Kerseys Solicitors December 2024 Newsletter
Kerseys Solicitors December 2024 Newsletter
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Legal Updates
Key Dates
Renters Rights Bill – Summer 2025 (estimated):
The Renters Rights Bill to come into force. This will abolish Section 21 (“no reason”) evictions for Assured Shorthold Tenancies and other changes. Landlords will need to prove the reason for the eviction to the court. Likely to have immediate effect with no phasing in for existing tenancies.
The Employment Rights Bill
The Employment Rights Bill (ERB) was introduced into Parliament on 10 October 2024. The ERB sets out various employment law reforms, including but not limited to reforms regarding making unfair dismissal a day one right, Statutory Sick Pay, day-one rights to family leave, enhanced right to request flexible working hours, sexual harassment and ‘fire and rehire’.
An amendment paper running to 53 pages on the ERB has recently been published by the House of Commons, including a new clause extending the limitation period for bringing a tribunal claim from three months to six.
The government expects to begin consulting on the reforms in 2025 and anticipate that the majority of reforms will take effect no earlier than 2026. The ERB represents a ‘seismic shift’ to the current landscape and its development is certainly one to watch in 2025.
Tax and National Insurance Changes
The rate of employer’s National Insurance Contributions (NICs) will rise by 1.2%, bringing it to 15%.
The Employer’s NI Secondary Threshold will decrease from £9,100 to £5,000. This change, together with the rate increase, means a higher NI burden for many businesses.
The Employment Allowance will increase from £5,000 to £10,500, and the current £100,000 threshold for eligibility will be removed. All other eligibility requirements remain unchanged.
Changes to National Minimum Wage, including the National Living Wage
The rates to National Minimum Wage and National Living Wage which will apply from 1 April 2025 are as follows:
| NMW Rate | NMW Rate (£) | Increase (£) |
|---|---|---|
| National Living Wage (21 and over) | £12.21 | £0.77 |
| 18-20 Year Old Rate | £10.00 | £1.40 |
| 16-17 Year Old Rate | £7.55 | £1.15 |
| Apprentice Rate | £7.55 | £1.15 |
| Accommodation Offset | £10.66 | £0.67 |
Legal Updates
How is Stamp Duty changing?
The nil rate threshold which is currently £250,000 will return to the previous level of £125,000 on 1 April 2025.
- The nil rate threshold for first-time buyers which is currently £425,000 will return to the previous level of £300,000.
- The maximum purchase price for which First-Time Buyers Relief (a reduced stamp duty rate) can be claimed is currently £625,000 and will return to the previous level of £500,000.
From 1st April 2025, the stamp duty rates in England will be:
| Proportion of property value | Rate for main residence |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| Over £1.5 million | 12% |
Additional Properties in England – from 1st April 2025, the stamp duty rates will be:
| Proportion of property value | Rate for main residence |
|---|---|
| Up to £125,000 | 5% |
| £125,001 to £250,000 | 7% |
| £250,001 to £925,000 | 10% |
| £925,001 to £1.5 million | 15% |
| Over £1.5 million | 17% |
Legal Updates
The impact of the 2024 Budget on your estate planningThe latest UK budget introduced several measures that may significantly impact your estate planning, with implications for Inheritance Tax (IHT), Capital Gains Tax (CGT) and pension transfers. These changes may affect the way you manage your estate, make tax-efficient transfers to beneficiaries, or utilise reliefs and exemptions effectively.
‘Given these substantial changes, it is crucial you seek professional advice to navigate the new landscape and ensure your estate planning strategies remain effective and compliant,’Leila Murray, head of the Wills and Probate team at Kersey Solicitors. ‘Each person’s circumstances will be unique, so it may also be necessary to involve your independent financial advisor and your accountant.’
Leila explores some of the key budget changes which may affect your estate planning and IHT position.
IHT bands remain frozen
The budget preserved the current nil-rate band (£325,000) and the residence nil-rate band (£175,000) and these will continue to be fixed at these levels until at least 2028. This freeze ignores inflation, so effectively means that more estates will be above the taxable threshold, potentially increasing tax liabilities for your beneficiaries.
