real_and_personal_summer_2011
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http://www.stoneking.co.uk/sites/default/files/literature/real_and_personal_summer_2011.pdfTRANSCRIPT
We all want to ensure our loved ones are
well provided for when we shuffle off this
mortal coil.
But passing on our assets to the next
generation is not always straightforward.
Until recently it was insurance companies –
not the relatives left behind – which often
stood to benefit. Not any longer.
Rules that effectively forced savers to
convert their pensions into annuities by the
age of 75, providing them with a guaranteed
pension income, have been scrapped.
This is good news for those of us who want
to pass on any unused pension funds to
family and have greater control over our
pension pots.
The old deadline meant that many
pensioners had to buy an annuity when
rates were poor or continue to draw
income from the pension fund and face a
possible 82 per cent tax charge on death,
as opposed to a 35 per cent charge if they
died before 75.
“Most people felt compelled to take out an
annuity to avoid paying this draconian tax,”
said Matthew Braithwaite, a solicitor with
Stone King’s trusts and estates team.
“But when they died, any remaining capital
went to an insurance company rather than
their loved ones. This meant there was no
lump sum death benefit to pass on to
relatives.
“But new rules introduced in April this year
have changed all that. Under the new rules
which came into effect on 6th April there will
be just one 55 per cent income tax charge,
irrespective of a person’s age on death.
As a consequence, you no longer have to
convert your pension fund into an annuity
once you reach the age of 75 but can
continue to draw down your pension.
“Any amount left in the pension fund when
you die will now be subject to a lower tax
charge of 55 per cent, not up to 82 per cent
as before. This means that you can then
pass on any unused pension to a surviving
spouse or dependant children as a lump sum.
The tax-free status of pension lump sum
death benefits payable before retirement
remain unchanged under the new rules and
it is still the case that you should consider
nominating any lump sum death benefits
into a trust.
“Nominating your lump sum death benefit
to a trust would provide a managed fund to
hold assets if those you want to benefit are
either too young or are unable to look after
their own affairs; and also avoid bringing
the lump sum within the estate of a
surviving spouse or dependant, only to then
Contents
Personal Affairs News Summer 2011
real & personal
1-2 Annuity rules relaxed
2 The asbestos time bomb
3 Closing the gender pension gap
4 Traffic law team launched
Annuity rules relaxedWhat the changes mean for you
It’s the single biggest cause of work-
related deaths in the UK. Asbestos kills
a staggering 4,000 people every year -
more than die in road traffic accidents.
One could be forgiven for thinking that
the problem had gone away thanks to
better industry regulation. But the
shocking reality is that the epidemic of
asbestos related illness and death has
yet to peak.
This is because symptoms can take
decades to emerge so many workers
exposed to asbestos 20 or 30 years ago
have still to fall ill. Asbestos related
diseases range from asbestosis, which
causes damage to lung tissue and
breathlessness, to the incurable cancer
mesothelioma.
Making a successful claim for an
asbestos related disease requires
specialist legal and medical knowledge
according to David Milton, a personal
injury specialist at Stone King.
“The key point to consider here is the
time of diagnosis,” said David. “A claim
for an asbestos related disease can be
brought many years after exposure but
must be started within three years of
the sufferer becoming aware of the
diagnosis, and that the likely cause
was a previous exposure to asbestos.
“But many sufferers believe mistakenly
that a claim must be made within three
years of exposure, rather than diagnosis,
and don’t pursue their old employers.
This means that some sufferers and their
families could be losing out on
compensation.”
David added that it is up to the claimant
to show that their former employer owed
them a duty of care and that the level of
asbestos exposure was sufficient to
constitute a breach of that duty.
“It’s vital to establish a direct causal link
between the respiratory symptoms and
the asbestos exposure,” he said. “A key
question is what symptoms, if any, would
the claimant have suffered had the
employer not been negligent in
permitting the exposure. We work closely
with experienced respiratory physicians
and engineering experts to establish this
direct causal link on behalf of our
clients.”
