem familiar, or you are worried about any aspect of an estate for which you have been asked to act as executor or administrator, we can offer you peace of mind and expert assistance, whether you are yet to begin the administration or you are already well on your way.

For further information, please contact Nigel Miller or Noel Dilks in the wills and probate team on 01912970011 or email nm@kiddspoorlaw.co.uk or nd@kiddspoorlaw.co.uk Kidd and Spoor’s office is based in Whitley Bay, Tyne and Wear.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

The easing of lockdown restrictions, a buoyant property market, and the temporary savings on stamp duty mean now could be the ideal time to sell up and buy your next home. Getting the timing right could be more important than ever and, once you have accepted an offer, you will want your sale to progress smoothly and quickly.

Making sure the title to your property is in order will help keep your transaction on track, letting you and your buyer proceed with confidence. Ideally, you should do this before putting your home on the market but, whatever stage you are at, you should talk to your solicitor. She can identify potential title issues that could delay or jeopardise your sale and suggest ways to fix them.

In this first of a two-part article, Philip Walker, a residential property solicitor with Kidd and Spoor Solicitors in Whitley Bay looks at five possible title problems, which, unaddressed, could disrupt your plans.

Land Registry issues

One of the first things your solicitor will do is to obtain an official copy of your property’s title at H M Land Registry. This is proof you own the property, but your solicitor will also check whether it reveals anything which could become a problem. This could be something to do with your title or a potential registration issue. For example, sometimes the register contains a restriction which needs to be complied with. Failure to address this would prevent the registration of a new owner following a transfer, and your buyer is unlikely to proceed unless he can be sure he will be registered in turn.

Often a restriction requires the consent of a third party, for example, a landlord or management company. Fortunately compliance is usually relatively straightforward, although it could delay matters if not addressed early on.

Occasionally it is not possible to comply with the restriction, and in these cases your solicitor may need to apply to the Land Registry for its cancellation or for an order to permit registration of the transfer.

Unregistered land

Over 85 per cent of land in this country is registered, and your title is likely to be registered too. If it is not, then matters are likely to be more complicated.

Very rarely, title may not be registered because of an earlier failure to apply for registration. In this case, your solicitor should consider whether to seek a retransfer or an order to allow late registration. Until then, you will not have legal title and will not be able to complete your sale.

More often, property is unregistered because it has been in the same ownership for many years. Instead of being able to rely upon the Land Registry’s register, the buyer’s solicitor will need to examine the title deeds. This is a more complex process and, as there are now few solicitors who are experienced in or properly understand unregistered land, conveyancing may take longer. Choosing a solicitor with the right expertise will help and she may suggest applying to the Land Registry for voluntary first registration. This way, your buyer can rely upon your registered title and this will make the conveyancing process simpler and quicker.

Lost deeds

Another advantage with registered land, is that there is much less likely to be a problem if deeds have been lost. Without the deeds, if your property is unregistered, it will be difficult to show you have a good title. So, you should make every possible effort to locate them.

If your deeds are lost and you cannot find them, your solicitor will try to reconstruct your title by gathering as much evidence as possible. She can then apply to the Land Registry for registration of your title. The Land Registry has a special procedure for these types of case, although this can be lengthy, so it is important to start the process as soon as possible.
Occasionally, a missing deed can be an issue even if your property is registered. This is because the register refers to rights or title restrictions contained in a particular deed, but it is not clear how they affect your property from the register or the records the Land Registry holds. If you cannot find a copy of the deed, you may satisfy your buyer by showing the right or restriction has not caused any issues in the past. Alternatively, your solicitor may suggest title insurance to allay any concern.

Restrictive covenants

A restrictive covenant is a type of restriction which could affect your land for the benefit of neighbouring land. For example, it could stop you building on your land without first getting the consent of a neighbouring owner. If you have breached this restriction, for example by extending your home without that consent, then you or a subsequent owner could face legal action. The neighbouring owner could seek compensation or the removal of the extension, a risk which could worry your buyer.

The register of title, or your deeds, should show whether any restrictive covenant affects your property. If there has been a technical breach, you will have different options depending on the circumstances. For example, you may be able to prove the restriction is no longer enforceable or apply for retrospective consent. Title insurance is another possibility and, for a small cost, can be a pragmatic solution, allowing your sale to proceed without undue delay.

Rights of way and other easements

Your buyer will want to know about any rights your property is subject to and to make sure it has sufficient rights for his intended use. For example, problems sometimes arise with shared driveways. One property may include the drive, but the other property has no legal right over it. Where neighbours are amicable, it may be relatively straightforward to change the legal documentation to reflect the position on the ground. This will inevitably take some time, especially as you may also need the consent of any mortgage lenders and is best addressed early on.

