Re-Financial Planning - Update

Personalised Portfolio Bonds and UK Situs Assets

2011-08-18T16:27:00.003+01:00

Personalised Portfolio Bonds are taxable for UK residents based on the T&Cs of the policy permitting such investments rather than the underlying investment.

UK OEICS, Unit Trusts and GILTS are excluded property for UK IHT when owned by non-UK domiciled individuals. However, the exclusion does not list UK: equities, fixed interest securities investment trusts, bank/ deposit accounts and ETFs.

The IHT nil rate band is available to everyone regardless of domicile, follow this link for information.

Treasury consultation on a statutory definition tax residence

2011-08-12T13:16:00.004+01:00

An interesting article from Citywire on the proposals from HMRC with regard to imposing a statutory test for tax residency.

Have you got a Will?

2011-08-12T12:20:00.000+01:00

This Intestacy flowchart sets out what would happen to your estate in the event of passing away without a valid Will.

Pension unlocking - High Court freezes pension reciprocation scheme assets

2011-07-19T10:53:00.000+01:00

A High Court judge has issued a freezing order affecting over a million pounds of assets. Papers released by
the High Court revealed that three related firms - Ark Business Consulting, Ark Commercial Pension
Planning and Ark Commercial Retirement Planning - had been prevented by Mr Justice Henderson from
moving around £1.08m from the country to Cyprus. The monies frozen relate to fees billed by the firms
when a pension scheme member tries to "unlock" their monies while under age 55. The schemes claim to
be able to circumvent minimum pension age rules by writing loans (of up to 50% of the pension scheme
funds) to members instead of paying pension benefits.

The law firm McGrigors is acting on behalf of Dalriada Trustees and their pensions partner Ian Gordon said:

"Many of these so-called unlocking schemes test the boundaries of what is legal and effective, and everyone should be made fully aware of the risks. The types of organisations who typically market schemes
of this nature are often registered abroad and as such are not regulated by the FSA. We would advise
anyone who is approached with an 'unlocking' or reciprocation proposition to proceed with the utmost
caution. Some press reports have indicated that pensions reciprocation agreements are marketed as a
means to free up investment for capital in overseas real estate ventures, and that type of arrangement
should sound alarm bells."

The Pensions Regulator and the FSA also issued warnings about such schemes last month

Non-Resident? Non-domicile?

2011-06-17T16:42:00.000+01:00

The Telegraph's Ian Cowie on the need to update the tax system to cope with issues of residency and domicile.

VCT vs EIS

2011-06-17T16:35:00.000+01:00

A good article from Investors Chronicle on these tax efficient investment vehicles.

Index Linked Savings Return

2011-05-23T10:29:00.000+01:00

Tax free, index-linked, 5 year savings from National Savings and Investments.

Pension - Fixed Protection

2011-05-23T10:25:00.001+01:00

Anyone without primary or enhanced protection can apply for the new fixed protection. Individuals are only likely to need fixed protection if they think that their benefits from all registered pension schemes will be more than £1.5 million when they take their benefits. With fixed protection there are restrictions on further benefit
accrual after 5 April 2012.

HMRC clarify £20,000 Minimum Income Requirement

2011-05-06T17:42:00.000+01:00

Recent press articles have suggested that an individual wishing to make a flexible drawdown declaration must
be in receipt of secure pension income of at least £20,000 that is actually paid or payable in the tax year in
which the declaration is made and this would appear to be the correct understanding.
For example, if the secure income consisted of a conventional lifetime annuity for £30,000 payable monthly in
arrears (i.e. £2,500 per month) when the annuity was first taken out the monthly income would have to be
receivable for at least 8 months of that tax year in order for the £20,000 requirement to be reached in the first
tax year.
Source Threesixty services llp

Budget Guide 2011

2011-04-11T14:38:00.000+01:00

Download our latest guide from here

Junior ISA from November 2011

2011-04-04T08:22:00.000+01:00

Tax free savings for children with a limit of £3,000 locked away until your child reaches 18 - replaces CTF.

Equitable Life pays bonus to leave

2011-03-29T07:18:00.004+01:00

Equitable Life is to pay a one-off bonus of up to 12.5% to policy holders agreeing to transfer from the mutual insurer commencing 01 April 2011.

EFRBS and EBT FAQ

2011-03-07T13:52:00.000Z

HMRC release a FAQ document on disguised remuneration.

Income draw down rates reduce from April 2011

2011-02-16T09:42:00.000Z

HMRC has released the new GAD Tables for 2011 which see the maximum income reduce from 120% to 100% in addition the tables create a lower income at certain ages.

Delay to pension income changes

2011-02-04T17:23:00.000Z

The Government Actuary’s Department (GAD) may not be in a position to publish the revised tables of relevant annuity rates in time for the changes in April and in view of the delay, may state that the final cut off for when reference periods must use the new GAD tables will be the 5th June 2011. Providers may therefore be able to use the existing tables for reference periods starting before that date.