However, establishing just who is liable
in such cases is not always easy.
“Difficulties arise if the claimant has
worked for a number of different
employers, or if the same employer has
used different trading names, “added
David. “If the employer is not insured
then it may not be worth pursuing them.
“And given the long length of time before
people fall ill, there is the question of
whether the company responsible still
exists. However, it is possible to apply for
the restoration of a company to the
register just for the purposes of bringing
a claim.”
Stone King has access to an extensive
database containing information about
previous claims, the companies involved
and details of their insurers. This
information can prove invaluable when
pursuing cases on behalf of claimants
and their families.
But mounting a successful claim for an
asbestos related disease can take time
because witness statements have to be
gathered, employment and tax records
obtained and medical opinions sought.
“It’s therefore crucial that you seek
specialist legal advice as quickly as
possible if you, or someone close to you,
has been diagnosed with an asbestos
related disease,” said David. “Our personal
injury team represent claimants on a no
win, no fee basis and we can advise you
on the potential merits of your claim.
“We know that a diagnosis can be
devastating for sufferers and their
families and understand the need for
great sensitivity at such a difficult time.”
David concluded: “People need to be
aware that this isn’t a problem of the past
- it’s very much an ongoing issue. Sadly
for some sufferers justice comes too late
or not at all.”
The asbestos time bombIndustrial disease claims set to peak
be subject to an inheritance tax charge on
their death.
Matthew added that pensions have become
even more attractive investments to savers
who want to pass on their nest egg to family
members and at the same time avoid
inheritance tax on their death. While a 55
per cent tax charge may sound steep, it is
a great improvement for the over 75s.
“You can’t avoid paying the 55 per cent tax
charge” he said but can now make provision
for those you leave behind through the use
of a trust to receive any remaining lump
sum.
“Whether you want to ensure flexibility over
how your assets are used, or reduce your
tax burden, Stone King’s trusts and estates
team can help.”
Annuity rules relaxed - What the changes mean for you (continued)
Closing the gender pension gap New ruling could alter payouts for divorcing couples
Women are statistically safer drivers
than men and have long enjoyed lower
insurance premiums as a result.
They fare less well, however, when it
comes to pensions as women tend to live
longer than men and so receive smaller
annual payouts when they retire. Such
financial disparity can become a major
issue when a couple decide to separate.
But the European Court of Justice (ECJ)
has ruled that gender discrimination in
the pricing of insurance is to be outlawed
from December 2012.
“The effect of this will potentially range
from the cost of car insurance - with
women being expected to lose out on
reduced premiums from which they have
benefited for years - to pension annuity
rates being brought in line, regardless of
gender,” said Caroline Fell, a solicitor in
Stone King’s family and mediation team.
“It is this element which highlights the
issue of the disparity in pension positions
which currently exists between many
men and women, and the consequent
necessity for this to be considered when
a couple separate.
“After a long marriage, it is often the case
that, other than the family home, the most
valuable assets of the family are the
couple’s pensions. Although this is perhaps
a little stereotypical, where the husband
has been the main breadwinner through
the marriage and the wife has spent some
or much of the marriage caring for the
children, it tends to be the husband who
has accrued the largest pension.
“So, on separation, it is important to
ensure that any major differences in the
couple’s pension positions are not simply
overlooked as this would risk resulting in
one party to the marriage being
significantly worse off in retirement than
the other. “
So how can this disparity be addressed
as the law stands currently? Stone King
offers the following advice:
1. Pension sharing
It is possible for a pension fund to be
‘shared’ between a divorced couple. This
would provide a share of the (usually)
husband’s pension fund to be invested in
a separate pension in the wife’s name,
therefore providing her with an entirely
independent pension which would be
unaffected by the husband’s death or
either of them remarrying. The share
which the wife would receive is often
calculated by assessing what share
would provide both the husband and the
wife with equality of income on
retirement.
