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Many homeowners in Wales ‘failing to protect their family’s financial futures’

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ALMOST a third of homeowners in Wales are failing to protect their family’s financial futures

25.01.2024 – Almost a third (32%) of adults in Wales have not made financial arrangements to protect their families when they die, new research has revealed.

A survey, by Lycetts Financial Services (LFS), also revealed that 32% do not understand how Inheritance Tax could affect their loved ones.

“Most people focus on earning enough to buy a home and accumulate other assets during their lifetime,” said Nick Straker, LFS Divisional Director. “They regard this as more important than considering the potential tax consequences further down the line.

“However, the start of a new year is the ideal time to take stock of your financial assets and circumstances, and plan for the future. It could be the most important resolution you ever make.”

Currently, the first £325,000 of an estate is not subject to Inheritance Tax under the “Nil Rate Band” (NRB). Where the family home is also passed to a direct descendant then the NRB is boosted by a further £175,000 to £500,000.

If a couple are married and pass assets each to other, then the NRB can be inherited so that it can be up to £1million on the last to die. However, the rise in property values in recent years has still seen more people’s assets exceed the threshold and be subject to a 40% tax rate.

Straker said: “A Potentially Exempt Transfer (PET) allows you to make financial gifts of unlimited value without there being an Inheritance Tax liability. The only proviso is that the individual making the gift must survive for the following seven years, and that the gift itself is potentially subject to Capital Gains Tax (CGT) on transfer.

“Before committing to PETs, consideration should be given to what your future financial needs may be. With life expectancy increasing, you need to consider how much income you will require to continue living the life you want to lead.

“The problem of giving assets away is that you don’t know how long you are going to live and there may also come a time when you need to pay for care and nursing home costs.

“The wisdom of making a PET when your children may be young, impulsive and have not yet established themselves, is another important consideration. Generally, people are getting married later and having children later, so planning becomes more difficult.

“Life Insurance, however, is a good short term measure. It provides protection for loved ones if something were to happen unexpectedly, and is relatively inexpensive. When your children are likely to be settled and more mature, and you have a better idea of your financial needs going forward, a PET might then be explored or other IHT plans can be considered.”

Straker also reinforced the importance of building up a pension fund, which can offer further financial support for a spouse and family.

“Pensions are highly tax efficient and are not affected by Inheritance Tax. You are never too young to start saving for your pension and should aim to build as big a fund as possible.

“My final piece of advice is to seek guidance from an experienced financial adviser. An audit of all assets is a good starting point to plan for the future.

“A YouGov survey revealed that that only 31 per cent of those who made resolutions in 2023 kept them all, but arranging your finances is one you should definitely stick to.”

 

Business

Builder wins court case against his solicitor — but still hasn’t seen a penny years later

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Retired builder won over £130k from Milford Haven form Price and Kelway in 2022 for negligence, but is still waiting to be paid due to ongoing divorce

A NOW-RETIRED Pembrokeshire builder who won a six-figure professional negligence case against his former solicitors says he has still not received any of the money — almost four years after the court ruled decisively in his favour.

David Norman Barrett secured judgment in 2022 after a judge found that failures by the law firm Price & Kelway had caused him to lose the opportunity to pursue a potentially valuable claim against HSBC and HSBC Life.

The court ordered that damages, interest and costs totalling £130,820 be paid. Permission to appeal was refused.

Yet Mr Barrett says the legal victory has brought him no closure — because he has yet to see a single pound.

The court ruled that Price and Kelway Solicitor’s inaction caused a loss of chance for a builder to settle a legal dispute with his bank, HSBC.

A clear win on paper

The negligence case arose from a failed property development at Ludchurch, near Narberth, where Mr Barrett borrowed money from HSBC in 2007 to purchase land and build two houses.

He later alleged that the bank departed from an agreed funding model, draining development funds prematurely and leaving the project financially unviable. He also claimed that associated life insurance policies were mis-sold.

After years of dispute with the bank — including an unresolved complaint to the Financial Ombudsman Service — Mr Barrett instructed Price & Kelway.

He did this after hearing a radio advert for the solicitor’s firm on Radio Pembrokeshire. On November 7, 2012 Mr Barrett had a meeting with Mr Gareth Lewis, a partner in the firm.

“After that date and paying the a large amount in legal fees, progress was slow”, Mr Barrett said.

He added: “I gave Mr Lewis lots of paperwork, but work was not done in a timely fashion”

Proceedings against HSBC were eventually issued too late and struck out as time-barred, court documents show.

In 2022, the court found that the solicitors had failed to properly advise on limitation deadlines and that this negligence caused Mr Barrett a “loss of chance” to pursue or settle his claims.

Damages were assessed at £42,000, with statutory interest and costs bringing the total award to £130,820.

Money paid — but not released

Documents seen by The Herald show that following the conclusion of the case, a portion of the judgment money — £34,405.49 after fees and disbursements — was paid into the client account of Mr Barrett’s own solicitors, Red Kite Law LLP.

However, correspondence confirms that the funds have not been released due to an ongoing divorce between Mr Barrett and his wife, Dianne Carol Barrett, who was also named as a joint claimant in the negligence proceedings.

Red Kite Law has stated in writing that it cannot distribute the money without agreement from both parties, or a court order determining entitlement. The firm has also made clear that it cannot hold client money indefinitely and may ultimately be required to pay the funds back into court if the dispute remains unresolved.