Residence, Domicile and the Remittance Basis

2011-01-28T16:33:00.000Z

HMRC has published a revised version of their ‘Residence, Domicile and the Remittance Basis’ document.
The amendments continue the shift towards emphasising the need to show a distinct break in the pattern
of one's life when seeking to break residence.

Unsecured Pension 5 yearly reviews – clarification from HMRC

2011-01-28T16:29:00.000Z

Three Sixty LLP have received clarification from HMRC regarding the situation where a client in unsecured pension, requests a review now but their pension year does not commence until after 6th April 2011.
HMRC have confirmed that (as expected) although the request may have been made before 6th
April 2011, if the new reference period starts on or after 6th April 2011 then the new limits and rules will apply to the ongoing fund, i.e. three year cycle and 100% income limit.

New deposit compensation limit for the UK

2011-01-12T17:22:00.000Z

The FSA has confirmed that the new deposit compensation limit for the UK increased from £50,000 to
£85,000 per person, per authorised firm, effective from 31 December 2010. This is the Sterling equivalent of the €100,000 deposit compensation limit which came into force in all European Economic Area (EEA) member states at the end of 2010.

Further changes coming into effect on 31 December 2010 are:

• Fast payout rules, with a target of a seven day payout for the majority of claimants and the remainder
within the required 20 days
• Gross payout, which protects customers by ring fencing their deposits if they have savings and loans
with the same firm. Currently, any outstanding loan or debt would be deducted from any
compensation.

This new pan European requirement replaces the existing UK arrangement which has been in place since
2009, and which allowed for separate compensation cover for customers with deposits in two merging
building societies

All change for pensions.

2011-01-07T15:47:00.000Z

HMRC have published a summary of the impending changes such as:

the reduction in annual allowance
the removal of the requirement to annuitise by age 75 and
early access to pension saving

Let us know if you would like a translation.

The return of "Carry Forward"

2010-11-26T15:40:00.000Z

HMRC have now confirmed that an individual can carry forward unused annual allowance from any year (2008/09, 2009/10 and 2010/11) during which they were a member of a registered pension scheme, regardless of whether they made any contributions during that year or had a nil pension input amount during that year.

They have also confirmed that contributions must be paid into the same pension scheme and to obtain tax relief, earnings must support the contribution in the tax year that it is made.

UK Treasury tax relief review.

2010-11-10T16:15:00.000Z

Under the microscope are 1042 tax reliefs, which include inheritance tax relief and capital gains tax relief options. Which will survive only time will tell.

Trouble at Gartmore?

2010-11-10T10:15:00.000Z

A familiar story of defecting star fund mangers and a falling share price. You can almost see the vultures circling above. Read all about it.

Compulsory pension contributions - NEST

2010-10-27T08:40:00.000+01:00

From 2012, millions of workers will be auto-enrolled into pension schemes to which employers and employees will have to contribute.

State Pension Age Increases

2010-10-26T10:22:00.002+01:00

As a part of the 2010 Spending Review, the Government has formally announced a number of changes to state pension benefits, which include:

The pace at which the State Pension Age is equalised for women will be increased from April 2016 so that the female State Pension Age reaches 65 in November 2018, as opposed to April 2020. Full details concerning this will be issued by the DWP in the near future.

The State Pension Age will then increase to 66 for both men and women from December 2018 to April 2020.

Pension contribution tax relief and lifetime allowance

2010-10-26T10:00:00.001+01:00

From tax year 2011/12 tax relief on pension contributions will be restricted to an annual allowance of £50k pa. The annual allowance will be "frozen" until at least 2016/ 17. Tax relief will be available at your highest marginal rate of tax. You will be able to "carry forward" unused annual allowance from the previous 3 tax years, including 2008/09, 2009/10, 2010/11 (£50k pa).

The new lifetime allowance (LTA) of £1.5 million will start from tax year 2012/13. Transitional provisions will be introduced for those individuals who:

Have primary protection
Have no transitional protection, but have pension benefits currently valued in excess of £1.5 million
With pensions currently valued at less than £1.5 million, but who feel that the investment growth/benefit revaluation may take their pension value over £1.5 million
Enhanced and primary protection will be retained, but enhanced protection will no longer be exempt from the AA test.

The rules relating to trivial pension commutation will be de-coupled from the LTA, therefore the existing limit of £18,000 will not be reduced.

Goodbye to Clerical Medical

2010-10-25T09:29:00.001+01:00

Clerical Medical and Clerical Medical International investment products for new business will be re-branded to Scottish Widows.

Extending Disclosure of Tax Avoidance Schemes

2010-10-25T09:26:00.000+01:00

A package of five measures revising and extending disclosure of Tax Avoidance Schemes (DOTAS) was consulted upon following PBR 2009 and primary legislation was included in Finance Act 2010 (FA 2010). HMRC expect to be able to implement the package on 1 January 2011. However, some of the hallmarks (descriptions of schemes requiring disclosure) consulted upon will be implemented at a later date in 2011-12.

