A Recent Study Predicts Greater Demand for Inheritance Tax Advice

Prudential have carried out new research showing that financial advisers are forecasting a sharp rise in demand for Inheritance Tax advice. It was found that 7 out of 10 advisers interviewed expect demand for IHT planning to grow over the next 12 months. However 17% of advisers feel that due to regulatory changes, they are not sufficiently confident in advising on IHT issues and are looking to develop links with legal firms.

The study shows that part of the increase in demand for IHT is due to the new IHT rules that came into effect in April this year. These rules are complex and comprise an additional £100,000 per person residence nil-rate band. This limit will increase each year and complements the standard nil rate band to provide a potential £1million IHT allowance for a couple in 2020/21

Increased access to pension savings as a result of Pension Freedoms and the ability to leave pension wealth to family as well as rising property prices are other major factors.

Paul Harrison, Head of Business Consultancy at Prudential commented “Rising property and pension wealth are making it increasingly important for advisers to be able to help clients with specialist advice on IHT planning and demand for advice is booming.”

“One specialist area that is driving demand for IHT advice is enquiries about using trusts”

If you would like advice on inheritance tax planning then please contact a member of our Private Client Department who will be happy to help you. Please find out more at http://www.mitchells-roberton.co.uk

A Recent Report Gives Insight into Housing Market Activity in Scotland

Registers of Scotland have released a new report which gives an interesting insight into property market trends over the past ten years. It reveals that the total value of the residential sales market in Scotland from 2007-08 to 2016-17 reached over £143.4 billion.

“The Scottish property market is a significant component of the Scottish economy” explained RoS business development and information director Kenny Crawford. “In 2016-17 the total value of residential sales alone was £16.7 billion, an increase of 1.0% compared with 2015-16”

Mr Crawford further states that “We’ve also seen an increase in average house prices over the decade, up 7.7% when comparing 2016-17 with 2007-08.”

“Overall house prices remained relatively stable across each year of the decade, with the exception of a more pronounced year on year increase between 2013-14 and 2014-15.

Other report findings include:

  • New-build property sales accounted for 12% of the all Scotland sales in 2016-17 with a total of 12,014 sales
  • There was a 36.2% decrease in the number of residential properties sold for over a million pounds when comparing 2007-08 with2016-17 although this should be seen in the context of a drop of 32.8% in total sales volumes between these years.
  • A drop of 30.3% in the number of sales being registered with a mortgage when comparing 2007-08 with 2016-17
  • A market value of £4.1 billion for non residential sales in 2016-17
  • A 5.3% increase in the volume of commercial leases from 905 in 2015-16 to 953 in 2016-17

Latest data from Halifax shows that there has been a 3% fall in property sales between March and April 2017 to 99,910. This followed three successive months when sales were above 100,000.

According to the Halifax supply continues to be an issue for the housing market. The number of properties coming on to the market fell for the 14th consecutive month in April which kept the average stock levels on estate agent’s books close to a historic low.

If I can help you with buying or selling a property in Scotland then please contact me Alison Gourley by email on ajg@mitchells-roberton.co.uk or by telephoning 0141 552 3422.

Dealing with Dilapidations- What Tenants Need to Know

A commercial lease will contain a repairing obligation which sets out the extent of a tenant’s obligations to maintain and repair the leased subjects.  The tenant is generally obliged to return the property in a “good and tenantable condition”.  Importantly, this obligation may require a tenant to put the property into a better condition than at the start of the lease (if the property was not in a “good and tenantable condition” at that time.

A tenant who fails to meet these repairing obligations may find that she or he is presented with a bill at the end of the lease for “dilapidations” being the landlord’s estimate of the cost to bring the property up to the required standard.

The potential for dilapidations at the end of the lease is, therefore, a very important consideration when negotiating a new lease as a tenant should, along with the obvious outlays (rent, rates, utility bills, service charges, fit out costs etc.) be budgeting for a potential dilapidations liability at the end of the lease.  Getting the drafting of a repairing and dilapidations clause right from the outset is essential so that the tenant can make an informed estimate of their liability during and at the end of the lease. This is a complicated exercise and a number of factors have to be taken into account:

  • The age, size and character of the property
  • The length of the lease
  • Is the tenant taking on a lease part of the way through?
  • Is there a Photographic Schedule of Condition attached to the lease to limit the tenant’s repairing obligation to keeping the premises in the same condition as shown in that Schedule?
  • The extent of the repairing obligation. Does it cover repairs to the roof for example? Does the tenant have to redecorate at the end of the lease? Is the tenant responsible for historic, or latent & inherent defects?
  • Has the tenant’s fit out to be removed at the end of the lease?

A lease usually allows a landlord to serve what is known as a Schedule of Dilapidations detailing repairs needed to the property at any time during the lease and at the end of the lease. The Schedule especially at the end of the lease is usually prepared by a surveyor.

Where dilapidations exist, a commercial lease normally provides one of three options (usually at the discretion of the landlord):

  • The tenant can complete the works at their own expense and if they fail to do so then  the landlord can complete them at the tenant’s  expense;
  • The landlord can complete the works at the tenant’s expense; and
  • The tenant can pay to the landlord a sum equivalent to the cost of putting the property into the condition it should have been in had the tenant complied with their repairing obligations.

Whilst this area of law is complicated and ever changing, issues at the end of the lease can be dealt with by a little thought and consideration at the start of the lease.  It cannot be stressed enough that getting the repairing and dilapidations clause right from the very beginning  is essentially important to prevent the tenant having a nasty shock at the end of the lease.  This in conjunction with a building survey should ensure that a tenant is aware of what might await her or him come the end of the lease.