Transferable pension assets to become taxable
Until now, wealth passed on from a pension fund has generally been excluded from an individual’s estate for IHT purposes, allowing these funds to pass to beneficiaries tax-free.
However, from April 2027, any money inherited from a pension will become subject to IHT, bringing it within the same tax framework as cash or other investment assets. This change represents a substantial shift in IHT planning and will likely bring many more estates above the taxable threshold.
Reductions in Agricultural Property Relief and Business Property Relief
Starting in April 2026, the 100% relief for Agricultural Property Relief (APR) and Business Property Relief (BPR) will be capped at £1 million. For asset values above this threshold, the relief will drop to 50%, resulting in an effective marginal IHT rate of 20% on farms or businesses exceeding £1 million in value – unless the standard nil-rate band or residence nil-rate band is available to reduce the taxable estate.
The Government has confirmed that, as of April 2025, APR will extend to land involved in an Environment Land Management scheme, a policy introduced in the previous Spring Budget.
Alternative Investment Market (AIM) Investments
Investments in AIM shares are also seeing limitations. Currently, AIM-listed shares can qualify for 100% BPR after a two-year holding period, often serving as a useful short-term IHT planning tool for clients wary of the seven-year survival period required for lifetime gifts.
However, from April 2026, the relief rate will be reduced to 50% for AIM-listed shares and other quoted shares classified as ‘not listed’ on recognised stock exchanges.
This means a 20% IHT rate will apply to such investments if the nil-rate band has been used elsewhere, potentially diminishing AIM shares’ appeal as a planning strategy due to their higher risk profile.
Capital Gains Tax on shares and other assets increased
CGT changes had been much anticipated ahead of the Budget announcement. The Chancellor confirmed that the CGT rate for basic-rate taxpayers will rise from 10% to 18%, while higher-rate taxpayers will see their rate increase from 20% to 24%. These new rates took effect immediately and now match the CGT rates applied to the sales of residential property.
The annual CGT allowance remains fixed at £3,000 per person, providing limited offset for the heightened rates.
Non-domiciled tax regime
The Chancellor confirmed the abolition of the non-domiciled (the so-called ‘non-dom’) tax regime. This long-standing arrangement, which allowed individuals to limit their UK tax liability on overseas income and gains, will no longer be available, significantly impacting wealthy residents with international ties.
Looking ahead
A key question raised by the Office of Budget Responsibility is whether these new restrictions will lead to passing wealth down to younger generations sooner. However, this approach can carry its own risks, such as the need for you to survive seven years post-gift, potential complications from divorce, and possible CGT implications in certain circumstances.
While trusts remain a potentially viable route, they can add complexity. Insurance solutions, though helpful in some cases, can be costly.
How we can help
Navigating these changes requires careful consideration and expert advice. Our private client team has extensive experience in estate planning, inheritance tax strategy, and protecting wealth. We are here to help you understand the impacts of the recent budget on your estate, explore options for IHT relief, and provide tailored guidance on managing CGT.
For further information, please contact please contact a member of our Private Client team at Kerseys Solicitors in Ipswich on 01473 213311, Kerseys Solicitors in Colchester on 01206 584584 or Kerseys Solicitors in Felixstowe on 01394 834557 or email us at [email protected]. Alternatively visit our website and click “Call Me Back” and a member of our Private Client team will be happy to contact you at a time that is more convenient to you.
The Government confirmed their plans to give greater rights and protections to leaseholders when the bill was introduced in the Kings Speech to Parliament at the end of November. The intention is to make it easier and cheaper for leaseholders to buy the freehold, and also to be able to extend their lease. Currently leaseholders have the right to extend a lease to 90 years, whereas the government plans to increase this to 990 years. Other planned measures are to remove the requirement to pay the freeholders costs when making an application to extend the lease and removing the concept of “marriage value” which makes it more expensive to extend the lease when the lease has less than 80 years.
The Bill also plans to give leaseholders greater rights to challenge poor practice by managing agents or freeholders, and also setting time and costs limits on the amount that managing agents and freeholders can charge when preparing the information pack needed on leasehold sales.