ISA limits 2010/ 11

2010-10-25T09:21:00.000+01:00

The new limit is calculated by reference to the RPI figure for the September before the start of the new tax year. The RPI for September 2010 was 4.6% so the 2011-12 limits (suitably rounded) will be an overall ISA subscription limit of £10,680 of which up to £5,340 can be subscribed to a cash ISA.

Tax allowable pension contributions reduced from April 2011

2010-10-14T13:17:00.000+01:00

From April 2011 the limits on tax allowable pension contributions will reduce from £255k to £50k. From 2013 the lifetime allowance will reduce from £1.8m to £1.5m. Hopefully, the Treasury will publish the details behind their proposals shortly.

Double taxation Digest

2010-10-08T15:55:00.000+01:00

Information from HMRC on double taxation agreements and in particular personal allowances for non-residents,

Transferable nil rate bands

2010-10-04T09:48:00.000+01:00

FAQs (and answers) with regard to the transfer of the inheritance tax (I.H.T.) nil rate band.

Performance fees - devastating impact

2010-09-29T13:27:00.000+01:00

A look at the devastating impact of performance fees on investment returns.

HMRC PAYE tax blunder

2010-09-09T08:11:00.002+01:00

Advice on challenging a demand.

UK Tax resident?

2010-09-09T08:07:00.000+01:00

An interesting article from The Telegraph on international tax matters.

RBS and NatWest (Scotland) Accounts transfer to Santander

2010-08-05T14:45:00.000+01:00

RBS account holders will have their accounts transferred to Santander find out more.

Treasury consult on tax relief for pension contributions

2010-07-30T15:26:00.000+01:00

Looks like the annual contribution allowance of £255k pa will be phased out in favour of a simpler but less generous limit of £30k - £45k per annum. The treasury will also consider the complicated issue of valuing defined benefit pension schemes. The changes are most likely to be implemented from April 2011.

Counting the cost of following fund fashions

2010-07-27T07:50:00.000+01:00

Interesting article from The Telegraph. Why you can't always believe the Investment Manager's hype.

International Adviser :: The Overseas Pension launches online tracking tool

2010-07-19T11:40:00.000+01:00

International Adviser :: The Overseas Pension launches online tracking tool

NS&I (National Savings and Investments) makes changes to product range

2010-07-19T07:50:00.000+01:00

• NS&I withdraws Savings Certificates from general sale

• Interest rates on NS&I Direct Saver and Income Bonds reduced

NS&I (National Savings and Investments) has withdrawn from general sale its current Issues of Savings Certificates (both Fixed Interest Savings Certificates and Index–linked Savings Certificates). The interest rates on the NS&I Direct Saver and Income Bonds have also been reduced by 0.25% with immediate effect.

Government launches consultation on removing requirement to annuitise by 75

2010-07-16T17:12:00.001+01:00

Financial Secretary to the Treasury, Mark Hoban MP, yesterday announced the start of an 8-week consultation on removing the effective requirement to annuitise by age 75, following the announcement in the June Budget that these rules will end from April 2011

The consultation document sets out proposals that will simplify the treatment of retirement savings and reduce complexity for individuals as well as for pension and annuity providers. The reforms will give individuals greater flexibility to choose the retirement options that are best for them, with more choice over how they can provide a retirement income for themselves.

From April 2011, there will no longer be a specific age by which people effectively have to annuitise. This will give people who wish to buy an annuity greater flexibility in the timing of their annuity purchase. The Government will also create more flexibility for people who do not wish to buy an annuity. USP currently allows individuals to take a tax-free lump sum at the beginning of their retirement if they wish, keeping funds invested in a tax-exempt environment while drawing down an income from their remaining pension pot in line with their needs, subject to a prudent drawdown limit. The Government will allow capped drawdown - equivalent to USP extended beyond age 75 - for the whole of an individual’s retirement. This means that individuals will be able to choose how much to draw down annually from their pension pot throughout their retirement (subject to a capped limit), or whether to draw any income at all.

The Government will go further than capped drawdown by creating additional flexibility for individuals who wish to draw down more than the capped annual limit. Under this flexible drawdown model, individuals will be able to draw down unlimited amounts from their pension pot, provided that they can demonstrate that they have secured a sufficient minimum income to prevent them from exhausting their savings prematurely and falling back on the state. The requirement to demonstrate a minimum income will apply at the point at which an individual wants to exceed the annual capped drawdown limit. The Government wants to ensure that the requirement to secure a minimum income is transparent and fair and can be implemented without undue complexity or burdens on individuals or business.

Both capped and flexible drawdown will increase flexibility for private pension savers before and after age 75. This will make it unnecessary to continue to offer ASP as an option after age 75. ASP will therefore cease to exist when new rules come into effect. The new capped and flexible drawdown limits and rules will apply to existing members of ASP from April 2011.

Further detail on proposed tax charges will be published in draft legislation later in the year.

