Moving home and COVID-19

I am writing this just as our Prime Minister Boris Johnson tells us that 6 is the maximum we can have at a gathering in our homes or in our gardens and the 6 must be from no more than 2 separate households. What about my Christmas day lunch I immediately thought when traditionally I have a gathering with my extended family who do not live locally and my neighbours. We have spent Christmas together nearly every year for the last 10 years. A selfish thought I know when there are others with far more serious problems. It will all have changed by Christmas day anyway so no point worrying about it now.
In the meantime the housing market gathers pace. Home owners who were putting off a move for 1 or 2 years are now taking advantage of the stamp duty saving and moving immediately. If purchasing a home at £500,000 then this can save you £15,000 in stamp duty. This enables purchasers to obtain a more valuable home for their money than they would have otherwise been able to purchase.
HM Land Registry records show that in the 2nd quarter of 2020 completed transactions registered in England and Wales were down by 65% from the 1st quarter.. The 2nd quarter was the first time on record that quarterly transactions fell below 100,000. April 2020 saw just 440 transactions registered – less than 1% of the 55,000 total in March. In May 2020 there were 25,459 registrations and more than double that in June. This increased work load was very noticeable at legal firms including Dixon Stewart. Many were still working with reduced staff or staff working from home and it was a struggle to manage home movers expectations and deal with the work. Estate agents were selling homes as soon as they came on the market and were finding it difficult to keep up with their paperwork.
HM Land Registry records show that the number of active legal firms fell to an all time low of 317 in April 2020 rising to 3,735 in June. This is still less than the number of firms operating in the 1st quarter of 2020.
Legal firms are adapting to new digital ways of working in order to maintain activity. I have not been able to manage working from home. I struggled to get to grips with a laptop and much prefer sitting in my office with my computer and my paper files. I feel proud of myself though that I managed some zoom and team meetings on line. I realise however that working life may never be the same again. This is evidenced by my daughter starting her 1st graduate job from the dining room table at home. Being in her 20’s I am sure she will cope far better than me.
If you do require any assistance with a home move then please do call us we are very happy to help.

Stamp Duty Holiday

Even before the Chancellor announced the stamp duty holiday on Wednesday 8 July estate agents had seen unprecedented demand from people wanting to buy property. Certainly at Dixon Stewart June 2020 was a far busier month for new instructions than June 2019.
How does the stamp duty holiday work? The tax threshold has been temporarily raised until March next year to £500,000 in England and Northern Ireland. Anyone completing on the purchase of a main residence between 8 July and 31 March 2021 will not pay any stamp duty. More expensive properties will only be taxed on their value above that amount. Buyers will save as much as £15,000 if they are buying a property of £500,000 or more.
Clients who had already exchanged contracts on a house purchase with completion for 8 July onwards got an instant saving on money they had already paid to us. The Government hope that they will use this money in order to help boost the economy by purchasing something new for their home or carrying out improvements.
The stamp duty holiday is intended to boost a property market hit by lockdown and to help buyers who have taken a financial hit because of the coronavirus crisis. Buyers will be in a better positon to qualify for a mortgage as reduced stamp duty allows them to pay a larger deposit. Sellers are more likely to come to the market during this period when they believe buyers will have more money to spend.
There is a concern that while the stamp duty holiday may boost the property market in the short term it could also lead to a spike in sales that pushes up prices before the deadline followed by a slump next spring. This was observed in 2016 before the 3 per cent buy to let and second homes surcharge was introduced.
Extending the stamp duty holiday to help buy to let purchasers and second home purchasers was a surprise. Investors have in the past been hit by higher taxes. Before the stamp duty holiday they would have paid £30,000 in stamp duty on a £500,000 purchase. They will now pay £15,000.
First time buyers who were previously exempt from paying stamp duty up to £300,000 will lose their special status during the holiday paying the same rates as people moving home.
The Chancellor also promised that from September homeowners and landlords upgrading the energy efficiency of their homes would be able to apply for vouchers to cover at least two thirds of the costs of improving their properties up to a maximum of £5,000.
Finally nothing to do with house buying the Chancellor introduced the “eat out to help out” scheme. From Monday to Wednesday throughout August a 50% discount on food and non-alcoholic drinks to a maximum value of £10 per person will be available at restaurants, pubs and cafes who sign up to a new government website. If you decide to take advantage of this offer enjoy yourselves but keep safe.