Our Commercial Property and Property Litigation experts are here to provide information and advice. Please find out more at http://www.mitchells-roberton.co.uk

The First Digital Memorial Garden in Scotland

The first digital-led memorial garden is to open in Saline in Fife after Landsales Direct, a Scottish company won planning permission. The garden will feature small plots of ground in which purchasers can place mementoes of loved ones. However the plots will not be marked out with any visible signs and can only be located using digital technology on smart phones. John MacCallum of JM Planning Services, who is the planning agent representing Landsales Direct said “ The means of people locating the time capsule for their loved one will be through digital technology so they will be able to access it using a QR code.”

The idea of a historic cache of goods or information placed with the intention that they will be accessed at a future date by using a QR code seems somewhat at variance. It is widely debated when time capsules were first used but current evidence suggests they were used as early as 1876 but may be prior to that. In 2014 a Revolutionary-era time capsule was found at the Massachusetts State House dating back to 1795. And now in the digitally- led new memorial garden  items will be interred  along with a buried microchip and a “life story” website  about the deceased person can be triggered  on their phone using a QR code.

So what is a QR code? It is a Quick Response Code which is a type of two-dimensional barcode that can be read using smart phones and dedicated QR reading devices. Whilst a standard barcode stores up to 30 numbers a QR barcode can store up to a massive 7,089!

It is not clear how the memorial garden space will be allocated nor how the owners of the garden will package the various elements such as QR codes but what it does do is pose questions about ownership of digital assets after death. As most of us use some aspect of online shopping, banking or social media it can cause difficulties for executors to deal with your online assets after your death if you do not leave up- to – date information. This has to be balanced of course with the need to maintain security over passwords.

This first digital-led memorial garden I am sure will not be the last and there is little doubt that people should now be thinking about how their digital assets are dealt with when they are gone. If I can help in any way or you would wish to have more information please contact me Marcus Downie by email on marcus@mitchells-roberton.co.uk  or by phoning 0141 552 3422.

House Price Index Reveals Annual Price Rise

According to March’s edition of the UK House Price Index UK, house prices rose by an average of 4.1% on an annual basis.

Residential sales in Scotland rose by 2.0% to 6239 compared to January in the previous year , however this was 25.4% lower than sales during December 2016. Again in Scotland the average price of a property in March 2017 was £137,139 which is an increase of 0.7% from March 2016 but a decrease of 1% compared to sales in February 2017.

There were 746 property sales in Edinburgh City making it the top local authority in terms of volume of sales. The other regions in the top five were, Glasgow City (700 sales), South Lanarkshire (396 sales), Fife (391 sales) and North Lanarkshire (305 sales)

The biggest fall in house prices was once again seen in Aberdeen City with a 6.3% drop during March of this year compared to in March 2016, taking the average price to £163,050. East Dunbartonshire showed the biggest annual price increase where the average price increased by 10.7% to £196,332. Across Scotland, all property types except flats showed an increase in average price in March 2017 when compared to the same month in the previous year. Semi-detached properties showed the biggest increase rising by 2.3% to £144,261, while flats decreased by 0.1% to £98,012.

For expert legal advice on buying or selling property in Scotland then please contact me Alison Gourley by email on ajg@mitchells-roberton.co.uk or by phoning 0141 552 3422.

Update on Help to Buy (Scotland) Scheme

The Scottish Government has recently announced that the price cap on properties eligible for the Help to Buy scheme will remain at £200,000 in 2018/19. The scheme helps eligible householders buy a new build home from a participating builder by contributing up to a maximum 15% equity stake in the property. The aim behind the Scheme is to help more families onto the property ladder.

The Government says that by keeping the maximum property value eligible for the scheme at £200,000 from 1 April 2017 until March 2019, the scheme will help as many people across as many geographic locations as possible.

“We want to help people get on or up the housing ladder and Scotland’s Help to Buy Scheme gives a helping hand to thousands of people” explained Housing Minister Kevin Stewart.”

“We want to make home ownership as accessible as possible- with a particular focus on helping people to buy affordable new-build homes.”

“We know, however, that prices of property-and what constitutes affordable- can fluctuate massively across different parts of the country,” he said.

“That is why I have decided to retain the price cap on homes across, urban, rural and small towns in Scotland.”

For expert legal advice on buying or selling property across Scotland then please contact me Alison Gourley on ajg@mitchells-roberton.co.uk or by phoning 0141 552 3422.

The Bank of Mum and Dad

The Bank of Mum and Dad apparently is now Britain’s ninth biggest “mortgage lender” putting it on a par with the Yorkshire Building Society. Parents are predicted to lend more than £6.5bn this year to help their children get on the property ladder.  This is a 30% increase on the £5bn loaned in 2016 according to recent research from Legal & General and economics consultancy Cebr.  This means that parents will be involved in more than 25% of UK property transactions as first time buyers continue to struggle to afford homes.

According to the report, the so called Bank of Mum and Dad will help fund property purchases worth about £75bn in 2017 including deposits for more than 298,000 mortgages. Parental assistance is expected to have risen from an average of £17,000 in 2016 to £21,600 this year. For those under the age of 35 the proportion seeking help from parents, friends and family for property purchases stands at 62%.

Nigel Wilson, the chief executive of L & G said “This is the second year of our bank of mum and dad research programme and the statistics show the problem is getting worse, not better.”

“The intergenerational inequality that creates the demand for (parental) funding continues to widen- younger children today don’t have the same opportunities that the baby boomers had, including affordable housing, defined benefit pensions and free university education.”

“Parents want to see their kids get on in life and the bank of mum and dad is a testament to their generosity, but it is also a symptom of our broken housing market.”

The surge in parental lending comes in spite of record low rates on mortgages, fuelled by intense competition between lenders for new business. But while mortgage repayments have never been more affordable, high prices in parts of the country mean first time buyers need large deposits to qualify for loans.