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Lasting Power of Attorney (LPA) refund
The Chancellor of the Exchequer, Philip Hammond, has written to the Office of Tax Simplification, asking for a review of the current inheritance tax regime, describing it as being “particularly complex”.
It is certainly the case that the recently introduced residence nil rate band has complicated rules associated with it, meaning that the way in which property is owned and Wills are drafted, can have a significant effect upon its availability. Many also consider the relief to be unfair, given that it is only available to individuals who have children or stepchildren. Whilst this relief has been extremely beneficial for many people, simplifying the rules and possibly making it more widely available would be welcomed.
However, past history has taught us that wherever the government looks to “simplify” inheritance tax, it generally means changing the rules at the expense of the tax payer and in favour of HMRC. The tax man took £5.3 billion from people’s estates last year and official projections suggest that a further £1.2 billion will be collected by the end of this tax year.
The letter from Philip Hammond refers to looking at how the current gift rules interact with the wider inheritance system and it may well be that the generous rule by which a gift of any size, made by an individual, after which that individual survives for 7 years, is free from inheritance tax, could be under threat. There have also been hints that a review of the generosity of rules surrounding the availability of business property relief and agricultural property relief, which often exempt trading businesses and farms from inheritance tax completely, could be on the cards.
It remains to be seen what the outcome of the review will be, but it is likely that anybody hoping for a reduction in their inheritance tax bill will be disappointed.
Meanwhile, in April 2017, the Office of the Public Guardian (OPG) reduced the fee for the registration of an Enduring Power of Attorney or a Lasting Power of Attorney (LPA) from £110.00 to £82.00. The OPG has now introduced a refund scheme in respect of payments made between 1 April 2013 and 31 March 2017 and the refund will include 0.5% interest. The refund will be made to the person who made the Lasting Power of Attorney, though the attorney is also able to make the claim and the refund can also be claimed by the executors of a person who registered a LPA but who has now died.
It will approximately take around 10 minutes to make the refund claim online by clicking here - or alternatively you can telephone 0300 456 0300 (option 6).