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Is higher rate tax relief on pensions under pressure?

31/08/2010

in Employed People, Financial Planning, Investments, Retirement, Tax Planning

The new limit of a £40,000 annual allowance for higher-rate tax relief on pensions may be under pressure
Abolishing higher-rate relief has been on the LibDem manifesto for some time. The TUC has argued it costs the Treasury more than public sector final-salary pensions.
The Centre for Policy Studies’ report suggests that as well as limiting tax [...]

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Past performance is no guide to the future

26/08/2010

in Financial Planning, Investments

Chief Exec of Pimco and a FT commentator, Mohammed El-Erian believes that investors have lived the past 20 years under a belief where investment rules of thumb worked. 
But no more!  The past is no longer a guide to the future (if it ever was). 
Instead, he says, the dispersion (or variation) in policy-maker’s expectations is unusually [...]

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Inheritance tax – No time to lose!

18 August 2010

The wealthy have no time to lose in planning their IHT mitigation
The recent announcement that inheritance tax (IHT) mitigation via transfers into trust is likely, in future, to be included in the Disclosure of Tax Avoidance Schemes (Dotas) regime is not good news.
The Treasury and HM Revenue & Customs (HMRC) proposal is what was expected [...]

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Inflation falls but is still above target

17 August 2010

The cost of Transport fall, but prices for food rise as inflation drops to 3.1%, but is still well over above the 2% target.
Inflation dropped down in July, but remains far above the government target imposed on Bank of England.
The annualised 3.1% rise in consumer inflation for July was down on June’s 3.2% increase, but [...]

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Consumer confidence

17 August 2010

Consumer Confidence
This week saw consumer confidence drop to its lowest level for 15 months, it also saw the pound falling against the US Dollar as investors became nervous about the state of the world economy.Consumers are perhaps worried about the level of disposable income they will have over the months ahead and the emergency budget [...]

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How long till the economic outlook will be considered “normal”?

9 August 2010

Bank of England governor Mervyn King believes it will be a long time before the economic outlook will be considered “normal”.
Wider economic problems around the world underline the fact that we cannot be confident that the recovery in demand, output and employment  in the UK will be sustained.  The fiscal tightening measures proposed by the [...]

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Default retirement age in the UK to be scrapped.

9 August 2010

In October 2011 the government is proposing to scrap the default retirement age and has launched a consultation process about scrapping the rule.
Currently employers are able to force an employee to retire at the age of 65 without paying any financial compensation but they must hold a meeting with the member of staff concerned to [...]

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Emergency money lending – where to turn when you need cash

21 July 2010

Apart from the obvious one for those still blessed with the option of the ‘Bank of Mum and Dad’, who do you turn to for a quick, short-term loan?
Payday loan companies thrive on high interest rates and huge APRs, but some people love them.  Personally, I think I’d be put off by being charged an [...]

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Capital Gains Tax – Just where are we now?

21 July 2010

Pre-Budget Report, 9th October 2007 – CGT flat rate of 18% for gains on non-business assets made on or after 6th April 2008.
6th April 2010 – income tax rate of 50% for those with incomes in excess of £150,000.
This all adds up to a differential of 32% for those individuals.  Was this sustainable?
The new Coalition [...]

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The world of pensions according to consultation!

12 July 2010

I watched the Emergency Budget with anticipation to see if and how the pensions world would suffer.  Before the Election we had several parties with differing views on pensions and we ended up with a Coalition not knowing how their policies would eventually look.
I came away from the TV thinking that there wasn’t much in [...]

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VAT – Budget rise in sales tax was ‘unavoidable’ says Chancellor

12 July 2010

We all pay it and we’ll all feel it.  The increase in the rate of VAT to 20% from 4th January next year will bring in £13 billion of extra revenue over the lifetime of the current parliament.
In his first Budget as Chancellor, George Osborne said that the rise in VAT from its current rate [...]

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Rise in CGT could also hit basic rate taxpayers

12 July 2010

The rise in Capital Gains Tax will hit some middle income earners who have invested in assets such as property over many years, tax experts have warned.
The announcement made in the budget last month by Chancellor George Osborne, revealed that the CGT rate for high earners will increase from 18% to 28%.  However, lower earners [...]

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Financial regulation in the UK

5 July 2010

On 16th June 2010, George Osborne gave his first Mansion House speech as Chancellor of the Exchequer.  In his speech, he announced radical changes in the UK’s financial regulations, which includes the abolition of the current tripartite system.
To replace it, the Bank of England (BoE) will be given responsibility for macro and micro-prudential regulation.  The [...]

