Archive for March, 2017

Staff Promotion – Mark Allan

Wednesday, March 8th, 2017

Prices-Rising
James & George Collie are delighted to announce that they have promoted Mark Allan, Solicitor to Associate.  Mark, with over 10 years’ experience in residential conveyancing joined the firm in September 2014 as an Assistant Solicitor and was quickly promoted to Senior Solicitor.  Mark is involved in a wide range of transactions, primarily acting in residential purchases and sales and dealing with ancillary or complex conveyancing matters. He also acts for clients in wills and powers of attorney.

Commenting on his promotion Mark said: “It is great to be recognised in this way.   James & George Collie is one of the longest-established (over 175 years old) legal practices in the North-east of Scotland and I am delighted to be associated with a highly respected firm with such a well-earned reputation for offering excellent service.  James & George Collie, with their long history and many existing, repeat and referred clients nevertheless have a modern ethos and have created an excellent environment for providing both existing and new clients with a high quality service and positive results.”

Anne-Maryse Churchill, Staff Partner, commented: “Mark is exceptionally hard working and we are delighted to recognise the contribution Mark makes to the Firm with this well-deserved promotion.  All of our staff are a key part of the Firm’s success going forward and we are committed to offering a high quality service to our clients.”

Cohabitation – What To Be Aware Of and How To Protect Yourself

Wednesday, March 8th, 2017

Prices-Rising
In 2006, everything changed with regard to cohabitees, thanks to the Family Law (Scotland) Act 2006. Before this Act, rights for cohabiting couples were limited, but since this came into force, cohabitees rights have been revolutionised. The Act clarified who ‘cohabitees’ were, and stated that in the event of a cohabiting relationship breaking down, couples now have the right to make a financial claim against the other in certain circumstances. This claim consists of a capital sum against the other party. It is up to the courts to decide if a capital sum is due, and they must take into account whether one party has suffered an economic advantage due to the other party being in the relationship, and whether that other party has suffered an economic disadvantage.

Case law has developed in this area, and various cases have been decided in Sheriff Courts across the country. Recently, the leading case of Gow v Grant helped clarify some of the different judgements made in the last 10 years. In this case, it was decided that the Act was not intended simply to enable the courts to correct and clear any economic imbalance which has arisen during the cohabiting relationship, but instead it was designed to enable fair compensation to be awarded for contributions made or economic disadvantages suffered by parties in the interests of the relationship. So, what does this mean for you? Well the courts now adopt a ‘broad brush approach’ when making awards to cohabitees. This means that they would perhaps make a capital sum to a woman who has not worked, and has stayed at home to bring up children, whilst her partner has been out working and developing his business.

It is important to note that there is a strict timescale for seeking a claim under the Act. This must be raised within one year of the parties’ separation. In reality, this is not a long time, so if you separate from your cohabiting partner, you should seek legal advice as soon as possible, in case you miss your chance to make a claim.

The Act also gives cohabitees the right to make a claim against the other in the event of death of their cohabitee, if the deceased died with no Will. There is a wide discretion to the court in these circumstances, however there is also a strict 6 month time-scale for this, so if you are in this position, please seek legal advice as soon as possible. A court action can however be raised within the above time-scale, and then simply frozen to allow matters to progress and perhaps settle. If you haven’t raised the action in time, however, you have missed your chance.

So, taking into account this change in law, how can you best protect yourself? Well, often the most obvious difficulty for cohabiting couples is in respect of a house purchase. When two people who are not married buy property together, if one party is contributing more money to the purchase, or the parties have an economic imbalance, then we can draft a Pre-cohabitation Agreement, setting out what would happen in the event of subsequent separation. This agreement would ring fence certain assets, or narrate what each party will receive in the event of a separation. Having this agreement saves a significant amount of legal costs, not to mention emotional strain, if your cohabiting relationship breaks down.

