Changes to Private Client Law in 2023

As we approach the end of the year, we wanted to put together a summary of a few of the changes we’ve seen across private client law in 2023. 

Some of these you might be aware of already, some you may not. If you think any of these changes might affect you or your plans for the future, please don’t hesitate to get in touch if we can offer any advice on how to navigate them. 

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Tax changes

There have been a number of changes in tax rates and thresholds this year. All these changes were effective from the 6th April 2023, unless otherwise stated. 

  • The annual exemption for capital gains tax (CGT) was reduced from £12,300 to £6,000 for individuals, and from £6,150 to £3,000 for trustees. 
  • Though the personal allowance threshold for income tax has remained frozen at £12,570, there have been two other changes in income tax. Firstly, the additional rate threshold (taxed at 45%) has reduced from £150,000 to £125,140. Secondly, the dividend allowance has reduced from £2,000 to £1,000.
  • The main rate for corporation tax increased from 19% to 25% on the 1st April 2023. However, companies with profits up to £50,000 will still be subject to the 19% small profits rate. 

The Royal Assents of Finance (No.2) Bill came into law on the 11th July 2023. As part of this new bill:

  • The pensions lifetime allowance charge was abolished.
  • The pensions annual allowance increased from £40,000 in 2022/23 to £60,000 in 2023/24.
  • The existing interim concession that removed trustees and personal representatives from income tax when their only source of income is savings interest and the tax liability in question is less than £100 was formalised. 
  • The definition of ‘charity’ was restricted to UK charities and the definition of ‘community amateur sports club’ was restricted to UK clubs. 
  • The rules around transferring assets for separating couples have been changed. Partners who are divorcing, separating or dissolving a civil partnership now have a much longer ‘no gain, no loss’ window for capital gains tax.  

Estate administration changes

This year, the Law Society published a new online guide on best practices in estate administration. This included guidance on:

  • Probate fees.
  • Online applications.
  • Current waiting times.
  • Avoiding delays with applications.
  • HMCTS staffing levels and how recent recruitment should improve waiting times. 

Contentious trust changes

This year, there was a significant judgement in the Court of Appeals that is likely to impact on future litigation regarding contentious trusts.

In Gorbachev v Goriev [2023], the Court of Appeal rules that trustees of two Cyprus trusts did not have to pay the legal costs of the litigant, despite the fact that they had lost their challenge to the order on the grounds of jurisdiction. This has changed the law as trustees involved in similar cases will not now need to pay the claimant’s costs even if they lost their challenge to a disclosure order. 

Contentious estate changes 

The Law Society published new guidance on disputed wills that advises law firms to consider very carefully whether or not they should act in a case regarding a disputed Will if they are the firm who originally drafted the Will. This is because it may contradict the principles of the Solicitors Regulation Authority (SRA).

What might these changes mean for you?

Some of these changes may have implications for any future planning you might have done, or for an estate you are currently involved in administering. 

Once again, if you’re unsure about any of these changes and need some bespoke advice from a team of professionals you can trust, please do get in touch. 

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