The consultation document Removing the requirement to annuitise by age 75 is available on the HM Treasury website via this link. Responses to the consultation can be sent to: age75@hmtreasury.gsi.gov.uk. The consultation period started yesterday and closes on the 10 September 2010. Draft legislation for the reforms will be published in the autumn.

Emergency Budget "Highlights"

2010-07-14T17:56:00.002+01:00

Following last month’s Emergency Budget, we have put together some observations and planning points related to pensions, based around the following areas:

- Why put money into pensions

- Why do it now rather than later

- How do the new rules affect those taking pension benefits

Our Pensions Team can advise on these and a wide range of other pension and pension-related issues. Please feel free to contact us.

Why put money into pensions

- Capital Gains Tax (CGT) changes

CGT has increased from 18% to 28% for higher rate taxpayers. Investments held within a pension are exempt from CGT, so this strengthens the argument to invest via pensions rather than personally.

- Accelerated Increase to State Pension Age

The move to age 66 for the State Pension has been accelerated (April 2016 for men and April 2020 for women); as State Benefits diminish, the need for private provisions increases.

- Pension contributions for those with earnings between £100,000 and £130,000

Individuals with earnings in this bracket will see an effective rate of tax relief of up to 60% on personal pension contributions.

- Pension contributions for those with earnings between £130,000 and £150,000

Those with earnings in this bracket can make a pension contribution and mitigate anti-forestalling measures, which restrict the tax relief on the contribution. You can reduce relevant income by up to £20,000 by making a personal pension contribution potentially removing you from the restrictions altogether.

Why make contributions now rather than later

- Restrictions to higher rate tax relief

These had been mooted, but have been rejected. Instead, the proposal is that the Annual Allowance (currently £255,000) will be lowered to around £30,000-£45,000 per annum from April 2011. There is a window of opportunity for those with income levels above £30,000 but below £130,000, to make significant contributions that are above the new proposed annual allowance between now and next April.

Rules affecting retirees and those about to retire

- Under 55, in Unsecured Pension (USP) and considering a transferring your pension?

HMRC had ruled that those over 50, but under 55, who had entered USP could transfer to another USP scheme without this being treated as an unauthorised payment. However, the ruling said that any income drawn after such a transfer and taken before age 55 would be an unauthorised payment. HMRC have just issued an announcement confirming that they will introduce legislation, backdated to 6 April 2010, to allow those in USP to transfer and draw income without penal taxes applying.

- Reaching (and going beyond) age 75

The requirement to secure an income e.g. buy an annuity or use Alternatively Secured Pension provisions by age 75 has been scrapped. New rules will be introduced; in the meantime anyone who turns 75 on or after 22 June 2010 can defer their decision until the rules are finalised.

Pension death benefits for anyone in unsecured pension age 75-77 will be treated the same as the under 75s, i.e. a taxable dependent's pension can be taken from the fund or a lump sum less 35% tax. Note that there are still actions to take by age 75 so it is not a question of “doing nothing”.

Marc Stemmer joins REFP

2010-07-14T17:35:00.000+01:00

Marc Stemmer studied Law and Politics at Guildhall University graduating in 1996.

He spent several years with city institutions ABN AMRO and JP Morgan Chase where he had roles in management and trading and investment positions on a convertible bond desk.

In 2005, Marc joined Hurst Independent Financial Services in the niche area of new build property finance before moving to M&N Insurance Service Ltd where he ran their mortgage and financial insurance department. In June 2010, Marc joined Re-Financial Planning where he is involved in Business and Financial Protection in addition to tax and retirement planning. Marc has attained all the requisite qualifications in this area to date.

Money is debt..

2010-06-01T13:45:00.000+01:00

Ever wondered how money is created? Watch this video.

Santander brand replaces: Abbey, Alliance & Leicester and Bradford & Bingley

2010-05-24T11:50:00.000+01:00

Anyone with accounts in more than one of these institutions should be aware that the financial protection currently offered may be reduced. The maximum possible protection, £50,000 x 3, will be reduced to £50,000 x 1.

Emergency Budget 22 June 2010

2010-05-17T14:04:00.001+01:00

Coalition financial planning highlights

2010-05-13T15:02:00.005+01:00

The following are some of the interesting points arising from the Conservative - Liberal coalition Government:

Emergency budget within 50 days.
Substantial increase in the personal income tax allowance from April 2011
Taxing non-business capital gains at rates similar or close to those applied to income, with generous exemptions for entrepreneurial business activities
Possible restrictions on higher rate tax relief on pension contributions
Unlikley to be immediate substantial changes to Inheritance Tax
An increase in Employer National Insurance thresholds
Phasing out the default retirement age, set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women
End to the rules requiring compulsory annuitisation of pensions at 75.
Expectation that VAT will increase to 20%
Limitation to the Child Trust Fund
Fair and transparent payments to Equitable Life policy holders, for their relative loss as a consequence of regulatory failure

Free guides available from the REFP website

2010-05-11T12:54:00.001+01:00

Download our latest guides to:

2010 Budget
Inheritance tax planning
SIPPs
Wealth planning

"Fryer and Ors v HMRC" - tax on pension death benefits

2010-05-09T18:36:00.000+01:00

The recent ruling in the case of “Fryer and Ors v HMRC” is another example of HMRC tightening the screw.

