Guidance for former clients of McClure Solicitors
Written by Amy Douch | Private Client |20th January 2023
McClure Solicitors went into administration in April 2021 and many ex-clients are now concerned about the legal documents they prepared previously through McClures. We have been actively helping a number of ex-clients of McClure Solicitors where, upon the advice of McClures, “Family Protection Trusts” were put in place and these types of legal documents in particular may not have been in the best interests of those clients.
The main reason we hear from clients when we ask why these trusts were put in place is because they were told by McClures that anything in the trust is protected from the impact of care fees. Sadly this cannot be guaranteed as the powers given to the Local Authority are wide ranging when assessing someone’s financial position for funding.
McClure Solicitors’ mistakes
Every client is different, and we have come to realise that McClures when advising clients, took a “one size fits all” approach, which has led to some clients being in a worse position financially now then they would have been if they did nothing at all with McClures Solicitors.
Not only have their clients gone to the expense of paying for the trust in the first place, (normally at a cost of several thousand pounds) but they also now find themselves in a position where they may now need to pay out even more money either in further legal fees or in some cases because of an unknown tax liability arising.
If you are an ex-client of McClure Solicitors, or you are concerned about the involvement of McClure Solicitors in a Trust, Estate or personal affairs of you or your loved ones, Nash & Co Solicitors will be happy to help you understand what has happened, if there is any urgent action required, and the options now available to you.
Since McClures went into administration, we have advised and assisted clients on the following issues:
Changing trustees
We have encountered a lot of matters where Solicitors/Directors of McClures were personally appointed as trustees alongside their client and their family members.
Now that McClures no longer exist, clients may be wondering what they need to do in respect of their trust.
Where the person who created the trust (“the Settlor”) is still alive and they have capacity, they normally have an express power contained in the trust document where they can remove a trustee and appoint new trustees. This needs to be done by way of a Deed of Removal and Appointment, which the Settlor would need to sign as well as the new trustees.
In cases where a property has been placed into the trust, the property would also need to be transferred into the names of the new trustees.
To achieve this, the Land Registry requires a TR1 to be prepared and the new and old trustees would need to sign this document. This is where most people are running into problems as trying to track down the Directors of McClures to sign documentation has proven difficult.
All client matters of McClures were transferred to another firm of solicitors; Jones Whyte LLP who are assisting where they can with arranging signatures of documents. This is not a quick process and, in some cases, taking many months to complete.
If you would like assistance in changing Trustees of a Trust and updating Land Registry property titles, Nash & Co Solicitors are happy to help prepare the necessary legal documents and arrange for the documents to be signed.
5⭐ Google Review from C Slow, one of our clients
Having decided to move home recently we discovered that our trust solicitors McClures of Glasgow had gone into liquidation leaving us without trustees, therefore, unable to sell our property we needed to find a new solicitor to restore our trusts.
Amy at Nash & Co of Plymouth has proved to be an extremely competent and efficient trust solicitor.
Clearly explaining our options at every step and guiding us through processes we could complete ourselves Amy has brought our issue to a very speedy conclusion.
We would recommend anyone with a similar issue to seek Amy’s assistance.
When our property sells we will be asking Nash & Co’s conveyancing team to act for us.
Inheritance Tax reporting
A Family Protection Trust is known as relevant property trust and these types of Trust are subject to Inheritance Tax which is a separate tax from Income Tax.
This means every 10th Anniversary; the trustees need to complete a tax form called an IHT100. This document needs to be filed within 6 months of the 10th anniversary.
There is an exemption that trusts with a value under 80% of the Nil Rate Band, which is currently £325,000, at the anniversary date do not need to complete the IHT100.
Therefore, trusts where the assets do not exceed £260,000 in value, do not need to complete these reporting requirements.
Review of Estate, Tax Position and whether the trust is fit for purpose
It is always a good idea to have a review of your estate and trust to see whether the trust is still beneficial.
A lot of people do not realise that by putting their property into this type of trust, it loses you a very useful inheritance tax relief in the Residence Nil Rate Band.
Because the property is owned by the trust and not you personally, even if you decided to give it to your children, the Residence Nil Rate band allowance will not be able to be claimed in the event of your death.
This relief is currently worth up to £350,000 for a widow/widower and therefore if the total estate is worth over £650,000, careful consideration should be given to see whether the advantages of the keeping the trust, outweigh the possibility of inheritance tax being charged on anything over £650,000 at a rate of 40%.
Trust Registration
HMRC have now made is compulsory for all trusts of this nature to be registered with the Trust Registration Service.
The deadline for registration has passed, however HMRC are aware that the registration requirement is new and unfamiliar and therefore currently there is no penalty for a first offence of failure to register or late registration, unless the failure is shown to be deliberate by the trustees.
Where failures to register are due to deliberate behaviour on the part of the trustees, a £5000 penalty may be charged per offence.
Registering the trust is something the trustees can look at doing themselves to avoid any further costs being incurred in this regard. If however you are looking at making changes to your trustees, we would advise that the trustees that this is done before registration takes place.
Speak with our Private Client team
Here at Nash & Co Solicitors, our Wills, Trusts, Tax and Probate team are friendly and experienced lawyers who want to help you make sure that you have all the correct documents in place, and that your documents achieve your wishes.
Whether it is Lasting Powers of Attorney, Wills, Trusts or Tax Planning, please contact us for a chat and to make an appointment. You can get hold of the team by calling 01752 827067 or by emailing teamprivateclient@nash.co.uk
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