The Bill however needs to be passed through Parliament so we do not know when these changes will become law or if the Bill will be amended.
It can be difficult to sell a property with less than 80 years left on the lease and you would usually have to agree an extension of the lease with your freeholders just to be able to sell.
It will almost certainly be cheaper to wait for the Leasehold Reform Bill to come into force so this is a change that cannot happen soon enough for many leaseholders.
Legal Updates
Financial issues and child arrangements on divorce
Many people are under the false impression that once they submit a petition to the court to end their marriage or civil partnership, the court will automatically deal with all other ancillary issues surrounding the breakdown of the relationship like how they sort out their financial assets or how they arrange contact with the children. It is important to know that when the court is given a divorce/dissolution petition, this is the only thing the court will deal with.
If the parties need help with finances or children, separate court applications are required for these. However, the parties should be actively encouraged to try and resolve these issues outside of the court arena and only involve the family court judges if they cannot reach mutually acceptable terms of settlement through non-court dispute resolution methods.
For both areas of discussion, ideally the parties will be able to discuss finances or child contract arrangements directly with each other and negotiate a settlement between themselves. However, if support is needed with working towards a financial agreement or contract arrangements, the options include:
- solicitor-led negotiation
- mediation
- collaborative family law
- family arbitration.
Each of these options should allow both parties to retain an element of control over the outcome and prevent matters ending up in contested proceedings in court. If mutually acceptable terms of settlement are reached between the parties, a solicitor can be instructed to produce the necessary formal legal documentation to record the terms. In the case of finances, a Consent Order will be produced setting out how the parties plan to divide their marital assets and when the clean break provisions should come info effect to prevent any future claims during life and death. In the case of child arrangements, a Parenting Plan can be drawn up detailing what arrangements have been agreed and how any variations to the arrangements should be made to avoid having to involve solicitors again in the future.
However, for some, negotiation is not possible and mutual agreements simply cannot be reached. In cases like this, an application will need to be made to the Court. This will either be for Financial Remedy or for a Child Arrangements Order. In both cases, the family court will consider all the facts of the case and make a decision on behalf of the parties involved. Once a decision has been reached, either the financial order or the child arrangements order will be legally binding and remain valid unless either party applies to the court in the future for an amendment.
Whether discussions relate to finances or children, It is vital that each party gets expert legal advice from a family lawyer who can act as a guide through the process and establish the best course of action to take. By speaking with our experienced family solicitors as early as possible, you can ensure that your interests are safeguarded from the outset.
Contact our family law team today to find out more and to book in initial fixed fee consultation at Kerseys Solicitors in Ipswich at [email protected] or telephone 01473 213311 or Kerseys Solicitors in Felixstowe at [email protected] on 01394 834557 or Kerseys Solicitors in Colchester at [email protected] on 01206 584584.
Delighted to announce our new Woodbridge office
Kerseys Solicitors are delighted to announce the opening of our new branch office in Woodbridge, officially launching on 2nd January 2025. This expansion follows the successful opening of our Felixstowe branch in January 2024.
The new Woodbridge office will offer a comprehensive range of legal services, including conveyancing, probate and wills, and Lasting Powers of Attorney (LPA). Whether you are looking for assistance with personal matters or for your business, our experienced team are here to assist.
Managing Partner, Kimat Singh at Kerseys Solicitors says “This new office reflects our commitment to delivering expert legal support tailored to the needs of local communities.”
Located at Unit 17a Deben Mills Business Centre, Old Maltings Approach, Melton, Woodbridge, Suffolk, IP12 1BL the Woodbridge branch will be open from 9:00 AM to 5:00PM, Monday to Friday. To schedule an appointment, please call 01394 813732, [email protected] or visit www.kerseys.co.uk.
We look forward to welcoming our existing and new clients to our new office in Woodbridge.
Happy New Year Happy New Office!
Reminder to protect your computers
Microsoft will end Windows 10 support for security updates on 14 October 2025. Your device may be able to be updated to Windows 11 but if not please seriously consider adding a new computer to your Christmas list. Running on Windows 10 after that date is a dangerous option and puts yourself at risk.
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