Court rules on a Living Will …

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The Court of Protection has ruled on a case involving a ‘Living Will’ or ‘Advance Directive’ following an urgent 2 day hearing. A man suffering from motor neurone disease was able to communicate only through eye movements. It was in this way that he had made an advance decision under the Mental Capacity Act 2005 to stop ventilation and artificial feeding when he lost mental capacity. The decision was witnessed and recorded.

Mrs Justice Theis ruled that in this case the advance decision was valid. The judge emphasised that the terms of advance decisions had to be clear and that ‘templates’ for advance directives might be reviewed in the light of this decision. It was also stressed that where there are concerns they should be investigated promptly so that the Court of Protection could deal with the case.

Mark Mullins of Outer Temple Chambers represented the wife and family.

European Court of Human Rights

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Reforms to the European Court of Human Rights were agreed at the Council of Europe Conference in Brighton. Changes to the Convention, promoted by the UK Government,

  • introduce into the Convention the principles of ‘subsidiarity‘ ( the principle that the EU does not generally take action unless it is more effective than action taken at national level) and the ‘margin of appreciation‘  (taking account of cultural, historic and philosophical differences between Strasbourg and the national authority)
  • tighten the admissibility criteria so that trivial cases can be thrown out and free the court to concentrate on serious abuses;
  • reduce the time limit for claims from 6 months to 4
  • improve the selection process for judges

The Declaration can be read here.

Care costs … deadline for recovery

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The costs of care are often a cause of great worry for those in their later years.  In many cases, residents are wrongly assessed to pay contributions when they ought to be receiving free care.

The NHS is responsible for the fees where the primary reason a person is in care is because of his/her physical or mental health. The guidelines in assessment for NHS Continuing Care are set nationally by the Dept of Health and are interpreted and applied by the local Primary Care Trusts.  Too often, the health need is not recognised as the primary reason for needing care especially in cases of mental health including degenerative conditions such as Alzheimer’s  and Parkinson’s or victims of stroke.

Those who have been wrongly charged fees can make claims for repayment but should be aware of the looming deadlines set out in a letter from Sir David Nicholson, the NHS Chief Executive, to NHS colleagues.:

  • Claims for recovery of costs incurred between 1st April 2004 and 31st March 2011 must be made by 30th September 2012.
  • For care costs incurred between 1st April 2011 and 31st March 2012, the deadline will be 31st March 2013.

If you, or someone you care for, may have a claim, ask us for a free initial meeting. But act quickly or the opportunity may be lost: claims must be registered with PCTs before these deadlines.

 

New tax year

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The Individual Savings Account (ISA) allowance for the 2012-13 tax year is £11,280 and can be taken up now. Up to half of the total (£5640) can be put into a cash ISA. Up to £3600 can be paid into a Junior ISA.

The cash ISA gives the benefit of tax free interest. Check the rates on offer and take note of the terms offered. If you have cash ISAs accumulated from previous years, have you checked that the rates are still competitive? It may be better to transfer savings to a different ISA. Check out the best cash ISA rates with Which? or other online comparisons.

A ‘stocks and shares’ ISA offers a shelter from capital gains tax and from further income tax on dividend income. There are thousands of options for investment so it pays to take advice as to which funds may be most suitable for you. You may also have ISA investments from earlier years that would benefit from a review.

Pensions: It is no longer possible to contract out of State Second Pension via a money purchase pension scheme. Contracting out remains possible with Defined Benefit (eg ‘Final salary’) schemes. Pension provision and retirement planning should be reviewed regularly to avoid financial shocks close to retirement!

Tax rates: The personal income tax allowance is raised to £8105 subject to the income limit of £100,000. The higher rate tax threshold is reduced bringing more taxpayers into the 40% band. For further details see the HMRC website. The capital gains tax annual exempt amount is held at £10,600.

Child Benefit and Tax Credit : for details of the changes see the explanation by Which?

Charity Art Exhibition

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The Dartington Group of artists are holding the Spring exhibition of their work at the offices of SWLaw from 30th March 2012 and continuing through the summer period. This follows the successful 4 Seasons exhibition which closed this month.

The exhibition will show case the work of a talented group of artists and will include a wide range of subject matter – landscape, figurative, abstract – using a variety of media. Featured artists are Rosemary Bonney, Diana Booth, Jennie Kay, Ann Chester King, Christine McGuire, Denise Orchard, Pam Parrotte, Sarah Post, Penny Sheridan and Janet Taylor.