The case of “Fryer and Ors v HMRC” concerned an individual who deferred taking her pension benefits at the notional retirement age of 60 and died age 61. The lady in question had no need for the income at that time having sold her business.

HMRC successfully contended that the deceased, by deferring pension benefits, had made a disposition for inheritance tax purposes and that the pension death benefits should be chargeable to inheritance tax.

Anyone who has deferred starting benefits from a UK pension may wish to reconsider their position. For those with pensions who have not reached retirement age it may be appropriate to extend the normal retirement age to 75 (assuming that no penalties apply).

Bereavement lump sum payment and Bereavement Allowance

2010-04-16T14:58:00.000+01:00

When the death of a spouse happens, thinking about money is the last thing we want to do. But funeral costs can vary from one funeral director to another and can end up being quite expensive. This is where the Bereavement payment can help. If your husband, wife or civil partner has died you may be able to get Bereavement Payment, a one-off, lump-sum payment of £2,000 that's tax-free. This is payable if you were under State Pension Age (60 for women and 65 for men) when they died. However the payment must be claimed within 12 months of date of death or is lost.

The Bereavement Allowance is a taxable weekly benefit paid to you for up to 52 weeks from the date of death of your husband, wife or civil partner. Claims can only be backdated three months for Bereavement Allowance and this starts from date the office gets them.

2010 Budget Update

2010-03-26T08:44:00.002Z

All the news from the budget.
Review of EFRBS & EBTs announced with potential changes from April 2011.
HMRC has said it is looking into proposals to extend trivial commutation rights to personal pensions funds worth up to £2,000 and allowing couples to pool small pension pots in order to achieve better value by buying a joint life annuity.

New reduced QROPS fees at The Overseas Pension

2010-03-18T08:31:00.000Z

Leading QROPS provider "The Overseas Pension" from Fairbairn Trust Company Ltd announces new reduced fee schedule.

Tax exiles under the spot light.

2010-03-18T08:28:00.000Z

The recent Gaines-Cooper ruling brings tax residency in to question.

Enterprise Investment Schemes

2010-03-18T08:19:00.000Z

Worth another look? £1m investment over 2 years, 20% tax relief, C.G.T. free, I.H.T. free after 2 years, C.G.T. deferral.

Gilts: who owns the UK's Gilts

2010-03-01T11:22:00.001Z

As the Bank of England's quantitative easing programme comes to an end, what will this mean for gilts? This BBC article looks at who owns the UK's gilts.

Savers are losing our by not utilising their ISA allowance

2010-02-24T14:39:00.001Z

The Yorkshire and Clydesdale Group have found that savers have lost a total of £13billion by not using their ISA allowances over the past eleven years! Read more about ISAs by clicking on the link...

Northern Rock to lose 100% deposit guarantee

2010-02-24T13:48:00.000Z

The removal of the 100% guarantee will take place on 24 May.

Tax schemes too good to be true?

2010-02-16T17:33:00.000Z

The new edition of the HMRC 'Spotlights' publication includes an article on loss relief schemes that in HMRC's view do not have the intended effect. Individuals considering investing in these schemes need to be aware that the relief claimed may be challenged and repayments withheld.

Coporate bonds and Gilts available on the London Stock Exchange

2010-02-16T17:31:00.000Z

The London Stock Exchange (LSE) launched a new electronic order book for retail bonds on 1 February.

Private investors can now see on-screen prices for bonds and deal in increments of £1 for gilts and £1,000 for corporate bonds. The idea makes bond dealing much the same as share dealing for the individual investor.

Initially the system only offers 49 gilts and 10 corporate bonds (3 of which are from BT) with further bonds, specifically tailored to the retail investor, expected soon.

Fidelity becomes the first UK asset manager on Facebook

2010-02-08T12:56:00.001Z

Last week, Fidelity launched its Facebook page in an effort to increase communication with existing and potential investors. The page - www.facebook.com/fidelityuk - will offer tips from investment advisers as well as exclusive offers on funds and tools to help manage portfolios. Webcasts and events to be held in the future will also be promoted.

Re Financial Planning Limited has had its Facebook Group set up for many months now, and it is heartening to see investment houses following suit. As time goes by and technology and online media becomes more and more the norm, it offers an opportunity to reach people that traditionally would not have thought about their financial planning and ensures that a wider audience has access to the information that affects their own personal finances.

Search Re Financial Planning Limited on Facebook and join up now!

Re Financial Planning nominated as IFA of the Year by Citywire!