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Latest inflation figures

28 June 2010

And so, inflation continues to alter.  In the UK price inflation, as measured by the Consumer Prices Index (CPI), has dropped to 3.4% for the year to May with falls in the prices of food, non-alcoholic drinks and petrol.  This is a fall from 3.7% and is bigger than expected.
The CPI inflation was forecast to [...]

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Make sure you don’t lose private residence relief if you work from home

28 June 2010

Working from home is growing in popularity.  However, have you considered if it could affect your Capital Gains Tax (CGT) private residence relief when you come to sell?
One of the best known tax reliefs, private residence relief allows a person to sell their main home without triggering a liability to CGT.  When someone owns more [...]

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Overview of the emergency budget

23 June 2010

This has been one of the most debated and highly anticipated Budgets in recent times. The Chancellor and the Coalition Government face three tests:

to communicate the size and scale of the measures necessary to reduce the deficit
to convince the markets they have a realistic plan to tackle the issue
and to convince the wider public that [...]

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Inflation rises

14 June 2010

CPI annual inflation – the Government’s target measure – was 3.7% in April, up from 3.4% in March.  The largest factors to the change in the CPI annual rate between March and April came from the rise in prices for clothing and footwear, food and non-alcoholic beverages and alcoholic beverages and tobacco.
Is it a good [...]

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House price surprise

14 June 2010

It’s no surprise to hear that the country’s finances are ‘in a mess’.  It is surprising to learn that house prices continued to rise in May and are now just 9.5% below the October 2007 peak, according to figures from Nationwide.
This is more surprising as a higher unemployment level is usually bad for house prices.  [...]

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Is your pension ‘in limbo’?

9 June 2010

Many people have been left in what could be described as a ‘pension limbo’, or indeterminate state.  If you were one of the people who took your pension benefits before the minimum age for doing so rose to 55, you too could be one of the many.  And frustratingly, there are many.  Why wouldn’t there [...]

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Become an EIS company – why not?

9 June 2010

The Enterprise Investment Scheme (EIS) is traditionally thought to be a high risk, entrepreneurial investment.  As a small business owner you would benefit from 20% tax relief and tax free capital gains.  These two benefits alone can make the scheme seem an attractive option.  However, many EIS investments fail to deliver a return and can [...]

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Just where are the ‘financial fires’ now burning?

1 June 2010

So, campaigning over, coalition formed and four weeks of arguing whether £6 billion or £10 billion worth of cuts now or next year is the right way to deal with a £156 billion deficit, the election delivers a government and its policies that nobody voted for.  Perhaps some of you say, ‘nothing new there’, but [...]

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Child trust funds scrapped

1 June 2010

New chancellor George Osborne has advised that Child Trust Funds will be scrapped in January.  What does that mean to people who already have an account and those who are expecting a baby?
Child Trust Funds (CTFs) were intended to give children a financial head start in life.  Currently, every baby born after 31st August 2002 [...]

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How about a tax free party?

5 May 2010

So if Chelsea do the double (come on you Blues), or heaven forbid England do well in the World Cup, can you throw a tax free party for your employees?
Well, the good news is yes you can, as long as the total spend is under £150 per member of staff. This can cover the cost of the food, [...]

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How good is your disaster recovery plan?

5 May 2010

Most people understand the need for backing up their computers on a daily basis and even making sure another copy is kept off site to make sure data is kept safe in the event of computer breakdown, flood or fire. Most sensible business owners have contingency plans in place to cover many eventualities with regard [...]

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What sort of annuity should you buy?

5 May 2010

Under current pension rules you will generally need to buy an annuity by age 75. (Unless you choose to use an alternatively secured pension plan.) Unfortunately many people still buy their annuity from their pension provider without first seeking experienced independent financial advice. At the very least everyone should look into using their open market [...]

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The new ISA allowances and rules explained

15 April 2010

As from the 6th April 2010 the new ISA rules and allowances have come into effect meaning everyone over the age of 16 resident in the UK for tax purposes can now save more tax efficiently. 
How much can I invest in an ISA?
The current limit (2010-2011) is set at £10,200 of which up to half [...]

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Tax avoidance by gifting money to your children?

7 April 2010

As the inheritance tax (IHT) nil rate band is now frozen for at least 4 years it seems that people are considering gifting money to their children to avoid this tax and also help their children onto the property ladder. 
These days credit is no longer easy to come by and lenders require large deposits and [...]

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The changes to pension tax rules for high earners are confirmed

7 April 2010

The budget statement confirmed the rules to restrict pension tax breaks for high earners as from 06/04/2011 and will replace the interim “anti- forestalling” rules introduced in the Finance Act last year.
Basically as from that date anyone with a “high income” will face a “high income excess relief charge” on any pension made for or [...]