If you think that you need some advice on cohabitees rights, or simply want to find out a bit more, please contact Senior Court Solicitor, Jenni Wilson, by email at j.wilson@jgcollie.co.uk

JAMES & GEORGE COLLIE – CARING FOR OUR LICENSING CLIENTS

Wednesday, March 8th, 2017

Prices-Rising
The Alcohol Wholesaler Registration Scheme (AWRS)

News from HM Revenue & Customs affecting all licensed businesses……

This affects you:

  1. if you are a wholesaler, for example, a cash and carry which does not have an alcohol licence;

2. if you are a licensed retailer whether you are a corner shop, supermarket, brewery, distillery, alcohol importer etc and you know that you sell alcohol products to other licensed businesses/persons who sell or supply alcohol to the public for business purposes, for example, to restaurants, cafes, pubs, hotels, and event organisers, but please note that there may be other business affected, and you should check with Janet Hood or Tony Dawson (contact details below) for advice.

Wholesalers/Persons who sell alcohol to others for onward sale to the public – need to register by 1 April 2017

The Alcohol Wholesaler Registration Scheme requires wholesalers to be registered with HMRC.  Wholesales arise where any sale of alcohol is made to another person for trade purposes. Any retailer (shop or other business) licensed to sell alcohol who knowingly sells alcohol products to other businesses needs to register as an alcohol wholesaler under this scheme before 1 April 2017 or they will be committing an offence.

The application for registration is free and can be done online – https://www.gov.uk/guidance/the-alcohol-wholesaler-registration-scheme-awrs

Retailers – persons who buy alcohol from others for onward sale to the public must check the person(s) from whom they buy alcohol for these purposes is/are registered under The Alcohol Wholesaler Registration Scheme

From 1 April 2017, alcohol retailers must ensure they only purchase alcohol from registered wholesalers.  If alcohol is purchased from a non-registered wholesaler, the non-registered wholesaler and the trade purchaser may be prosecuted unless it is an incidental sale – for example, a one off purchase is made for a corner shop because, say, a restaurateur has run out of a particular alcohol product.

You need to ask to see the Alcohol Wholesaler Registration document issued by HMRC under the scheme and you might want to ask for a copy of the registration document to keep with your files/accounts to ensure proper due diligence.

The registration process is open and HMRC are taking applications.

If you sell to trade you should register now.

If you buy alcohol for onward sale to the public you should ask to see registration documents from persons selling you alcohol now.

You have till 1 April 2017 to do this but best advice is to apply early, to check early, to ensure you are compliant by 1 April 2017.

It is a criminal offence if you sell alcohol to trade and are not registered by that date and a criminal offence if you have not checked the registration of the person supplying alcohol to you by that date.

IF YOU NEED ADVICE OR ASSISTANCE with any of the issues raised in this article or any other licensing matter PLEASE contact either Consultant, Janet Hood at janethood@me.com or by telephone on 07718882837/01356648966 or Partner, Tony Dawson, at a.dawson@jgcollie.co.uk or by telephone on 01224 581581.

Market Overview – Quarter 1, 2017

Wednesday, March 8th, 2017

Prices-Rising
This last 6 month period of 2016 has been one of the most significant since the credit crisis and potentially marks a change in long term investment trends. Equities have strengthened worldwide, whilst in contrast there has been a continued downward trend away from the long term bull-run of the bond market.

The period began not long after the historic UK referendum result to leave the European Union (‘Brexit’) and ended shortly before the inauguration of Donald Trump as the 45th American President. Both of these events were once considered highly unlikely with Brexit odds in the middle of 2015 indicating less than a 25% probability whilst in August 2015 the probability of Donald Trump securing victory was around 4%. With Leicester City securing the Premiership title with starting odds of 5,000 to 1, 2016 certainly felt like the year of the longshot.

Although these events, at least prior to their occurrence, were considered as potentially negative outcomes the reality for most UK investors has been positive returns. A significant element of these returns has come from the fall in sterling after the Brexit vote which increased the value of overseas assets considerably. Nevertheless, global markets have also generally risen in local currency terms (including the FTSE 100) with the exception of fixed interest markets, which although positive after Brexit, fell back on the news of Donald Trump and this could be significant.

Periods of change are often quite difficult to spot until sometime after the event however it is hard not to notice that 2016 has witnessed dramatic events which will shape the future to be significantly different than previous expectations. There are potentially strong political and economic forces which can be identified that may combine to present both considerable risks and opportunities for investors.