2010-02-08T12:34:00.000Z

Everyone here at Re Financial Planning was delighted to learn that we had been shortlisted to receive the prestigious IFA of the Year award at the recent Citywire Annual Conference. Will Greenwood, former England and Harlequins rugby player, was on hand to help dish out the awards. Unfortunately, we were just pipped to the post! Disappointing though it of course was, this only gives us even more motivation to go back and bring home the trophy next year!

The conference itself was very interesting, with former Monetary Policy Committee member David Blanchflower speaking about his views on the economy: what has happened and what we can expect next.

Is the nil rate band trust/ will trust still relevant?

2010-01-20T09:36:00.000Z

On first sight there doesn't look to be many reasons for retaining the nil rate band trust (Will trust) but the following are some of the issues that mean that a nil rate band trust might still be desirable:
Avoiding the local authority change

There may be a desire to avoid assets being available to the local authority in the event of the survivor going into care. By leaving assets to a trust on the first death those assets will not count as part of the surviving spouse´s resources for the purposes of the local authority charge. Indeed, the split ownership of certain assets between the trust and surviving spouse may reduce the value of the assets in the hands of the surviving spouse- for example in the case of a private residence.

Using Loans

Further IHT savings could be secured by the trustees of the Will trust making loans to the surviving spouse if and when funds are needed which create debts and so reduce the taxable estate of the survivor on his/her subsequent death.
Expected high increase in asset value
It may be felt that investments made subject to the Will trust on the first death will increase in value at a greater rate than the increase in the nil rate band.

Concern over widow/ers future re-marriage

The testator may wish to ensure that his or her assets (in this example at least to the value of the nil rate band) pass to his or her children after the death of the widow/er.

Even if a discretionary Will trust does come into existence on the first death and, after the first death, this is not required there would, within 2 years of death, be scope to appoint absolutely out of that discretionary trust and achieve the same IHT results as if the asset had passed directly under the Will. Care must be taken that such appointment is made at least three months after the death.

NS&I Income Bond payments delayed

2010-01-13T12:09:00.001Z

Eight thousand savers who bought income bonds from National Savings & Investments have not received their interest payment for this month because of ‘technical issues’, the government-owned institution has said. Read more by clicking on the heading above...

Investment wisdom from CNN Money

2010-01-06T12:14:00.000Z

Interesting article from CNN, naturally it's from a US perspective but with relevance to the UK.

Can you better the pension offered by your pension provider?

2010-01-04T09:52:00.001Z

Pre Retirees who shop around for an annuity are around 50 times more likely to get a better income than those who stick with their existing pension company, says the Association of British Insurers. To read more, click on the heading above...

Fixed Rate Bonds - Best for the year ahead

2010-01-04T09:48:00.001Z

Reading through the FT last weekend, my attention was caught by the article about Fixed Rate Bonds. With the Bank of England Base Rate predicted to be on hold at current levels for most of 2010, are they are still an attractive investment??

FTSE 100 - Best guess for 2010?

2010-01-02T09:01:00.000Z

From 3,980 through to 6,748 the experts agree the paramaters or at least the normal distribution.

Will Britain lose its AAA credit rating?

2009-12-15T15:10:00.005Z

Stephanie Flanders the BBC's economics editor considers the outlook for Gilts. "There's been a lot of talk about Britain losing its AAA credit rating down the road. But guess what? As far as the markets are concerned, we already have........"

The 250% tax on pension contributions

2009-12-13T15:22:00.002Z

High earners with occupational pensions beware!

Ten ways to beat Alistair Darling’s big squeeze

2009-12-13T15:19:00.001Z

An interesting article from The Times on Sunday.

Pre Budget Report - Pension contributions for high earners

2009-12-10T09:55:00.002Z

My understanding of the latest change is that if you earn/ have income of £150k + the tax relief on contributions will be restricted if contributions exceed £20k or in certain circumstances £30k per annum. Employer pension contribution were not included in the calculation of earnings/ income.

The amendment in the PBR states that for those earning £130k + employer pension contributions will be included in calculating the £150k level.

Simple.

Annuity rates fall to record lows

2009-12-04T11:57:00.004Z

See the recent article in the Financial Times. Annuity rates have fallen over the past 15 years, but are there other advantages to annuities? Click here for the article in full.

Insuring against the risk of serious illness

2009-12-02T15:55:00.001Z

You are five times more likely to suffer from a life-threatening illness than you are to die before you reach 65, insurance claims statistics suggest. You might expect therefore that the risk of falling seriously ill is something that people readily address when planning their finances.

However, whilst most people have some sort of Life Insurance, far fewer address the risk and potential impact of falling seriously ill. Critical Illness Insurance Cover can offer a solution.

Typically, most clients either have or look to put in place, two forms of insurance cover:

- Life Insurance to help their dependents in the event of their death; it might replace earnings, pay off a mortgage or provide a lump sum for other use (e.g. shareholder protection).
- Income Protection to cover the risk of loss of earnings due to long term illness or disability.

