Inheritance tax is one of those contentious areas of taxation which is almost impossible to pitch correctly to the electorate. With so many people having different views on the subject – and indeed single individuals capable of possessing seemingly conflicting views – it is very much a "damned if you do and damned if you don't" kind of affair.
Whatever the case, the process of inheritance tax and probate in general presents considerable challenges to the personal representatives of estates, regardless of whether they are executors or administrators.
Against this background, it seems a little disingenuous that the government should have recently proposed to raise probate fees in the way that they have. Gone will be the flat-rate system and instead will appear a tiered system to calculate fees based on the value of an estate – call it an additional inheritance tax by stealth if you like: a death tax per se.
Over recent years an increasing number of families have been stung by inheritance tax liabilities for which they were unprepared.
The tax liability surprise affects mainly those estates which stand to benefit from transferred pensions schemes when the testator has made the transfer knowing that he or she has reduced life expectancy or has died within two years of making the transfer.
For those falling foul of the HM Revenue and Customs rules there is only limited clarity regarding options when faced with such unexpected liability – indeed, it is a grey area of the law unfamiliar even to many of the UK's probate solicitors.
If you have children or grandchildren and see them easily navigating their way across multiple digital devices – whether laptops, smartphones, tablets, PCs, smart televisions or game consoles – it's unlikely to come as a surprise to you to learn that just about every single facet of human life is in the process of being disrupted by technology. And, yes, this includes all areas surrounding those twin certainties: death and taxes.
In fact, so inevitable is this disruption that we should no longer even be asking the question of whether it is going to make things better or worse. Instead, we should be looking to ask, since continued disruption is inevitable, how are we going to ensure that other inevitable, such as probate administration, are made better?
This year is already set to be a busy one for employment law and HR practitioners with a list of forthcoming legislation changes in the pipeline. Here's a brief guide for business owners on some of the key changes for 2017.
National Living Wage
This is a forthcoming change that has been relatively well publicised. The government announced in its November 2016 autumn statement that the National Living Wage (NLW), currently set at £7.20 for workers aged 25 and over, will increase to £7.50 from April 2017. The changes to the National Minimum Wage (NMW) for workers under the age of 25 may require closer attention year on year due to the rates being highly staggered. The rate for 21 to 24 year old workers will rise to £7.05 an hour, the rate for 18 to 20 year olds will increase to £5.60 an hour, and the rate for 16 and 17 year olds will go up to £4.05 an hour. The minimum hourly rate for apprentices will be set at £3.50 an hour.
From 6 April 2017, businesses with annual PAYE bills of more than £3 million will be required to pay a levy equivalent to %0.5 of their total annaul salaries to help fund additional apprenticeships over the next five years. Each UK employer paying the levy will receive an allowance of £15,000 to offset against their costs for apprenticeship levvies.
All organisations meeting the salary threshold will be required to contribute, regardless of whether they have apprentices, but those that have apprentices will be able to put the amount owed in a digital apprenticeship service account and, potentially, recover some of it for use in approved apprentice training programmes. Employers will receive a government top-up of 10p for every £1 put into the apprenticeship account.
Gender Pay Gap Reporting
Any gender pay gaps is to become compulsory to report for private sector and voluntary organisations employing 250 or more people under the Small Business, Enterprise and Employment Act 2015. The rules will also be rolled out to large employers (250 employees or more) in the public sector bodies in England but not Scotland and Wales.
The final version of the private sector gender gap information regulations has now been published and is due to come into force on 6 April 2017. Employers in scope will need to publish their first report by 4 April 2018, based on a ‘snapshot’ date of their pay gap on 5 April 2017.
Employers have to analyse and report on the percentage difference between male and female employees, as well as the percentage of men and women who received a bonus in the previous year, and the percentage of men and women in each hourly pay rate quartile.
The Equality and Human Rights Commission can take enforcement proceedings against employers failing to comply with the regulations, and any inaccuracies could lead to adverse inferences being taken against an employer in any subsequent discrimination tribunal claim.
Tribunal Enforcement Penalties
Under the Small Business, Enterprise and Employment Act 2015, which came into force on 6 April 2016, the government can impose a financial penalty on employers that fail to pay compensation awarded by tribunals or sums agreed under an Acas settlement agreement. This would be payable to the state, rather than the claimants. The fine will be 50% of the outstanding award, subject to a cap of £5,000.
The Department for Business, Energy and Industrial Strategy, has produced an employment tribunal penalty form to be used by claimants who have not received a tribunal award or an Acas conciliated payment. Claims for non-receipt can be made 42 days after the tribunal judgment, or following non-payment on the agreed date in a settlement agreement.
Tax on Termination Payments
From April 2018, all payments in lieu of notice (PILONs) will be subject to tax and national insurance contributions (NICs), regardless of whether there is a contractual right to make the payment or not.
The tax exemption for payments up to £30,000 made in connection with termination of employment, such as redundancy, will remain in place, but payments above that amount will be subject to both income tax and employer NICs.
There is a distinct feeling, shared among many divorce lawyers, lawmakers, religious organisations and indeed general members of the public, that the introduction of "digital divorce" would somehow trivialise the vows and institution of marriage.
It is easy to understand this point of view, to believe that to make divorce cheaper, more accessible and, ultimately, more attainable would only serve to undermine one of society's most traditional and sanctified of contracts. In short, they suggest, it would represent little more than another lurch down the slippery slope to eventual social Armageddon.