Monthly Archives

February 2016

CMA to assess quality of UK legal services

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For a long time the legal services industry has seemed confusing and often expensive for customers, but it has been revealed that many firms themselves find the complex and overly stringent regulations system a nightmare to navigate.

The framework is seemingly just as complicated for solicitors and barristers as it is for the customer. But there is some hope for all parties in the form of a new CMA (Competitions and Market Authority) investigation.

The hope is that the investigation from an official body can help to tidy up a lot of the things which make the industry so complicated. One huge worry for The Law Society (representing over 130,000 solicitors for England and Wales) has been the overregulation of its members. It claims that regulations are too heavy compared to newer entrants in the law industry, who appear to go unregulated.

There is an added incentive for the legal sector to ensure everything is in order and that there is plenty of competition. Currently, there is around £30bn (estimated) in turnover for the economy tied up in the industry. In fact, a lot of the country’s foreign earnings come from the legal work done, with financial traders and oil traders among some of the top spenders.

A whole host of legal services are available across the country, with everything from family law to employment law involving multiple parties. The CMA investigation is set to study how the market currently works, with a possible referral for a more focused investigation to go deeper if it feels one is required.

The investigation comes on the back of survey results which saw customers claiming that the advice and service given to them was poor. Additionally, many small businesses claimed they only used legal services as their very last resort, with few finding them very useful for the money they have to spend.

Regulations currently work to protect the public when taking on board legal services, but with many operators feeling they are unduly scrutinised in comparison to others; there is a huge call for the regulation to be applied in a fairer manner across all organisations.

The Legal Services Act 2007 sets out some very specific rules on what customers can expect and how professionals within the industry should act. It’s hoped that these are upheld and strengthened by the CMA’s involvement, promoting access to justice for all and for professionals to work in the best interests of their clients.

At Barnes and Partners we know how important it is for customers to get value for money when obtaining legal services from solicitors. That’s why we welcome the CMA investigation and hope that the industry as a whole can be improved. We believe we already provide the best service, with experienced and compassionate solicitors. Simply contact us today for more information on any of our services.

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Families to pay highest inheritance tax in 35 years

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The last thing you want to be worrying about, either as someone leaving wealth behind to loved ones or as a loved one facing the loss of a family member, is the amount of tax placed on inheritance. With this is mind, the news that we are at a 35-year peak for the highest levels of inheritance tax will be unwelcome news.

The news comes only two years after Prime Minister David Cameron told the public that inheritance tax should only be paid by the rich. 1979-80 was the last time tax levels on inheritance were so high, with Margaret Thatcher at the helm. Back then the percentage stood at 75% on assets over £25,000.

It’s thought that over 40,000 families will face tax on inheritance, with the figure climbing over the next few years. The reason so many families could be taxed is thought to be down to the housing market. Where many people leave property in their wills, the fact that house prices have continued to rise over several decades means many people now slip into the taxable bracket.

The figure of 2.6% deaths in 2009-10 being liable for inheritance tax has risen dramatically, standing at roughly 7.1% right now and estimated to rise further to 8%.

Why the high rates?

Some have claimed that the rise in tax on assets left behind after a person’s death has been a cash grab for the tories, particularly after the economic crash in 2007. However, Chancellor George Osborne has outlined plans for a new relief programme to take effect from 2017. This relief shapes up to put the family home in a tax-free, transferable position, with the amount estimated to be £1m when a couple jointly passes on a home to those assigned as their heir in their will.

Back in 2014 it was reported that the UK had the second highest inheritance tax rate in the world, behind only Ireland. This news could be a driving force behind the Conservative government’s plans to introduce tax-relief, but still looks somewhat harsh when numerous other countries have scrapped their inheritance tax altogether – Australia and New Zealand being the two notable examples.

What should I do with my will?

One trend which has emerged, as people try to shield their children from the heavy inheritance tax, is to “gift” property years before death. This has led to the suggestion that the high tax rate in the UK – because of the value of property which is inherited – is too high, with families who aren’t supremely well off fearing that their heirs will not see the benefit of their accumulated wealth.

With the turmoil surrounding inheritance tax, it’s always best to seek professional advice when organising your own affairs.

At Barnes and Partners we are always on hand to assist you with will writing, helping you to provide the best arrangements for your assets – we even cover will disputes. So don’t let your will weigh on your mind, contact us today for professional, compassionate assistance.