Long or short term care

It seems like a long time ago now that I was allowed to visit my clients in care homes. I remember one care home I visited that had a “beach” with sand, sun loungers and a little cocktail bar on the middle floor. I thought that if someone I loved needed to have residential care I would want them to be in a place like this. A place where the management and staff quite clearly cared very much about the quality of life people had in the last years of their life. Places like this do not come cheaply.

Apparently there are over half a million people living in care. One hundred and thirty thousand people will move into care in the next 12 months. Around fifty eight per cent of the five hundred thousand are funding their own care. Shockingly less than twelve per cent of those people have taken any sort of advice – legal or financial before moving into care.

How can you ensure that you have the best possible care for the rest of your days? How can you have this peace of mind and yet still preserve some inheritance for your family?

Many local authorities realising that they have a huge burden in providing care for their communities are now forming partnerships with solicitors and financial advisers in order to ensure that community members receive the best possible advices about using their monies to provide for themselves and their families.

If you have a need for care whether in your own home, in a residential home or in a nursing home then please be one of the twelve per cent who takes advice. There are all sorts of things you need to think about. Are your wills up to date? Have you made lasting powers of attorney for your property and financial affairs and for your health and welfare? Are you claiming all the allowances you are entitled to? Are you making the best use of your assets to ensure that your capital lasts longer to fund your care either at home or in a residential or nursing home?

Have you thought of a long term care plan? An investment you make when the need for care arises in order to fund the shortfall between the cost of the care and your income. The income you receive from the investment is paid directly to the care provider and is tax free. If you get better it can be paid to you (but you will then have to pay income tax on the income received). It gives you the peace of mind of knowing that your care will be funded by the care plan provider for the rest of your days. You do not run the risk of the care home asking you to pack your bags and move to a different home because you have run out of money. You can continue to receive 5* care in a 5* home. You can ensure that you leave some monies over for your family.

If you would like advices about any of the above then please do contact Dixon Stewart. We are here to help.

Moving House

26 March 2020 the Government urged house buyers to put their imminent property moves on hold during the UK lockdown designed to stem the tide of coronavirus. Housing Secretary Robert Jenrick said those due to move house should rearrange to a new date and delay the process of changing property. He said that even those scheduled to move on Friday should rethink plans to bring in the removal vans. He tweeted “I know that many people across the country are due to move house tomorrow. Whilst emergency measures are in place, all parties should do all they can to agree a new move date” This meant there were a lot of people who had exchanged contracts who had to work with other parties in a chain to agree a new move date. Mortgage lenders agreed to extend mortgage offers to enable this to be done. The Housing Secretary estimated that some 450,000 buyers had to put their plans on hold. There was a pause in operations for high street estate agents.
14 May 2020 government guidance gave the go-ahead for estate agent offices to open for business provided they considered how and when to reopen their offices in line with safer working guidance and social distancing measures.
Between 26 March and 14 May we had continued working trying to progress matters so that as soon as people could move home we were in a position that they would be able to do so. It had been quite peaceful but on 14 May the telephones started ringing again and people were wondering when they were going to be able to move. A lot of pent up demand had built into the market during the lockdown.
While estate agents, surveyors, conveyancing solicitors and removal firms are eager to see the market return to normal, it will take time to adjust to new practises and ways of working. It is vital that everyone involved in the buying and selling of property observes Government guidance on social distancing in order to help ensure that the market can remain open long term.
Please do not visit offices, view houses or allow your house to be viewed if you are showing symptoms or if you have been asked to self isolate.
Please be flexible with moving dates especially if one of the parties in the chain falls ill with coronavirus or has to self isolate.
These are strange and difficult times but Dixon Stewart are here to help every step of the way with your house move.
If you do require any assistance with your house move or any legal matters then do give us a call.

