Employment Tribunal Time Limits Are Strict

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Rarely will an Employment Tribunal permit a claim advanced by a Claimant to proceed if it is out of time. Most, but not all, employment claims have a three month time limit.

A recent case taken to the Employment Appeal Tribunal this month (Bliss Residential Care Ltd v Fellows [2023] EAT 59) the Respondent employer successfully had overturned the Tribunal’s previous decision to allow a claim out of time. The claim had been issued during the start of the Covid-19 pandemic by a newly qualified solicitor. However, it was submitted using the wrong method and then re-submitted but not in time. The Tribunal had sympathy with the solicitor dealing with cases and the problems caused by the pandemic. However, the Employment Appeal Tribunal stated that it should have been right and that the Tribunal should not have allowed the Claimant to proceed out of time.

If you believe you have employment related claims seek our advice promptly so we can ensure that your claim, should you choose to pursue it, is issued correctly and in time to ensure that you can proceed with it.

World Day for Safety and Health at Work 2023

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Friday 28th April was World Day for Safety and Health at Work, a global day for preventing accidents and injuries and promoting workplace safety.

HSE stats show that 1 million+ workers are injured in the workplace every year. Such accidents brings a lot of disruption to Employers and Employees, both financially and personally, with the potential for staff to miss out on work or make a claim if they get unfairly injured.
The theme for this year World Day for Safety and Health at Work is “a safe and healthy working environment as a fundamental principle and right at work”. The primary aim of this day is to explore practical ways in which this fundamental human right can be implemented in workplaces worldwide which we as a firm support.

The objectives are:

  1. The aim is to increase consciousness about establishing a positive and healthy work environment and decreasing fatalities and injuries related to work.
  2. To enhance awareness and encourage the implementation of secure protocols in the workplace.
  3. To emphasize the significance of Occupational Safety and Health (OSH) and its role in the workplace.
  4. To advocate for a work environment that prioritises wellness and promotes a healthy culture.

As an employer prevention is key. It is your legal duty to make sure you follow the right procedures and correct risk assessments to prevent accidents and keep an accurate record to show it. If things go wrong then you could be liable and employees may bring a claim.
Therefore use today to consider how you can support these objectives to prevent accidents in your workplace.

Family Asset Protection Trusts

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H M Revenue and Customs introduced compulsory registration of all trusts in September 2022. A number of our clients had been contacted by the companies who had advised on and set up, a Family Asset Protection Trust, asking them to arrange registration of their trust.

It has become apparent that many people are being advised by such companies to enter into these trusts at considerable cost believing that their property will be protected against inheritance tax and/or care home fees.

These companies are advising clients to transfer their property or cash into these trusts during their lifetimes and advising them that their property or cash would no longer form part of their estate and that the trust would then own them. The inference being that their value would not be taken into account on death for inheritance tax purposes or when moving into permanent care and calculating their contribution towards care fees.

However, local authorities are permitted to investigate a person’s financial history, including money transferred outright to another person or into a trust. The local authority can deem this to be deliberate deprivation of capital i.e. the transactions had been entered into specifically to reduce the value of a person’s estate. In such instances, the local authority can disregard the transfer and deem the person to still own those assets. The local authority have been known to look back into transactions up to 15 years prior to a person going into care for transfers. The long and short of it is that if the transfer had been entered into due to concerns over care fees, it will be deemed to be deliberate deprivation of capital.

In addition, if an asset has been transferred and the person retains some benefit in that asset i.e. they transfer their house but continue to live in it, they are deemed to have reserved a benefit in the asset. For inheritance tax purposes this is known as a gift with reservation of benefit, which does not reduce their estate for the calculation and its value is still taken into account.

Unfortunately, it appears these trusts, which often cost thousands of pounds, are not correctly explained to clients and they end up entering into what Age Concern describe as “a worthless piece of paper”. Sadly, they can also lead to future costs where the trust company are named as trustees and any changes are needed to the trust.

If you have any queries about Family Asset Protection Trusts or wish to discuss care home fees or inheritance tax planning, please contact our private client team.

Sarah Bruce, Legal Executive, Haverhill/Saffron Walden office
19 April 2023

Changes to tax rules between spouses April 2023

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Under the existing tax rules, a transfer of assets between former spouses or civil partners is made on a ‘no gain or no loss’ basis as long as said transfers take place in the tax year in which the former spouses or civil partners separated, thus any gains or losses from the transfer are delayed until such time that the asset is sold.

However, if the transfer takes place after the tax year in which the spouses separated it is treated as a regular disposal and will be subject to Capital Gains Tax (CGT) in the usual way.

The new rules which relate to transfers which occur after 6 April 2023 will allow for a lengthier period of the ‘no gain, no loss’ rule for up to three years after the year spouses cease to reside together.

Also, the ‘no gain, no loss’ rule will also now apply to assets that are transferred between spouses as part of an order on divorce without a time limit.

Situation 1

A married couple separated in June 2021, being the 2021/22 tax year. They agree that the wife will transfer to the husband her interest in an investment property that they jointly own.

If this transfer occurs in the same tax year in which they separated, then it will not be subject to any CGT further to the ‘no gain, no loss’ rule.

If this transfer of the investment property happens in the following tax year, the following tax year being 2022/23, it will be subject to normal CGT rules based on 50% of the market value less the wife’s 50% share of the purchase costs and accompanying legal fees.

However, if the transfer is deferred and does not occur until after the new rules are applied in April 2023, then it will be subject to no CGT under the new prolonged ‘no gain, no loss’ rule, and the husband will be taken to have received the asset at the original purchase cost.

The above situation will apply to married couples or those in civil partnerships who separated from April 2019 onwards, for the reasons that the new rules will benefit transfers within three years of a separation.

Situation 2

A married couple separated in February 2018. Unfortunately, they could not agree on the division of assets, and so, they decided to instruct legal representatives to issue applications at Court, which leads to lengthy delays. If their matter fails to settle until after April 2023, then the new tax rules will then be effective and any transfers made between them will be conditional on the ‘no gain, no loss’ rule.

Situation 3

A married couple separated in August 2022. Harmoniously, they broker a financial agreement after the application of the new rules (the husband will remain in the former family home and the wife will transfer her interest to him. The wife is to get a 45% share in the proceeds of sale when the house is sold. Consequently, the wife will be permitted to have her CGT Private Residence Relief remain despite the fact that she did not reside in the former family home at the time of its sale.

The CGT consequences of property division on separation or divorce is a complicated area to get to grips with. That being the case, do not delay on getting the right legal advice. Please contact our Family Department here at Adams Harrison on 01799 523441 (Saffron Walden), 01440 702485 (Haverhill), or 01223 832939 (Sawston). [email protected].