We advise on whether clients have too much or too little cover or indeed whether they have the right kind of insurance cover. In many cases, we consider a third form of cover:

- Critical Illness Insurance Cover (CIC) which pays a tax-free lump sum if you are diagnosed as suffering from a life threatening condition- the most common conditions resulting in claims are cancer, stroke and heart attack.

For your free 27 page, electronic guide to Protection, giving details on these and other types of personal and business protection, please send an email to jacqueline@refp.co.uk

More and more members now staying with their occupational pension schemes

2009-11-23T10:04:00.004Z

The number of people leaving their pension schemes fell to its lowest level this year, while enquiries about the current value of the pensions rose to its highest level, according to Aon Consulting in a recent article from the Financial Times. Enquiries from members regarding their pension schemes were up 26 per cent from June. The number of members leaving their pension scheme also fell by 34 per cent during the third quarter. The research included 350,000 scheme members from 35 UK defined contribution (DC) and defined benefit (DB) schemes. The fall appears to indicate increased confidence in private sector pension schemes and a growing interest in planning for retirement. Click on the link above for the full article.

National Savings Withdraw Fixed Rate Bonds

2009-11-22T19:57:00.004Z

As the title says NSI withdrew their highly competitive range of fixed rate bonds following complaints from various banks and building societies. Leaving savers with lower rates and banks with higher margins and greater profits. Something wrong here?

What they don’t teach you at business school

2009-11-16T07:52:00.001Z

Merryn Somerset Webb looks at Value Investing: Tools and Techniques for Intelligent Investing.

Another commercial property bubble?

2009-11-13T17:21:00.002Z

This week Aviva pulled the sale of nearly £1 billion of property assets held in funds containing £15.6 billion of offices, shops and sheds. Why?

Pre-Budget report 9th December

2009-11-11T16:06:00.002Z

Alistair Darling will unveil his pre-Budget report on December 9, at 12.30pm. We can hardly wait.

Early retirement don't lose out.

2009-11-05T16:06:00.004Z

The minimum age for drawing a pension will rise from 50 to 55 from 6th April 2010. If you are one of the 3 million people effected by the changes please feel free to call us and discuss your options - 020 8209 9247.

Investment review

2009-10-29T15:54:00.001Z

Jonathan Ruffer from Ruffer LLP shares his thoughts on investment markets.

Barclays Bank Plc buys Standard Life Bank

2009-10-27T08:06:00.003Z

After 11 years Standard Life sell their banking arm to Barclays.

Non-resident? HMRC 6

2009-10-22T09:45:00.003+01:00

HMRC 6 is the replacement to the IR20 booklet and sets out the criteria for determining whether or not an individual is UK resident for tax purposes. The main innovation is the removal of day counting and the introduction of the "Factors ". The only time when only day counting will be used is the 183 day rule. HMRC is attempting to take away the perceived certainty of the day counting and replace it with a vague set of Factors which need to be considered before it is accepted that someone is non resident. This means that it is no longer good enough for individuals to simply, for example, avoid spending 90 days per annum in the UK to avoid being UK resident. HMRC will look at other Factors (such as available accommodation). This is clearly unsatisfactory for taxpayers as it is difficult to predict what the outcome will be in each case. Follow the links for more information Thomas Eggar HMRC (page 15).

High earners and pension contributions

2009-10-21T09:15:00.002+01:00

The 2009 Budget introduced changes which will affect high earners (earning £100,000 or more) and the pension contributions that they might make. The reduction in the personal allowance and increase in income tax rate make pension contributions an attractive planning option. However, contributions may need to be carefully planned to avoid tax charges under so-called "anti-forestalling" measures.

AEGON Scottish Equitable have produced one of the clearest and most user-friendly explanations of the changes and its implications we have found.

Permanent Interest Bearing Shares (PIBS)

2009-10-14T09:05:00.004+01:00

PERMANENT interest bearing shares or PIBS are special shares issued by building societies that pay a fixed rate of interest. They cannot be sold back to the society but can be bought and sold on the stock exchange, which means the price varies. A few years back, Permanent Interest Bearing Shares or Pibs were considered to be as good as gold, and were considered to be a safe home for income seekers. The problem with PIBS is that in the event of a building society being wound up, PIBS owners will find themselves some way down the queue and may not get back all of their capital as they are not protected by the FSCS. In the past, this was an acceptable risk where the possibility of a UK building society being wound up would have been almost zero, but as we have seen this is all changed now.
Some building societies, such as Bradford & Bingley, have decided not to pay the interest payments, which is catastrophic news for those who rely on this to supplement their income, such as pensioners. Trying to sell them on can prove difficult, as PIBS are an illiquid investment and now, with the danger of suspended interest payments looming, no one wants to buy them.

Banks finally forced to make charges more transparent

2009-10-08T14:48:00.003+01:00

Look at this article from yesterday's Financial Times - how banks and building societies have finally bowed to the pressure from the public and the Office of Fair Trading. Not all good news though, unauthorised overdraft charges still lack the clarity required...

