The Times’s consumer champion Laura Whateley dips into her postbag and tries to help readers who have been let down by retailers or service companies.
After the death of my wife on May 1, Barclays automatically converted euros in her account, some €94,534, into sterling without instruction.
Barclays says it is the bank’s policy to convert foreign currency accounts into sterling upon being notified of a customer’s death.
It has never dealt specifically with my question as to what legal authority it has to do this in the absence of a customer’s instructions?
I would not have been surprised to have been told that terms agreed by my deceased wife when she opened the account give Barclays the necessary authority; however, they did not confirm this. I can therefore only assume that those terms do not exist. If they do then it is appalling that Barclays has failed to point this out, despite being given numerous opportunities to do so.
John Godby, via email
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Regardless of whether or not Barclays is entitled to take this decision, it should have been more helpful and sympathetic to a bereaved customer.
With savings amounting to nearly €100,000, the timing of a conversion matters greatly, particularly this year — conversion after Brexit, when the pound was weaker, would have benefitted John.
A spokesman for Barclays apologised that the conversion had caused John distress. However, he says: “I understand that Mr Godby believes that this action should not have been taken without his instructions and he feels the terms and conditions are unclear.
“Revenue and Customs requires all banks, upon notification of the death of a customer, to convert foreign-held funds into sterling and therefore this forms Barclays policy.”
The bank’s bereavement guide states: “Accounts will be closed upon notification and funds exchanged into sterling. This will then be transferred to the savings/current account in the name of the deceased customer and released in line with the closing requirements.”
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Barclays has offered John £100 as a “gesture of goodwill for distress and inconvenience”.
On checking with HMRC about this requirement, however, I was told: “We do ask for all the assets in an estate to be valued [when someone dies], but that’s it. “Definitely no currency conversions are needed. It is the valuation only we want for the inheritance tax return, we don’t start telling people how to manage their affairs and we certainly don’t instruct any bank to convert savings into sterling. That’s not in the rules. All the personal representative has to do is provide a value.”
Barclays didn’t respond to further questions about this, but did offer the following advice: “It is important that individuals understand how their assets will be dealt with upon their death and we would encourage them to seek estate planning advice.”
If you have a foreign currency account it is worth finding out what your bank will do with it when you die.
Tax tribulations My mother died last week and I am unable to determine whether her estate can benefit from the transfer of the unused inheritance tax (IHT) nil-rate band from her husband’s estate.
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My father was an RAF officer killed during active service in January 1945, leaving an estate of £431 7s 2d, according to the probate certificate. His widow, my mother, never married again nor formed any other relationship.
When the transfer of a spouse’s IHT nil-rate band was introduced, it was widely publicised that it did not matter how long ago the spouse
died and would apply even if the first death was during the period of Estate Duty, which was before IHT was introduced. In my father’s case the MoD has confirmed that he died during active service and that his death would have met the requirements of section 38 of the Finance Act 1924, but the letter concludes: “It will now be a matter between you and HMRC as to whether this will allow the full or partial transfer of a nil-rate band to your mother’s estate.”
This implies that I have to debate with HMRC over a potential tax bill increase of up to £130,000, if it even talks to me. Surely people in my situation should be able to determine relatively easily what allowances can be applied to the estate rather than being expected to negotiate or horse-trade with HMRC?
Peter Johnston, via email
HMRC says it doesn’t comment on individual cases and Peter will have to go to its inheritance tax technical team for advice. I am, however, told that he should be able to claim the relief. Before March 13, 1975, Estate Duty was charged. As with the later inheritance tax, though, it was not always levied when someone died as a result of a wound or illness incurred while on active service. Although there was no exemption from Estate Duty for assets passing from one spouse to another until March 1972, apparently a transfer of unused inheritance tax nil-rate band can still be made when the first spouse died during or after the Second World War and would have qualified for one of the reliefs.
HMRC says, however, that whether it is a transfer of part or all of the nil-rate band depends on each case.
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Left in the cold
On October 12 I bought a radiator from Chelmsford B&Q for £315. Delivery was promised “within two working days”. The next day I was phoned to say the item was out of stock, but they would get one within a week. By October 26 no radiator arrived, so I returned to the store and cancelled the order.
Due to “IT problems” this was not achieved, but a staff member promised to phone when successful. I have heard nothing.
Roger Cook, Burnham on Crouch, Essex
Five weeks later, into proper winter, and there has been no contact, refund or new toasty radiator. Funnily enough B&Q issued the refund days after I got in touch. “We have
resolved the matter and Mr Cook has accepted a full refund and a gesture of our goodwill.”
Write to: Troubleshooter, Times Money, 1 London Bridge Street, London SE1 9GF or email troubleshooter@thetimes.co.uk. Please include a telephone number. We cannot guarantee individual replies owing to the high volume of correspondence