In recent years it has become increasingly clear that whilst the benefits of globalisation can be seen there are also some unwelcome side-effects which have not been addressed. Whilst the wealth of all economies appears to have increased on the basis of averages, the distribution of wealth has not been equal. Research from Credit Suisse suggests that more than 50% of the world’s total wealth is now owned by just 1% of individuals suggesting not everyone has benefitted from globalisation because the benefit has not been spread evenly.

Brexit and Donald Trump became a mechanism for voters who felt unhappy about their situation to address the political classes and express their frustration. Whilst these voters were not generally represented by the mainstream media or the polls they registered in sufficient numbers at the ballot boxes to cause two of the biggest political surprises in a generation. This movement has been dubbed as ‘populism’ and could continue to gather momentum in other economies, particularly Europe where a number of elections will occur in 2017.

If globalisation has been a driver for lower inflation, then the more isolationist policies of Donald Trump in reducing free trade could revive inflationary pressures. Additionally, what are the long term effects of the many billions of printed money throughout the various global quantitative easing programs which remain underway in Europe, UK and Japan? Finally, how will the anticipated move away from austerity to increased Government spending impact on these two factors and could it act as a further stimulus? The answers to these questions are not clear but they do suggest strongly that future inflation expectations could be different to the past and the investment risk map may need some updating. Surveys referred to as Purchasing Managers Indices showed a remarkable rise in most global economies at the end of 2016, and especially unexpected was the measure in Europe which reached the highest point since 2011. These surveys are an indication of economic confidence and suggest that economic growth is continuing to rise. Inflation measures have also recently begun to rise although the significance is being played down by central banks that are reluctant to increase interest rates for fear of damaging consumer confidence. Taking all of these factors together there is strong likelihood that inflation will increase higher than current median expectations and interest rates will remain relatively low. Fixed interest assets with long maturities will be particularly sensitive to this change and valuations may fall significantly whilst short dated inflation linked securities will benefit together with companies whose business models can pass on price increases to their customers.

If bond markets do decline further the effect may be stimulatory as money which has been released through quantitative easing, but trapped in the icebergs of the frozen bond market, will begin to be freed and its presence will begin to be felt within the real economy as a stimulus.

We expect that history will mark out 2016 as a year of change and we believe that investors who understand the changes which are occurring will be able to increase their returns and avoid some losses as a consequence. Whilst the idea of returning to double digit inflation is out of the question, the very low inflation and interest environment could have bottomed leading to different future outcomes where traditionally higher risk investments which offer a natural protection against inflation behave with lower risk characteristics and vice-versa.

If you wish advice on, or to discuss, any of the topics in this article, please contact any of the James & George Collie Financial Management team by email at FSDepartment@jgcollie.co.uk

E-MAIL – AN EFFICIENT OR IMPERSONAL MANNER OF COMMUNICATING?

Wednesday, March 8th, 2017

Prices-Rising
There is no doubt that e-mail has transformed the way we communicate in business as well as socially but how impersonal and sometimes irritating it has become.  Long gone are the days of letters being sent with time to breathe before the reply arrived 2 or 3 days later!

The merits of e-mail in business cannot be disputed. It is fast and provides an archived record of communication.  Conversations by exchange of e-mails cannot be disputed.  Once the key is pressed however an e-mail cannot easily be recalled and therefore should never be sent in anger or in haste but only after careful deliberation.

Even I, as an “old-school solicitor” find that the format is ideal for communicating with a number of people at the same time, providing clear and precise instructions, setting up meetings, attaching documents and maintaining records of communications.  There are however disadvantages.  For example there is no guarantee when an e-mail will be opened and read particularly if it is an urgent communication.  E-mail inboxes are often overcrowded and important e-mails (particularly detailed e-mails with attachments) can easily be set aside to be revisited later and therefore be overlooked.

E-mails are impersonal and one of the unfortunate consequences is a lack of personal contact either in telephone conversations or meetings.  While e-mails can be convenient, particularly in the legal profession, it is important for solicitors to know their clients and to have face to face meetings for numerous reasons, including identifying your client.  There is a lot to be said for having a face to face meeting or picking up the telephone to make contact with your client.

A more serious aspect of e-mail is security, particularly for the legal profession. Privacy in business is crucial and of course all members of legal firms owe a duty of confidentiality to their clients.  There is a risk that e-mails can be intercepted or opened by recipients for whom they are not intended.  At James & George Collie we urge clients to take care and ensure before providing financial information that they send it to the intended recipient and if a request for such information looks dubious, then clients must relay such information by telephone or personally.