Your Questions

Thank you very much for letting me have your questions on legal matters this month. Here are just a few of the matters you are interested in:

I am giving my son a deposit to enable him to purchase his first home. He is obtaining a mortgage too. How will this gift affect the mortgage?

The mortgage product will not change. Nearly all lenders are happy with family gifts. You may need to complete a gifted deposit letter for the lender or sometimes a lender’s special form. The lender will need to see a bank statement showing where the gifted deposit has come from. You should take legal advice separately from your son so that you understand that you will have no interest in the property he is purchasing and that you will have no right to have the money back

I have my home on the market for sale but cannot find a buyer. I want to buy another property as my main residence before I sell my home. Will I need to pay higher rate stamp duty?

Yes you will need to pay higher rate stamp duty if you complete the purchase of the new property before you sell your home. If you then complete the sale of your home within 3 years of the purchase of the new property you can claim the additional stamp duty back from HMRC. If you sold your previous main residence on 28 October 2018 or earlier then HMRC must have your request for a refund within 3 months of the sale of that previous main residence. If you sold your previous main residence on 29 October 2018 or later then HMRC must have your request within 12 months of the sale of that previous main residence or within 12 months of the filing date of the return for your new residence whichever is later.

I am an attorney under my father’s lasting power of attorney. Can I carry on operating my father’s bank accounts using this lasting power of attorney after my father dies?

No. The lasting power of attorney can only be used whilst your father (the donor) is alive. Upon his death the authority under the lasting power of attorney ends and it is his executor who then has authority to act. The executor and the attorney may of course be one and the same person but the executor will normally need to obtain a grant of probate to access your father’s accounts.

My husband died 5 years ago leaving me with a young family. I am remarrying next month but want to make sure that my home ultimately passes to my children. How should I deal with this?

Any Will that you presently have will automatically be revoked (cancelled) when you remarry. It is therefore very important that you make a new Will before your marriage. You can make this new Will in contemplation of your marriage and it will not then be cancelled by your later marriage. You can make provision in your new Will for your children and for your new spouse if you wish.

If there is a legal topic that you would like to read about then please let us know on enquiry@dixonstewart.com

New Beginnings

Spring is the start of new beginnings. New babies, new homes, or a new car.
If you are thinking of moving home then please do speak to Dixon Stewart. We pride ourselves on providing a good service to our clients because happy clients not only stay with us for their future legal work but they also recommend other clients.
In a recent poll two thirds of people voted moving home top of their stress list with it triggering more anxiety than relationship breakdowns, divorce and starting a new job. Let Dixon Stewart take the strain.
We will keep you advised about progress in the legal transaction and advise you if there are going to be any delays even if those delays are outside our control for example because we are waiting for contract paperwork to come from the seller’s solicitor or if we are waiting the results of our searches.
We will write to you in plain English without the use of unnecessary legal jargon so that you understand the process.
We will listen to your instructions because we care about what you wish to achieve.
We are happy to speak to you on the telephone or at a meeting in our offices or at home if you have difficulty coming to the office.
We will advise you of the cost of the work at the outset and the cost will not increase unless we agree any increase with you in advance because the matter has become unusually complicated or because additional work is required. This could be for example because the property you are purchasing needs a new lease or because you need to have a declaration of trust because you and your co-purchaser are making unequal contributions to the purchase of your home.
If you are having a mortgage for your home purchase then we will also usually be acting for your mortgage company. There would not normally be any additional charge for this.
Dixon Stewart have been established as solicitors in New Milton and Highcliffe for in excess of 50 years. We are accredited by the Conveyancing Quality Scheme for solicitors and have the experience and knowledge to ensure that your home move can be stress free. We can guide you through the legal process and give you any advice you need.
Please speak to us on 01425 279222 or 01425 621515 or on enquiry@dixonstewart.com if you are thinking of moving home or buying a new home soon