The exhibition will be supporting the Camphill Devon Community charity which will benefit from a proportion of the proceeds from all sales made during the course of the exhibition. The art work will be on display in our reception area and meeting rooms.

The Group will be launching their new exhibition at a preview evening on Thursday 29th March between 6pm and 8pm.

Please support the Dartington Group and the Camphill Devon Community. We look forward to seeing you!

Budget 2012

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HM TREASURY :

The Government is committed to creating a sustainable tax system that is fair and supports growth.

It will bring forward plans to reward work and support families; reduce headline tax rates to increase the competitiveness of the UK tax system; restrict tax reliefs and close loopholes to make the headline tax system fairer; and introduce measures to create a simpler and more sustainable tax system overall.

Budget 2012 announces wide-reaching reforms to support this goal, including:
* Increasing an individual’s income tax personal allowance by a further £1,100 in April 2013, taking it to £9,205 in total;
* Child Benefit will be withdrawn through an income tax charge from households where someone has an income over £50,000 a year. The withdrawal will be gradual for households where someone has an income between £50,000 and £60,000;
* Reducing the top rate of income tax from 50 per cent to 45 per cent in April 2013;
* Reducing the main rate of corporation tax by an additional one per cent, so that the rate will reduce from 26 per cent to 24 per cent in April 2012, to 23 per cent in April 2013 and will come down to 22 per cent by April 2014.
* Introducing a cap on all unlimited income tax reliefs by setting a cap of £50,000 or 25 per cent of income, whichever is higher
* Introducing a new Stamp Duty rate of 7 per cent for residential properties over £2 million, from 22 March 2012;
* Accepting the recommendation by the independent Aaronson Report that a General Anti-Abuse Rule (GAAR), targeted at tackling artificial and abusive tax avoidance schemes, would improve the UK’s ability to tackle tax avoidance while maintaining UK’s attractiveness as a location for business investment
* Moving towards a simpler, single personal allowance regardless of age by freezing existing Age Related Allowances (ARAs) from 6 April 2013 at 2012-13 levels until they align with personal allowance. From April 2013, ARAs will no longer be available, except to those born on or before 5 April 1948. The higher ARA will only be available to those born before 6 April 1938.

Paying for financial advice

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The Retail Distribution Review (‘RDR’) is going to have a big impact on the market for financial advice. At SWLaw we welcome it and the opportunities that come with it. It is something of a ‘coming of age’ for financial planners and another step on the way to recognition as highly trained, professional advisers. RDR demands higher qualifications of advisers: for some this means updating and upgrading their qualifications if they are to remain in business. RDR introduces a new definition of ‘independent’: advisers, like SWLaw, who choose to remain independent will advise according to a new and wider definition of ‘whole of market’. RDR also means a final break with commissions: no longer can advisers be paid according to the financial products they sell. Instead they will be charging fees directly to their clients.

This last change is perhaps the most significant for financial planners. It removes any question of commission bias – the suspicion that some advisers may be more influenced by the financial rewards they might earn than in what is truly in the interests of their clients. It gets away from the idea that advice can be ‘free’ – in practice the true cost of advice has often been hidden in the complex charging structures of financial products. This method of remuneration has tended to create a great deal of ‘cross-subsidy’ between clients.

The challenge is that the costs of giving financial advice are high because of the complexity of the subject and the onerous regulatory framework. Against that background we have to look for ways of delivering advice at a cost that offers value to the client whilst covering our costs and giving us some profit! Clients will be charged fees which will reflect the work and expertise involved and the value to the client. Some will be transactional fees. Others will be retainers in the context of an ongoing advisory relationship. Charging directly for the work we undertake will enable us to offer a high level of continuing service to clients. In some cases, it has to be accepted that advice may be unaffordable or the cost disproportionate to the value to the client. In those cases, we will be developing ways for clients to give information to enable clients to ‘self-help’.

Rather than face up to these challenges, some organisations are pulling out of the advisory market. Barclays announced in February 20111 that it was shutting down is financial planning arm. Co-operative Bank had already sold its Independent Financial Adviser business in September 2010.

We previously featured a report by Which? highlighting the poor standards of advice offered by the high street banks and building societies.

At SWLaw, the changes introduced by RDR are seen as an opportunity to grow business and to continue to build longer term financial planning relationships with our clients. No longer will there be the myth that advice can be sought at no cost. No longer will there be any thoughts of commission incentives that might be seen as tainting the appropriateness and independence of the advice. No longer will commission-driven salesmen discredit the advisory industry. We believe that this another important step to a better relationship between adviser and client with a greater degree of openness and trust.