If only we could more quickly sift through all the spam we receive by e-mail from offers of fabulous holidays to funeral plans which, depending in one’s age, can be somewhat unsettling.

Little would Ray Tomlinson who invented the e-mail in 1972 have the remotest idea how it would revolutionise communication used by all ages from toddlers to grandparents and even great grandparents.  On balance what would we do without it!

The author of this article is Liz Mackinnon, Consultant, who can be contacted by email at e.mackinnon@jgcollie.co.uk

Inheritance Tax – New Residence Nil Rate Band

Wednesday, March 8th, 2017

Prices-Rising

From April 2017 a new residence tax free allowance is being introduced for Inheritance Tax purposes. How will this affect you?

At present Inheritance tax is payable at the rate of 40% on the value of the estate over and above the tax-free allowance (known as the ‘nil rate band’) of £325,000 per person. Married couples and registered civil partners can pass any of the unused allowance onto each other, effectively resulting in a maximum allowance of £650,000 between them.

In relation to deaths after 5th April 2017, if an individual’s estate includes a “qualifying residential interest” which has been his/her residence and which goes wholly or in part to descendants, the current nil rate band is subject to an enhancement. The enhancement is reduced for large estates. This enhancement, to the extent that it is unused on the first death is also transferable to the surviving spouse or civil partner. A claim must be made within two years of death.

In effect, the deceased’s estate must include an interest (usually ownership, but a liferent interest is also included) in a dwelling house which has been his/her residence. It does not need to be the main residence, the residence for any minimum period, the residence at the date of death or even situated in the UK. If there is more than one such dwelling house at the date of death, an election can be made for one to be treated as the qualifying residence.

The dwelling house must be transferred on death, to descendants of the deceased. As expected this includes children and grandchildren of the deceased. Also included are step-children, adopted children, foster children and any minors (under the age of 18) if the deceased is the minor’s guardian. Any descendants of individuals in this list are included. Also included are spouses or civil partners of lineal descendants. However if the lineal descendant has predeceased the deceased and their spouse or civil partner has remarried, they are no longer included.

The dwelling house must be inherited by one or more of the individuals listed either in terms of the deceased’s Will or under intestacy. If the property is inherited by way of Deed of Variation or by survivorship destination then this would also be included. The beneficiary does not need to live in the dwelling house and they can sell it following the death.

It should be noted that transferring the property into a discretionary trust on the deceased’s death, even if some of the beneficiaries of the trust are descendants, would not qualify. If your Will currently includes a discretionary trust, you may wish to consider why this was put in place and whether it is still relevant for your personal circumstances.

An individual’s nil rate band is increased by the “residential enhancement”. The maximum additions are as follows: £100,000 in 2017-2018, £125,000 in 2018-2019, £150,000 in 2019-2020 and £175,000 in 2020-2021. By 2020-2021 for a couple, the combined maximum nil rate band (£650,000) plus both residential enhancements (£350,000) will reach £1 million.

The residential enhancement will be reduced by £1 for every £2 by which the estate is over £2 million. If you are lucky enough that your estate (or your combined estate for spouses or civil partners) is likely to be in excess of £2 million then careful inheritance tax planning should be considered to prevent the residential enhancement being tapered away to nothing.

As with the current nil rate band, if the first of a married couple or civil partnership to die does not use all of his or her nil rate band, the percentage unused can be transferred to the survivor. The unused allowance can be transferred even if there is no home in the estate of the first to die. It does not matter when the first spouse or civil partner died, provided the surviving spouse or civil partner dies on or after 6th April 2017.

The new provisions also cover the scenario where a person wishes to downsize to a smaller property or sell their house to move into residential care. Therefore if the deceased formerly owned a qualifying residential interest which he/she has disposed of during their lifetime and has left other assets to descendants on death, there may be a downsizing addition to the nil rate band available on death.

Should you wish to obtain more information on the new residence nil rate band or should you wish to make a Will or review your current Will, please contact our Philip Dawson (p.dawson@jgcollie.co.uk) or our Vivienne Bruce (v.bruce@jgcollie.co.uk) by email or by telephone on 01224 581581.