FINANCE


Brexit is number one challenge for banking sector


Nine-in-ten banks see preparing for Brexit as the number one challenge for the financial services sector at a time when the sector’s growth in the Midlands is rapidly gathering pace. Results in the latest


CBI/PwC Financial Services (FS) Survey show that ten per cent of firms are more optimistic about the overall business situation, compared to 45% that are less optimistic – a decline in sentiment among FS firms for the fourth consecutive quarter, and the longest period of decline since the global financial crisis in 2008. Asked about the main challenges for financial services (FS) firms in 2017, a range of concerns emerged.


‘Firms across the FS sector see the need to intensify their dialogue with regulators in response to uncertainty around Brexit’


Nine-in-ten banks see


preparing for the impact of Brexit as the number one challenge, but this was not the case in any other sector. Building societies are most concerned about macroeconomic uncertainty, while the level of competition preoccupies the insurance sector. Overall, firms across the FS


sector see the need to intensify their dialogue with regulators in response to uncertainty around Brexit. Carl Sizer, Financial Services


Leader for PwC in the Midlands, said: “Financial services companies face many challenges to their business models from competition, regulation, technology and Brexit and, as a consequence, they are having to take some big decisions about their future strategy. “The first quarter of 2017


and beyond will see many start to fine tune and activate their Brexit contingency plans as the reality of life outside the single market and the EU begins to dawn.”


52 business network April 2017


Get ready for ‘taxing’ new inheritance rules


New rules, which will see millions of family homes become exempt from inheritance tax, are poised to come into effect. However, the warning from Buckles Solicitors is that many people could miss out unless they take steps to review their wills.


Luke Appleby (pictured), Senior Solicitor at Buckles Solicitors LLP in Nottingham, said: “The Chancellor has announced a new allowance specifically for those who own their home and want to leave it to their children or grandchildren. “For these homeowners, a new


residence nil rate band allowance (RNRB) will be introduced. However, as is often the case with such announcements, the devil is in the detail. “The current guidelines provide that if the estate is


left to a Trust, the RNRB may not be available. That does not mean at all, however, that Trusts should be abandoned – and we would suggest the opposite. “Trusts are an extremely useful and flexible way of


being able to protect assets in a variety of different situations, including against future care home fees, in cases where a child or grandchild has a disability, future divorces or remarriages. “In some circumstances, Trusts may already be


structured in such a way that the protection is retained while also ensuring that the RNRB can be claimed. If not, provided that steps are taken within two years of the first person’s death the structure of the Trust can be changed so that all objectives are met – which gives a huge amount of flexibility - and ensures that, as much as possible, you can have your cake and eat it. “It is however crucial that the executors take those


steps, so it is really important that if you do have wills involving Trusts, you consider who you have appointed as executors as they might not realise that such action is necessary and if they do not, then the additional tax allowance will be lost. It is therefore sensible to consider appointing a professional in that role.” At present, Inheritance Tax is payable on death if the


estate of the person who has died is worth more than £325,000 – for a person who has never been married


or in a civil partnership. The rate of Inheritance Tax is 40% on any amount in excess of these amounts. Here’s a glance at how the new rules will work: • When a person leaves a residential property to direct descendants there will be an additional nil-rate band for inheritance tax purposes. However, it only applies to one residential property, which was a residence of the taxpayer, or the proceeds of such property after downsizing


• Direct descendants include natural and adopted children, grandchildren and remoter descendants. It also includes stepchildren - but not children of an unmarried partner - and foster children, and the spouse or civil partner of a living or dead direct descendant, as long as any surviving spouse or civil partner has not remarried. For the purpose of RNRB, adopted children are treated as being the children of both the adoptive and the natural parents. Direct descendants do not include brothers and sisters or nieces and nephews


• The £325,000 nil-rate band will continue to be available on any qualifying assets without restriction as to who inherits.


• A married couple or civil partners who satisfy the criteria on the 'property passing to descendants' rule will have a potential combined allowance of £850,000 rising to £1m by 2020; up from the current level of £650,000, with a resulting saving of inheritance tax of £140,000 at the maximum level


• A single person satisfying those criteria will have a £500,000 allowance by 2020, up from £325,000, giving a potential tax saving of up to £70,000.


• People without children will not be able to use the new allowance at all and those with estates of over £2.2m will also not be able to claim the new allowance. The value of an estate will be calculated so that business assets are included.


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