Leap Year

2020 is a leap year. Legend says that St Patrick decreed that ladies could propose on the one extra day in February. Increasing your inheritance tax allowances is not the most romantic reason to get married or enter into a civil partnership but it is certainly well worth your consideration. One of my colleagues was recently making wills for 90 year old clients who had been sweethearts for 70 years. When asked why they had not married they said “they just had not got round to it”. When she advised them of the inheritance tax consequences of dying whilst unmarried they quickly made arrangements and she was an honoured guest at their wedding.. Ken Dodd reportedly had the last laugh and saved £2.6 million in inheritance tax when he married his long term partner 2 days before his death.
Ken Dodd’s marriage highlights the current gap between the ways that a “common law partner” and a legally joined spouse or civil partner are treated for inheritance tax purposes. A surviving spouse or civil partner may inherit the entire estate of their spouse or civil partner without incurring any inheritance tax charge. If they inherit the whole estate of their spouse or civil partner then they also inherit additional inheritance tax allowances so that on their subsequent death they have their own inheritance tax allowance (currently £325,000) and that of their deceased spouse or civil partner (currently £325,000) to offset against the inheritance tax payable by their estate.
If we look at an example we can see how this works. Fred and Rose have lived together for 40 years. Fred dies leaving his £400,000 in savings to Rose. Fred’s estate pays inheritance tax of £30,000 and Rose receives £370,000. When Rose subsequently dies she has her own inheritance tax allowance of £325,000 to set against the £370,000 in savings meaning that her estate will pay a further £18,000 in inheritance tax. The total inheritance tax bill for Fred and Rose as “common law partners” is £48,000.
If on the other hand Fred and Rose were married then Fred could pass all his savings to Rose on his death without any inheritance tax liability. Rose will consequently inherit £400,000. When she subsequently dies she has her own inheritance tax allowance of £325,000 and Fred’s inheritance tax allowance of the same amount meaning that her estate will pay no inheritance tax at all. An inheritance tax saving of £48,000.
Since 2017 a residence nil rate allowance has been introduced to save inheritance tax currently giving persons with “direct descendants” an additional £150,000 inheritance tax allowance in certain circumstances. Married couples and civil partners can transfer their unused residence nil rate allowance to their surviving spouse or civil partner if certain conditions are met giving the surviving spouse or civil partner an additional £150,000 inheritance tax allowance. This residence nil rate allowance is not transferable if you are “common law partners”
The additional inheritance tax allowances that surviving spouses or civil partners may inherit can save £190,000 in inheritance tax (rising to £200,000 in April).. Persuaded yet to propose on February 29th? If you would like advices about wills, inheritance tax or the administration of estates then please do contact us.