Failing to plan …

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… means planning to fail. A familiar saying?

The key to so success in so many areas of life is careful planning. It’s obvious isn’t it? It gives a clear focus and it reduces the risk of something going wrong. Yet there are so many things that we just leave to chance sometimes until it is too late and disaster strikes. It is easy to focus on the positives, the possibilities, the benefits of success. Yet it is equally important to consider the sort of risks that could derail your venture whether it is a commercial one or a private one.

If you are in business, what steps have you taken to manage the risks of default by one of your customers or of a claim being made against you? Similarly, what steps have you put in place to reduce the risk of having to defend a claim by a disaffected employee? Or the risks of some event bringing production to a halt ? Or the loss of a key individual ? The solutions are often relatively simple: lay off some risks to insurers; manage others within the context of the business: eg by establishing procedures, documenting them and reviewing them from time to time. Advice in the early stages can often save substantial expenses later: expenses that were not budgeted for and could be very damaging – including the costs of court proceedings.

Perhaps you should audit your HR procedures? your terms of business? your intellectual property?

It is also important for owner managers to have an eye to the ‘exit strategy’. How are you going to realise the value in your business? What is the succession (or disposal) strategy? How is tax to be mitigated? Are the plans in place? It would be trusting to luck to leave this until the last few years before retirement or until health fails you.

For families too, it is important to plan ahead and to manage risks. How would an accident or illness affect your financial security and future plans? What steps are you taking to fund future spending plans: house purchase; education expenses; holidays; retirement etc? Do you have a long term financial strategy? Would it make sense to develop one?

At SWLaw, we can help you to plan and to manage the risks that threaten the realisation of your dreams. Why not give us a call?

Ownership of sewers & drains …

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Property owner responsibilities and ownership of sewers and drains

From the 1 October 2011 the majority of private sewer and lateral drain ownership was transferred to water and sewage companies. This change will benefit most home owners as the responsibility for looking after drains is now much clearer and the transfer should reduce high maintenance and repair costs which were previously thought to be unfair. Private sewers are pipes which carry waste from more than one property. Lateral drains are pipes which carry waste from a single property and extend beyond the boundaries of that property.

Not all private sewers will be transferred. The link below to South West Water’s website provides access to 3 short video clips which outline how the changes will affect the responsibility and ownership of sewers and lateral drains of detached, semi detached and terraced properties, as well as flats.

http://www.southwestwater.co.uk/index.cfm?articleid=8372

Transfers will occur in many other circumstances concerning commercial property, pumping stations, sewers which cross a railway or are owned by a railway and drainage which is via a highway drain. In these and other circumstances advice should be obtained. Septic tanks and private sewers which discharge to watercourses are unaffected.
These transfers also impact upon a property owner’s plans to build near or over a sewer which is going to be or has been transferred. Approval of plans for a building near or over a sewer which is to be transferred is now required (since 1 October 2011). Likewise approval of plans for a building near or over a sewer which has been transferred needs to be obtained if Building Regulations approval was granted after 1 October 2011.
For further advice relating to any of the issues raised by this article please contact SWLaw’s Property Department. Other useful information can be found on the Environment Agency and South West Water websites.

Who fired the fatal shot …?

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It doesn’t matter said Lord Phillips giving his judgment in R v Gnango In a tragic incident a care worker was killed in the cross fire between two gunmen ‘B’ and Mr Gnango. The bullet actually came from B’s gun but B was never caught. Mr Gnango was charged with murder and convicted. The conviction was overturned by the Court of Appeal which held that there was no ‘joint enterprise’ to support a conviction. The Crown asked the Supreme Court to address this question :
“If D1 and D2 voluntarily engage in fighting each other, each intending to kill or cause grievous bodily harm to the other and each foreseeing that the other has the reciprocal intention, and
if D1 mistakenly kills V in the course of the fight, in what circumstances, if any, is D2 guilty of the offence of murdering V?”
The conviction was restored by a 6 – 1 majority (Lord Kerr dissenting). The leading judgment was given by Lord Phillips and Lord Judge who did not find it necessary to determine whether Gnango was a principal or secondary offender : the jury had found that both men had agreed to the joint enterprise of having a shoot-out. Lord Wilson agreed.
The full judgment is here R v Gnango [2011] UKSC 59. The Supreme Court also issued a press summary.