Nunn Hayward - July 2007

Abacus July 2007

Enduring Powers of Attorney - the final countdown

Since the mid-1980s, an individual has been able to sign an Enduring Power of Attorney (“EPA”) appointing a person or persons to be entrusted with managing the individual's finances, if s/he became unable to do so personally at any time in the future. An EPA can be put in place years before any incapacity arises and can be used where the future incapacity is physical (eg declining sight), rather than a mental inability to make decisions. Only when (if) subsequent mental incapacity arises, does the EPA have to be registered with the Court of Protection.

In October, the Mental Capacity Act 2005 will replace EPAs with Lasting Powers of Attorney (LPAs), the requirements for creating which are complex - several pages of detailed information have to be explained to each attorney, as well as to the person granting the power; the form is substantially longer than an EPA (25 pages compared to 3 or 4), requiring much more information about the person granting the power and all the attorneys, and an independent third party has to give a certificate that the person granting the power fully understood the document.

Most onerously, the LPA will have to be registered with the Court of Protection before it can be used and, to ensure that the LPA is immediately available for use in case of need, it would be necessary to proceed with registration as soon as the document was completed. Registration involves considerable further expense - people who grant LPAs for both financial matters and health and welfare decisions would have duplicated expense and registration requirements - yet the power(s) may never need to be exercised. Registration can be dealt with at a later date but it is unlikely that a decision re medical treatment could be postponed for the time it would take to deal with the registration of the Welfare LPA.

The complex requirements and the expense (currently estimated to be between three and four times the cost of preparing an EPA, disregarding the charge for registration) are likely to deter many people from entering into a LPA. As a result, the onset of ill health might mean that more families are left without the necessary authority to act and more individuals will have their financial affairs managed by the Court of Protection, at substantial cost.

However, EPAs executed prior to October 2007 will continue to be valid, even if the authority does not have to be used for many years. The best advice that can be given to all adults is that they should create an EPA, as an insurance policy against future need arising.

A person who has granted an EPA in respect of financial affairs, can still enter into an LPA authorising attorneys to make future welfare or health care decisions.

[Nunn Hayward are grateful to Gillian Murray, Head of Estate Planning & Management at IBB Solicitors for providing the above information.]

Should you have any queries regarding this article please contact David Duke, Partner at david@nunn-hayward.com or call 01753 888211.

The Child Trust Fund

New Parents, Have You Claimed Your Ł250 From The Tax Man?

New parents, did you know that for every child born after 1 September 2002 the Government are giving Ł250 for you to open a savings account for him/her to mature at the age of 18. And what’s more 500,000 of you haven’t bothered to open the account.

When your child was born and you started to receive Child Benefit you should have been sent a Child Trust Fund voucher, to enable you to open an account.

There are three main types of account:

1. A stakeholder account
2. A shares account
3. A savings account

You can find a list of providers of these accounts (there are some 70 to choose from) on the Government website. www.childtrustfund.gov.uk

Some of the vouchers have already expired, and if this is what has happened in your child’s case HM Revenue and Customs will open an account on your behalf and advise you accordingly.

In addition to the initial voucher there will be another payment of Ł250 when your child reaches the age of 7. Also a further Ł1200 can be invested in the account per year for the child by family and friends.

If you have lost the voucher but it has not yet expired you can obtain another by calling the Helpline on 0845 302 1470.

If you would like any further information please contact Suzanne Precious at Suzanne@nunn-hayward.com or call 01753 888211.

Important Tax Dates

July
19/20	-	Quarter one 2007/08 PAYE remittance due.
	-	Final date for payment of 2006/07 Class 1A NICs.

31	-	Second self assessment payment on account for 2006/07
	-	Annual adjustment for VAT partial exemption calculations (April VAT year end).
	-	Liability to 2 Ł100 penalty arises for 2006 Tax Return still not filed.
		5% surcharge on any tax unpaid for 2005/06

Please contact us to discuss the above further

Tel: 01753 888211 Fax: 01753 889669 Email: abacus@nunn-hayward.com
Nunn Hayward, Sterling House, 20 Station Road, Gerrards Cross, Bucks SL9 8EL.

Chartered Accountants, Registered Auditors and Insolvency Practitioners. This publication has been prepared as a guide only to topics of current financial and business interest. It is not intended to be a substitute for professional advice. No responsibility for loss occasioned to any person acting or refraining from acting as a result of any material in this publication can be accepted by either the authors or Nunn Hayward. All rights reserved.

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