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The budget 2010 – What action can you take?

24 March 2010

Many of the points raised in the 2010 budget, such as the budget deficit being 11 billion lower than forecast may come as good news but there is little most of us can do about it.
There were however many points that may require action.
ISA allowance to be raised by inflation
In 2009 the chancellor announced that [...]

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How long will your Trust last?

24 March 2010

The legal system in the UK states that property cannot be held in a Trust indefinitely. Future interest in a property held in trust must take effect within what is called the perpetuity period. In practice most trusts are set up for a fixed period of 80 years. 
However the perpetuities and Accumulations act 2009 which [...]

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Inflation and Bank interest rates

23 March 2010

The Office for National Statistics has just reported that the consumer price index fell from 3.5% in January to 3% in February. This adds weight to the Bank of England’s view that price pressures will continue to fall this year as the recessions continues to drive a fall in demand and consumer spending. Further drivers [...]

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The new government pension NEST charges are announced

19 March 2010

On Tuesday 16th March the government announced the charges expected to be applied to the new NEST (National Employment Savings Trust) pension scheme formerly known as Personal accounts.
The new NEST pension scheme is designed to help boost the level of pension contributions of lower and moderately paid workers. Eventually by 2016 all employees will be [...]

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Contracting out of the state second pension scheme stops

17 March 2010

The government has decided from 6th April 2012 to stop allowing employed people to choose to opt out of the Second state pension (S2P) unless they contribute to a Final salary (Defined benefit) pension scheme. The means that the National insurance rebates to do so will no longer be paid to your personal pension scheme from that [...]

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Pension tax relief for higher rate tax payers

17 March 2010

So the budget is fast approaching and there is lots of guesswork going on as to what is likely to happen.
A raise in the capital gains tax rate is more probable than possible, so sell now while stocks last is the way forward, if you are in the lucky position of having made capital gains.
However [...]

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Income protection – The big domino

16 March 2010

Most sensible business owners will have some form of disaster recovery plan in place. In other words, contingency plans to ensure the profits are protected by ensuring the business is up and running as soon as possible, in the event of a major computer systems failure, a fire or flood.
However very few give thought to [...]

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Pensions or ISAs – which is best?

16 March 2010

As the new tax year approaches everybody over 18 resident in the UK for tax purposes will be able to take advantage of the increase in the ISA allowances up from £7200 to £10,200. This will enable couples to make a contribution of £20,400 a year into a very tax efficient investment. Cash ISA allowances go up [...]

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Pension Annuity – buy now or wait?

16 March 2010

The last few months have shown an increase in pension annuity rates after a steady decline over the last few years. This is due to the recent rise in long term gilt rates which could rise further over the next few months.
Annuity rates took a hammering last year - down by around 10%. However, if your pension was still invested [...]

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Who does your financial adviser actually work for?

12 March 2010

I held a meeting yesterday with an accountant who was interested in referring his clients to us but did not really understand the way we charge fees. He explained like many accountants he charges a fixed fee for dealing with the clients accounts including corporation tax calculations and dealing with companies house submissions. He then [...]

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Happy ISA season – but take care

12 March 2010

With less than a month to go before the tax year ends the “ISA season” is now in full swing. Investment houses, banks, building societies have got their marketing departments in overdrive to attract investors and savers to invest their annual ISA allowance.
After a couple of volatile years, the stock markets have made a major [...]

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Pre-nuptial and post-nuptial agreements

11 March 2010

Yesterday I held a meeting with one of the law firms we have done a lot of business with over the last few years with regards to trusts, Inheritance tax and Estate planning. However this meeting was with one of their family law divorce lawyers and the main topic under discussion was pre-nuptial and post-nuptial [...]

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Salary v Bonus v Dividends

10 March 2010

If you are a small business owner and you are thinking about paying yourself more in the next tax year starting 6th April 2010, you need to talk to your tax adviser or financial planner on the following points:

If your income exceeds £100,000 you will reduce your annual personal tax allowance by £2 for every £1 [...]

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University of Financial Planning?

8 March 2010

As part of my duties as Vice Chairman of the Regional Personal Finance Society I had a meeting with a university lecturer at the University of Hertfordshire today. I was a little surprised that somebody who worked as a senior lecturer in the business studies department did not really appreciate the difference between financial planning [...]

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Bluebond’s new website goes live

6 March 2010

Welcome to the new Bluebond Financial Planning website.
We hope you like it and will bookmark it as a site to return to for help with your financial planning and financial advice.
Although the company has been trading for over 12 years this website replaced our original site in January 2010. As such we are working hard [...]

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