Disclosure of undeclared offshore income

2009-10-06T11:16:00.003+01:00

HMRC has given individuals with undisclosed offshore income and gains a chance to disclose with a fixed penalty of 10%.

Law Society notes on gifting assets

2009-10-06T11:11:00.002+01:00

An interesting guide to gifting and care provision.

QROPS in The Sunday Times

2009-10-05T09:44:00.001+01:00

OVERSEAS pension funds have seen demand soar over the summer, as a growing number of Britons plan to retire or move abroad to avoid the new 50% tax.

Handling benficiary designations

2009-10-01T11:48:00.003+01:00

A useful summary of designating beneficiaries for life and pension plans.

Gibraltar suspends QROPS transfers

2009-09-24T10:13:00.002+01:00

Administrators of QROPS in Gibraltar are holding off UK pension transfers pending the resolution of a tax query raised by HMRC.

IHT Planning

2009-09-24T10:10:00.005+01:00

Are Family Limited Partnerships and Family General Partnerships the modern alternative to trusts? Read more or call us to discuss.

High earners - Pension amendments to the 2009 Finance Bill

2009-09-21T11:22:00.004+01:00

If your income has been over £150k in the past two tax years or will be this year then your pension contributions may be restricted. More details can be found here or call us to discuss your particular case - 020 8209 9247

What has the FT got to say about your pensions?

2009-09-21T11:03:00.003+01:00

The FT Weekend had a couple of interesting articles regarding Pension Savings.

The first was about Protected Rights: now that they are allowable within a Self Invested Personal Pension (SIPP) is it wise to move? The answer of course is that it depends on your own circumstances and requirements, but certainly worth a thought for those who have existing Protected Rights.

The second article refers to Company Pensions. In this era of cost cutting, should you be worried about your employers contribution to your pension? What can YOU do to ensure your pension remains healthy.

The Sage of White City

2009-09-09T12:36:00.002+01:00

Robert Preston looks at the longer term implications of corporate debt repayment.

Financial Planning Week - Top Tips

2009-09-07T10:35:00.004+01:00

As members of the Institute of Financial Planning it's time to "wave the flag" for Financial Planning Week. Click this link for Top Tips on financial planning and other useful information.

Why borrowers are not staying with Standard Variable Rates

2009-08-26T09:36:00.005+01:00

I had a call from a journalist the other day regarding the results of a recent survey from Unbiased.co.uk. This survey found that only 27% of borrowers who reached the end of their fixed rate stayed on the Standard Variable Rate (SVR). Isn't this surprising he asked? Shouldn't the number be higher? I wasn't surprised, for a couple of different reasons...

Firstly, the SVR, while linked to the Bank of England base rate, is the lenders rate and therefore they decide what it will be. As I am sure you know from reading in the news over the last few months, most lenders have decided not to pass on the rate cuts the BoE implemented, therefore in many cases making the SVR unattractive for some borrowers. Time and time again I have found myself having to explain to an irate client why they are facing a rate of 4.84% when they reach the end of their fixed rate when the BoE rate is 0.5%. This rate incidentally, is what the Bank of Scotland has charged since pretty much since last February, ignoring all the subsequent rate cuts.

Another reason is that many people have become much more cautious since the credit crunch hit. Those who are on a variable rate are savvy enough to realise that the situation will improve - for example the Institute of Chartered Accountants in England and Wales recently found that confidence among business professionals has turned positive for the first time in two years, indicating the recession may be at an end. Rates will increase significantly and many borrowers now realise the need to fix into good rate for a longer period. Five year fixed rates have increased over the last two months as many lenders are realising this too.

If your fixed rate is coming to an end, now is the time to do something about it!

Is the stockmarket recovery sustainable?

2009-08-03T08:39:00.004+01:00

Is the current stockmarket recovery sustainable? Do you believe in a "V" or a "U" shaped recovery? My favourite pessimist Merryn Somerset Webb writes.

Property market prospects

2009-08-03T08:30:00.001+01:00

He got out of the property market with £370 million by selling Foxtons now Jon Hunt's calling the bottom of the market. Read all about it.

How to shelter your investments from the 50% tax rate.

2009-07-27T07:43:00.003+01:00

Ellen Kelleher at the Financial Times looks at some of the strategies that can be adopted for avoiding 50% tax on your investments.

Is your workplace pension enough?

2009-07-20T10:07:00.003+01:00

So you are lucky enough to be in a job which offers a Final Salary pension scheme and both you and your employer contribute regularly - surely you do not need to think further about your pension pot? Not according to a recent survey by Standard Life. It has found that while one in six people want to work past the current retirement age of 65, a third believe that they will have no other choice. See the full article on why your workplace pension may not be enough - click HERE.

Friends Provident and the Resolution Offer

2009-07-14T12:03:00.004+01:00

Robert Preston's interesting look at the recent offer for Friends Provident.