‘This was business money’

Mr Barrett strongly disputes that the judgment award forms part of the matrimonial assets.

He told The Herald that the negligence case related entirely to his work as a self-employed builder and property developer, and that the damages awarded were compensation for business losses.

“This money didn’t arise from our marriage,” he said.

“It arose from my business. I was a sole trader. The claim was about my development project and professional advice I received as a builder.

“It wasn’t family savings or joint income. It was compensation for business losses.”

Mr Barrett says the stress and financial pressure of the prolonged litigation played a significant role in the breakdown of his marriage.

Years of financial strain

Earlier cost breakdowns from the case show that Mr Barrett personally paid more than £16,000 over several years to fund the negligence action, alongside significant unpaid disbursements incurred as the case progressed.

He says the litigation drained his finances long before judgment was handed down and left him struggling even after he technically “won”.

Now reliant on his pension and benefits, he says the continued freezing of the remaining funds has left him in financial limbo.

A legal deadlock

Where competing claims exist over money held in a solicitor’s client account, firms can find themselves acting as stakeholders.

Under professional rules, solicitors may retain funds until entitlement is resolved by agreement or court order, to avoid the risk of releasing money to the wrong party.

Red Kite Law has stated that it cannot advise either Mr Barrett or his wife on the dispute due to a conflict of interest, and has suggested options including a restricted joint account or transfer to a neutral third party — proposals which, to date, have not resolved the deadlock.

Personal cost

Beyond the legal arguments, Mr Barrett says the personal toll has been severe.

“The case broke us,” he said.

“And even after winning, I’m still fighting — this time just to get what the court already awarded.”

No allegation of wrongdoing

The Herald stresses that no finding of wrongdoing has been made against Red Kite Law LLP.

The firm has not been accused of acting unlawfully, and the dispute centres on how the judgment award should be classified and distributed in light of ongoing matrimonial proceedings.

The case raises wider questions about whether winning in court always delivers justice — and how long successful litigants can be left waiting for payment when personal and legal systems collide.

The Herald contacted Price and Kelway for comment at their main email address, but at the time of publication had received no response.

 

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Business

S4C seeks two new non-executive directors to join its Board

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S4C is recruiting two new non-executive directors to join its Board as the Welsh-language broadcaster continues its shift towards a digital-first future.

The appointments process is being led by the Department for Culture, Media and Sport, with final decisions made by the UK Government’s Secretary of State for Culture, Media and Sport.

The channel is seeking candidates with a broad range of skills and experience, with particular interest in those with backgrounds in digital media, content production or law.

S4C said it is looking above all for people with a strong commitment to public service broadcasting and a desire to help shape the organisation’s next phase of development.

In recent months, the broadcaster launched its new strategy, More Than a TV Channel, aimed at expanding its reach beyond traditional television. Initiatives include producing its first Welsh-language vertical drama for TikTok and forming a partnership with BBC iPlayer to widen access to its programmes.

Board chair Delyth Evans said the appointments come at a pivotal time.

She said: “It’s a particularly exciting time for S4C as we deliver the ambitions set out in our strategy, More Than a TV Channel.

“S4C is already much more than a television channel, with content available across a range of platforms, and through the significant economic and cultural contribution the service makes to Wales and the Welsh language.

“As we continue on this journey, we welcome applications from people who want to play a vital role in shaping the future of S4C.”

The closing date for applications is Friday (Feb 27).

Further details and the full job description are available via S4C.

For enquiries, contact Tomos Evans at [email protected]
.

 

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Business

Tax deadline for self-employed and landlords as digital system goes live in April

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Quarterly online reporting to become mandatory for higher earners under HMRC shake-up

MORE than 860,000 sole traders and landlords across the UK are being urged to prepare now for major changes to the way they report tax, with new digital rules coming into force in just two months.

From April 6, thousands of self-employed workers and property landlords earning over £50,000 a year will be required to keep digital records and submit quarterly income updates to HM Revenue & Customs under the Government’s Making Tax Digital scheme.

The changes form part of a wider overhaul designed to modernise the tax system and reduce errors.

Instead of submitting figures once a year, those affected will use approved software to record income and expenses throughout the year and send short quarterly summaries to HMRC. Officials stress these are not extra tax returns, but updates intended to spread the workload and avoid the usual January rush.

Free and paid software options are available, with the system automatically generating the figures needed for submission.

At the end of the tax year, users will still file a Self Assessment return, but most of the information will already be stored digitally.

Craig Ogilvie, HMRC’s Director of Making Tax Digital, said the move should make tax reporting simpler.

He said: “With two months to go until MTD for Income Tax launches, now is the time to act. The system is straightforward and helps reduce errors. Thousands have already tested it successfully.

“Spreading your tax admin throughout the year means avoiding that last-minute scramble to complete a tax return every January.”

More than 12,000 quarterly updates have already been submitted during a voluntary trial.

Phased rollout

The new rules will be introduced gradually:

• From April 2026 – those earning £50,000 or more
• From April 2027 – those earning £30,000 or more
• From April 2028 – those earning £20,000 or more

To ease the transition, HMRC says it will not issue penalty points for late quarterly submissions during the first 12 months.

After that, a points system will apply, with a £200 fine only triggered once four late submissions are reached.

Anyone unable to use digital tools for genuine reasons can apply for an exemption.

Tax agents and accountants are advising clients to prepare early to avoid last-minute problems.

Further guidance, webinars and sign-up details are available via GOV.UK.

 

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