New Year’s Resolutions 2020

May we take this opportunity of wishing you a happy healthy 2020.
When the festivities are over and the Christmas decorations have been put away make sure that your legal and financial affairs are in order. If you need any help with this then you can contact one of us at one of our Dixon Stewart offices in New Milton or Highcliffe.
In particular think:
1 Do I have a Will? A new survey by Will Aid has revealed that more than half of parents in the UK with children under 18 have made no will. There are regional differences with 63% not having wills in the south west. Writing a will is a chance for a parent or parents to leave clear instructions about who they would like to care for their child in the event of their death. If you die without appointing a guardian, and there is no other parent with parental responsibility, an application would need to be made to the court to decide with whom your child will live in the event of any dispute about this. Having a correctly worded will with a solicitor is the best way to ensure your wishes are carried out. Although the act of writing a will can be upsetting, the pain and disruption for your family if you have not written one is likely to be far worse.
2 If you have a will is it up to date? There have been a number of changes in the law particularly in relation to inheritance tax in the last 10 years and so it is important to ensure that the will you have is effective for the purposes of inheritance tax saving. You can contact one of our Dixon Stewart offices and ask us to carry out a free review of your will.
3 Do I have a lasting power of attorney in relation to both health and care and property and financial affairs? It is important that you have these documents in place so that if you become mentally incapacitated (in the case of a health and care lasting power of attorney) or physically or mentally incapacitated (in relation to a property and financial affairs lasting power of attorney) then the person or persons you have chosen to look after your health and care or your property and financial affairs have a legal document in place enabling them to do this on your behalf. In the absence of such a document if you lose mental capacity then an application would have to be made to the Court of Protection for the appointment of a deputy. An application to the Court of Protection is a much longer process; it is more expensive and the person who acts as your deputy would not always be the person you had chosen.
4 Book a holiday or a trip away so you have something to look forward to. That is not a legal or financial matter but we just thought we’d add it in to see if you were paying attention.
Once again a happy healthy new year to you all. We hope that we may be of service to you in 2020.

Wave 105 Mission Christmas Toy Appeal

We are again this year proudly supporting the Wave 105 Mission Christmas appeal.
Mission Christmas helps to ensure that children living in poverty in the Wave 105 region will receive a gift on Christmas Day.
Any gift which you wish to donate can be left with our Highcliffe office at 372 Lymington Road, Highcliffe, BH23 5HB.
Closing date for donations is Thursday 12th December. Thank you

Moving Home

I have purchased just 2 homes in my life. The 1st, in 1988, when there was a property boom and the second in 1996. The legal process was not that important to me. I just wanted to be in my new home. It is 23 years since I bought my last home and so much has changed.
It is impossible to mention here everything that needs to be done if you purchase a new home. I will not touch on surveys and mortgages for example but here is a snapshot of what happens if you fall in love with your dream property and your offer to purchase it is accepted.
The estate agent selling the property will forward a sales memorandum to your solicitor or conveyancer (solicitor) and to the solicitor acting for your seller. Your solicitor will have to verify your identity and check where your funds are coming from. Money laundering is a serious issue for solicitors and we need to know that the funds you are using are your hard earned monies and not the proceeds of a crime. Your solicitor will also need to check the identity of the seller’s solicitor and make sure that they in turn have checked that the seller has authority to sell the property. Identity theft has enabled persons to pretend they own a property when they do not and to try and sell the property to an honest buyer. You need to be very careful yourself that the person who you meet at the property is indeed the owner.
Once the identity checks have been carried out the seller’s solicitor will issue a contract pack to your solicitor. The type of contract pack will depend on the type of property you are purchasing but if for example you are purchasing a house it will comprise a contract, a copy of the official title from the Land Registry, a property information form completed by the seller and a fittings and contents form also completed by the seller. The contract is a legal document setting out the names of the seller and the buyer and the purchase price. The Land Registry title is an official copy of the Land Registry records showing the seller as the owner of the property and providing details of any rights or obligations that affect the property. For example rights of way. The obligations are called covenants and can include an obligation to maintain the boundary fences or not extend the property without consent. The property information form is divided into sections including boundaries, alterations to the property, disputes or complaints, guarantees and warranties. The seller is under a duty to divulge any information that he thinks a buyer should know but it is still up to you and your solicitor to make enquiries and carry out searches.
You need a solicitor who can do all of the above quickly and efficiently. At Dixon Stewart we take a pro- active approach. We know you want to be in your dream home. We do not want anyone to be waiting for us to carry out the next step unless there is a good reason. It is only when you and your solicitor are happy with the results of any enquiries and searches that you will be ready to exchange contracts. It is only then that the moving date is fixed (called the completion date). You are then free to book your removals, order new furniture and arrange your house warming party.
If you are thinking of moving home ask Dixon Stewart to assist you with your legal work. We know what is important and can help you achieve your dreams.