Financial News Update we 23/4/2010

Good Morning,

An early update this week…

So, who won your vote then? The televised debate was a “first” and gave them the opportunity to shine but what did you think of their proposals?

Quite a few articles this week, although I had to sift (if you will pardon the pun!) through all the volcano related items out there… why is there so much scare mongering when these things happen?

Anyway, hope you have a fantastic rest of the week and enjoy the weather at the weekend!

Estate Planning

Daughter sues (Father) trustee for unrealised estate proceeds http://bit.ly/9vn1yf
Flaw in Perpetuities Act may hobble pension trustees http://bit.ly/brrx5G
Tory Manifesto, it’s official – “…will raise the inheritance tax threshold to £1m...” http://bit.ly/dtTHHz

Long Term Care

Brown, Cameron and Clegg debate social care http://bit.ly/bduXXo
Families set to join in care home review http://ow.ly/175hvT
BBC Radio 4 PM: Find a care home on a budget http://ow.ly/176eQL

Retirement

Make the most of Retirement http://bit.ly/bCMC2W
Who cares about Pensions? http://bit.ly/cW7xzL

Investments

Six reasons why markets have defied the doomsayers this year http://bit.ly/cH2dBc
Inflation jumps to 3.4% http://bit.ly/97KTvk
MPC members reveal inflation fears http://bit.ly/ahUz59

Regards
Kieron

Financial News Update we 26/3/2010

So how was it for you? Perhaps you feel, as many do, it was the calm before the storm as, no doubt, there will be another as soon as we find out who is ruining, sorry running the country?!

Although there were no great surprises, as most of the announcements had already been made, there were some good, as well as some not so good, news from Wednesdays budget.

Income Tax

The fact that the Personal Allowance & Higher Rate Tax Threshold was frozen may mean that more people will fall into higher rate tax (40 per cent) purely because of normal increments in pay.

Although previously announced it is worth reminding of the new 50% top rate on income over £150,000 (dividends rate is 42.5%) as this will obviously mean the need for advice is increased too.

Some of the more pertinent announcements and the planning opportunities for those affected could include:

Estate Planning

• IHT Nil Rate Band - frozen at £325,000 and this will apply for the next 4 years which may mean if/when assets recover more people will be caught by IHT. Planning for the impact of IHT will remain an important aspect of advice for many people.
• Entrepreneurs Relief – doubled to £2m enabling a greater saving against CGT for those business owners who sell.
• CGT rate 18% - this was somewhat of a surprise given the increase in income tax rates so perhaps those affected by the higher rates should certainly consider investing for capital growth as opposed to income even if only to use their CGT annual exemption of £10,100.
• Tax Rebates paid by the beneficiaries of settlor interested trusts may have to be paid into the trust i.e. if the beneficiary is the settlor and pays a lower rate of tax than the trustees. However, this additional payment to the trust is not subject to Inheritance Tax.

Retirement

• Tax relief on investments, i.e. pensions. Even where the new anti-forestalling rules apply making sure contributions of up to £20,000 (£30,000 in some cases) are paid in 2009/10 and 2010/2011 are used to qualify for full higher rate tax relief. Anyone with relevant income below £130,000 should perhaps consider how to maximise pension contributions as this limit could be reduced in the future?
• Reducing Income through Pension contributions (Salary Sacrifice) as the Personal Allowance will be restricted by £1 for every £2 of taxable income over £100,000 – effectively a 60% rate of tax for those with income between £100,001 and £112,950
• Lifetime Allowance freezing may be of particular significance to those whose pre A-Day protected tax free cash benefit could be gradually whittling away.
• As noted above those with relevant earnings above £150,000 will find restriction in the tax relief on pension contributions. The definition of relevant income includes employer pension contributions where income excluding this is £130,000 or more.

Investments

• Maximise the use of reliefs, exemptions and lower bands of income tax with transfers to spouses/civil partners.
• ISA’s may prove even more valuable as tax rates increase and with the ISA limit increase to £10,200 per annum (for all investors from 6 April 2010), the ability to shelter more can only be a good thing?
• Offshore Bonds Investments (which offer gross roll-up and control over the time of tax payment) may also be attractive for some.

Other points to note

• National Insurance - increase by 1% for the self employed, employees and employers from April 2011.
• Stamp Duty Land Tax - increase for properties over £1,000,000 to 5% from April 2011 and a nil rate band for first time buyers up to £250,000 for the next few years.
• Possible moves to bring AIM shares in line with the advantages of an ISA investment

If you spotted any others please do let me know?

Oh well, now we just have the election hype to contend with!!

Have a good weekend…

Regards
Kieron

http://www.wealthifa.com

WealthIFA Financial News Update

Well, as the snow finally subsides around Tunbridge Wells, perhaps now we can all begin the year in earnest?!...

So, if it is true that the over 50s are the majority of voters (http://bit.ly/6FWDHP), it is not difficult to understand why retirement is such a hot topic however, it would seem a common way forward is harder to find than you might expect?...

Having said that I am wondering what they will discuss once the election furore is over?... http://bit.ly/5rHtCH

Estate Planning

Opinion: Tax is needed to reduce our debt http://bit.ly/4sUtEV
Conservative IHT threshold increase will benefit just 12000 homeowners: http://bit.ly/4T4WqW
Proper Distribution http://bit.ly/5tLVGR
Bankruptcy and Estates http://bit.ly/91Mb31
Power of attorney should be made at same time as will, says government http://bit.ly/7u9urQ

Long Term Care

Jobs of the Future: The human aspect will still be needed (Number 8) http://tinyurl.com/ycp46k2
Helping the elderly stay in their homes: http://bit.ly/82kv7B
Plea for more cash for care homes: http://bit.ly/5bJhaK

Retirement

More firms shunning high cost pensions http://bit.ly/8wNnhf
Personal pension scheme named: http://bit.ly/6ynGv0
Case Study: Finding suitable SIPP investments http://bit.ly/7HF6ZR
Top tips to profit in an election year http://bit.ly/5Ojm8x
Promote good pensions now, URGENT action is required http://bit.ly/55nWmo
Has the stock market really put the profit back into 'with-profits'? http://bit.ly/7WMZ6P
Let's improve future pensions, not demonise existing ones http://bit.ly/78NnI5
Companies still struggling to plug pension deficits http://bit.ly/8D2tRx
Abolishing retirement age may stop people saving, say pension experts http://bit.ly/91iBeN
Standard Life “Retirement review welcome” http://bit.ly/5Xl5EK
Harriet Harman “…Retirement age rules 'arbitrary'…” http://bit.ly/5aXOn8
Backing for Harman retirement age review from another industry expert http://bit.ly/6FWDHP
Conservatives won't bail out Pension Protection Fund http://bit.ly/7PG6af
Pensions shake-up to be simplified http://bit.ly/6yK5ws
Jump in OAPs using homes to clear debt http://bit.ly/7eQBBa
But the government says, forced retirement age will not be abolished http://bit.ly/78cCwL

Investments

Funds that give you tax breaks for going green http://bit.ly/6F7RDE
Investment trusts offer alternative to their more popular cousins http://bit.ly/8lIUZJ
NS&I savings bond payments delayed http://bit.ly/7vuvsJ
Banks pocketing savers' Isa tax bonus http://bit.ly/7l4MoM
Useful year end tax planning tips to consider before April 2010 http://bit.ly/4UyQNT

And lastly, it looks as though it could be a long retirement for some of us as it emerges that one in five has the age-defying 'centenarian gene'.. http://bit.ly/6PcAEU

On that cheerful note, have a good week!

Regards
Kieron

http://www.wealthifa.com