Your legal questions answered by Fahmida Ismail, Partner at Sydney Mitchell LLP. As featured in Worcester News on 3rd February 2015.

 

Q. I am a self-employed electrician. Four years ago I lost a large contract, and since then have been working more or less part-time, on a much lower income. This year HMRC decided that I must be doing work for cash, so they require me to pay tax on an imaginary extra £5,000 turnover. Are they judge and jury in these matters?

A. No. You should have been notified of your right to appeal against the inspector’s decision. This must usually be submitted within 30 days of the assessment, and you can ask for the excess demand to be postponed until the appeal has been dealt with. You can ask for a review of the decision, but if you can’t reach an agreement with the inspector you are entitled to appeal to the Tax Chamber of the First-tier Tribunal in Birmingham.

 

Q. We have made wills leaving our house to our two children. When they come to sell it, what taxes will they have to pay? Since our total estate will not exceed £250,000, inheritance tax should not come into it.

A. As long as your joint estate doesn’t exceed the inheritance tax threshold (currently £650,000 for married couples and civil partners) your children will not be liable for tax when they inherit or dispose of your property. Capital gains tax is not payable on death. There will probably be probate fees to pay for proving your will but these are quite reasonable and are not taxes as such.

 

Q. I accepted a settlement of £2,800 from the Motor Insurers’ Bureau. When I received the cheque from the solicitors it was £300 short. I rang the solicitor about the shortfall and was advised to bank the cheque, but they said they would contact the MIB about it. I’ve heard nothing further.

A. Where the Motor Insurers’ Bureau pays out for damage to property (as opposed to for injury) there is a £300 “excess” charge. In other words you fund the first £300 of any claim. You should have been told about this. I take it you were able to identify the other vehicle (otherwise the MIB would not have accepted your claim for property damage). It’s possible the solicitors are pursuing the driver for compensation for you, but this is often a lost cause.

 

For further information on any of the issues raised, please contact Fahmida Ismail on 0121 698 2200 or fill in our online enquiry form.

Lexcel Practice Management Standard Birmingham Law Firm of the Year for 2011 Resolution Collaborative Family Lawyer The Law Society Accredited in Family Law UK Legal 500 2016 Conveyancing Quality Scheme