Hopefully, your property will not have any title defects. Even if it does, very few problems are insurmountable, and a good solicitor will help find solutions to keep your sale on track.

For further information about buying or selling your home, please, contact Christine Blenkinsop or Philip Walker in the Conveyancing team on 01912970011 or email cb@kiddspoorlaw.co.uk or pw@kiddspoorlaw.co.uk
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Last updated: 25th Nov 2020

We would like to share some intelligence with you all on some scams we’ve seen recently, where criminals are impersonating Solicitors to obtain funds fraudulently.

This is a known scam and one which Solicitors already warn and educate buyers on, however, we have seen some high value cases recently and suspect this will continue as sales have soared.

• The criminals are researching property sales to identify property buyer and Solicitor managing the sale
• Once they have the information they need, they set up email accounts very similar to the genuine Solicitors. From a glance they look genuine, but may have an extra or missing letter or punctuation mark
• In one instance the criminals have also called the buyer purporting to be from the Solicitors
• The criminal communicates with the buyer usually through the email which has been set up and provides invoices and account details for the payments to be made to

On 8 July 2020 it was announced that there would be a Stamp Duty Land Tax (SDLT) holiday, this has seen a very large influx in Residential Conveyancing transactions across the UK, this coinciding with the Lockdown and other Covid 19 related implications has caused delays to mortgage lenders, surveyors, search providers and any law firms.

Our conveyancing staff have been working many additional hours in an effort to ensure that as many transactions as possible proceed to conclusion in an efficient and timely manner. We have recruited additional temporary staff to assist with this process.

However, we would like to bring your attention to several factors outside of our control that may prevent completion by the end of stamp duty deadline in March:

• Searches – Ongoing delays in Searches at local councils, some of whom are still dealing with high backlogs due to Covid.
• Lenders & surveyors – Ongoing delays with the Mortgage lenders and surveyors.
• Other Law firms – Delays caused by other Law Firms, some of whom have taken on too much work or are still working from home.

THINGS YOU CAN DO TO HELP

• Please do not constantly chase us, please do not ring us daily for progress updates as this will slow down our Conveyancing team and in turn reducing the likelihood of completing by the SDLT deadline
• Please be prompt in answering any questions we ask you during the transaction.
• As we get closer to the deadline, please work on the worst-case scenario that Stamp Duty will need to be paid.
• Please have funds available to pay this should completion go through after the March deadline.
• please ensure you plan ahead with removals firms.

Although we will strive to get your property transaction completed before the March deadline, this may not always be possible. We have set out below examples of how stamp duty is currently working and how it will work once the holiday comes to an end.

Rates from 8 July 2020 to 31 March 2021

Example

In March 2021 you buy a house for £625,000. The SDLT you owe will be calculated as follows:

• 0% on the first £500,000 = £0
• 5% on the remaining £125,000 = £6,250
• total SDLT = £6,250

Use the https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro to work out how much tax you’ll pay.

Rates from 1 April 2021

These rates also apply if you bought a property before 8 July 2020.

You can also use this table to work out the SDLT for the purchase price of a lease (the ‘lease premium’).

Example

In May 2021 you buy a house for £275,000. The SDLT you owe will be calculated as follows:

• 0% on the first £125,000 = £0
• 2% on the next £125,000 = £2,500
• 5% on the final £25,000 = £1,250
• total SDLT = £3,750

Six weeks have passed very quickly since we re-opened our office on 1^st June 2020.

The systems that we have in place are operating perfectly, and the strict risk assessment that we completed has allowed us to guarantee the safety and comfort of staff and clients.

The positive feedback from clients has been very rewarding. Thank you so much to everyone who has been into our office and complimented us on the environment that we have set up.

If you’re comfortable with home visits we continue to offer that option and our lawyers have been trained to comply with government guidelines. We have ample supplies of PPE should that be required. Our proudest achievement, however, is the transformation of our office, so feel free to pop in and visit us.

We’re delighted to say that we will be re-opening our office on Monday 1st June 2020. Staff are returning in stages and some will continue to work from home.

Every part of the premises has been deep cleaned and zones have been defined and clearly marked.

All visitors can rest assured that their safety is our priority. We guarantee that you will be taken care of, and that the changes we have made have been undertaken in accordance with government guidance and our comprehensive risk assessment.

Social distancing will be maintained without difficulty, in staff sections and reception and meeting rooms. Cleaning routines and provision of anti-bacterial hand gel ensure that we will provide a safe and comfortable environment for everyone.

We very much look forward to welcoming you all next week.