2. Offsetting the value of the pension fund
Where there are other assets available
to the family, it may be possible to agree
that the party with the lower pension
provision receives a larger share of the
other assets, such as the family home
or savings/investments, by way of
compensation for the difference in the
pension funds. Careful consideration
would need to be given as to the impact
which this would have in retirement and
whether the alternative distribution does
indeed compensate for the loss of
pension benefits.
3. Pension attachment
This is a relatively rarely used process
which allows for a portion of the
husband’s pension to be paid to the wife
on his retirement, direct by the pension
providers. However, the primary
disadvantage with this arrangement is
that the portion would no longer be paid
if the wife remarries or the husband dies,
which tends to be why this provision is
used only infrequently.
“It can therefore be seen that there are
mechanisms which allow for fairness to
be achieved with regard to pensions on
divorce,” added Caroline. But how does
the recent ECJ decision impact on this?
“The decision relates primarily to the
calculations made on assessing the
appropriate pension share which is to
be paid to the wife,” said Caroline. “At
present, as a woman’s life expectancy
is greater than that of a man, the annuity
rates differ and this affects the
calculations accordingly.
“If annuity rates are no longer gender
specific, this could potentially result in a
noticeable difference in the calculations
made. It is therefore important that very
careful advice is obtained to ensure that
fairness is provided when looking at
pensions on separation.
“As ever, the constant changes to
financial rules and regulations do little
to assist in making informed decisions
when planning for the future. However,
it is a useful reminder that pensions are,
and indeed should remain, a central
issue for consideration when a couple
separates and expert legal advice should
be sought in such situations.”
Real and Personal deals with some current legal topics. It should not be used as an alternative to specific legal advice on the individual circumstances of a particular problem.
www.stoneking.co.ukBath � London � Cambridge � Melksham
Stone King LLP - registered limited liability partnership no OC315280, registered office 13 Queen Square, Bath BA1 2HJ T: 01225 337599
© Stone King LLP 2011 05/2011
The use of increasingly sophisticated
technology by police has resulted in an
increase in the number of people being
prosecuted for motoring offences.
But it’s often possible to reduce or even
overturn penalties and driving bans,
especially if there are procedural errors
in the prosecution case or if equipment
has been used incorrectly.
Stone King has successfully defended
thousands of drivers over the years with
expert legal advice and has now launched
its own specialist traffic law team.
The new team is made up exclusively of
five experienced solicitors with more than
71 years’ courtroom experience between
them. This means there are no
paralegals, sales team or clerks.
The traffic team deals with motoring
matters ranging from speeding, parking
tickets, and drink-driving to more serious
cases of causing death by dangerous
driving. It is run by Emma Haley, an
experienced courtroom advocate who
specialises in traffic law.
“The number of drivers who we have
successfully defended continues to
grow,” said Emma. “Last year alone we
dealt with several hundred such cases.
Our work includes advising motorists on
the best possible outcome and agreeing
objectives. Our success rate in achieving
those objectives is 99 per cent.
“So we have decided to set up our own
dedicated traffic law team in order to
build on this success and ensure we
continue to provide a first-class legal
service to motorists.”
Working alongside Emma is Andrew
Banks, newly appointed partner and head
of the firm’s crime team, who specialises
in transport law and whose expertise is
highlighted in the prestigious Legal 500
directory.
Andrew and fellow team member
Jonathan Lewis are both higher court
advocates which means they can conduct
cases in the crown court as well as
magistrates’ court. Other members of the
team include Celia Strathdee, who has
27 years’ legal experience, and Richard
Kirby, a former court legal adviser.
Emma added: “Very few people think of
motoring offences as crime, but in fact all
motoring offences are dealt with in the
criminal courts. Thus, they are subject to
the strict rules of criminal evidence. And
that’s where our traffic team comes in.
“Whatever the driving offence, expert
advice from lawyers experienced in road
traffic law can often make the difference
between you losing your licence – and
possibly your job – and keeping it. So if
you are being prosecuted for a motoring
offence contact us for free initial advice.”
If you would like to talk to Emma Haley
or any other member of the traffic team,
please call 01225 337 500 or 0759
5491041 or email
Traffic law team launched