Tax should be Taxing, that’s actually the point.

Let’s be clear, tax avoidance is permitted, but tax evasion is not. We have all seen the way in which our National Debt has soared. In the current tax year many of us will experience some financial discomfort as result of tax increases and allowance reductions or restrictions. Perhaps it may be odd to say it, but I am not someone that thinks tax is a bad thing, although I would certainly suggest the amount, how the tax is raised and how it is spent needs an awful lot better thought and application. Indeed part of my job is to help clients reduce their tax bill – legitimately. Invariably the sort of tax avoidance that financial advisers like myself do are really a little bit of a gimmick to encourage people to save for their own benefit.

So I hope that I have been clear, I am in favour of tax and also in favour of avoiding tax. It sounds like a contradiction and it is in part. However, what I am not in favour of is tax dodging where multinationals effectively move money around from one tax haven to another in order to reduce their declared profit and as a result pay considerably less tax (if any). This damages poor countries by not remitting the revenue that they are rightly owed. This makes it harder for them to get out of poverty. It also damages our country. Indeed tax doding makes benefit fraudsters look like decidely small fry. As a result of lower tax revenues and the public finance commitments, more tax is needed for UK plc to cope, so the effect is (cuts aside) that more taxes are required, whether these are obvious or not. Politicians merely do there best to move the chairs around, we all know this, but it seems that it is rarely stated. I may be naive, but surely a better way to world peace is to ensure that we all prosper together.

I know of no reasonable person that deliberately makes efforts to keep the worlds poorest in poverty. A poverty that we are rarely exposed to, thankfully. However, unless reasonable people take action, fairly unreasonable things will continue. That is why I am involved with the Christian AidTrace the Tax Campaign“. I know that the world is a complex place, I know that we as investors are all seeking good returns and that we often hold shares within funds of companies that have some fairly nasty practices. I’m aware of my own hypocrisy’s. However I don’t think that doing nothing is an option. Have a look at the video and if you feel able, join the campaign. Its not about creating some sort of radical communist ideal, but about giving the poor a chance to get out of poverty and attain some dignity.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Tax should be Taxing, that’s actually the point.2023-12-01T12:51:23+00:00

For better or for worse… the tax benefits of getting married

Tomorrow is the “big day” and whatever your views about the coverage and national celebrations, I’m sure that most of us would wish Miss Middleton and Mr Windsor the very best for their future together. So, given that we are all very much aware of a certain wedding, perhaps this is an appropriate time to reflect on some of the tax issues surrounding “tieing the knot”.
David Pointer of Open Tax Consultancy explains..



David Pointer, Open Tax Consultancy



Any transfer of assets between spouses or civil partners who are living together are treated as being made on a ‘no gain/no loss’ basis for Capital Gains Tax (CGT) purposes. This can therefore provide an opportunity to ensure that both spouse’s or civil partner’s personal tax allowances and basic rate tax bands are utilised efficiently, and allow assets to be transferred without an immediate tax charge. This also helps couples to make use of their CGT annual exemptions. For example quoted stocks could be transferred between each other, especially if only one of you is liable to higher rates of tax and the other is not. To work transfers need to be genuine with ‘no strings’ attached.
On the flip side there is a major capital gains tax disadvantage of being married or in a civil partnership. This relates to the principal private residence exemption. For CGT purposes a married couple or civil partners who are living together can only have one ‘main residence’. Where a couple have two properties which are used as residences, their main residence will usually be determined based on the facts and a CGT liability could arise on the sale of the second property. It is possible to submit an election within two years of acquiring the second property to specify which should be regarded as the principal private residence. This can then be varied at a later date as required.
For inheritance tax (IHT) purposes any gifts between UK domiciled spouses or civil partners during their lifetimes or assets left upon death to each other are usually not chargeable to IHT.
David also reminded me that …It is also important to note that marriage or entering a civil partnership invalidates an individual’s Will so once married new Wills should be considered. This is an excellent reminder to ensure that your Will is up to date. The highlighted links will open up my guide to Wills (not a personal guide to married life to the Prince, but how to prepare the legal document!).
Finally, let’s not forget that marriage is a legal contract, a couple enters into an agreement to share everything, including assets and liabilities as well as the bathroom! So with this additional responsibility, thought should be given to ensuring that adequate financial protection has been arranged, perhaps making sure that any employee benefit schemes are notified about changes to beneficiaries. Of course, it would be very sensible to have a proper financial review that takes account of joint priorities and any plans for a family. These all have a dramatic impact on financial planning and the sooner that they are discussed thoughtfully the better. Something, that I obviously do with clients.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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For better or for worse… the tax benefits of getting married2023-12-01T12:51:24+00:00

Funds: Fidelity Fund Merger

Fidelity are proposing to merge two of their funds, both of which are managed by James Griffin. Fidelity want to merge the Fidelity Growth & Income Fund into the Fidelity MoneyBuilder Growth Fund. In order to proceed with the merger a motion will need to be approved at the next shareholder meeting on 25th May 2011. Assuming this is passed, the Funds will be merged on 16th July 2011. If you have holdings in this form you will receive a mailing directly from Fidelity.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Funds: Fidelity Fund Merger2023-12-01T12:51:24+00:00

Visions of Britain 2020

Friends Life are running a campaign or series called “Visions of Britain 2020” that attempts to reveal some of the financial trends that are happening here in Britain. I hadn’t heard it before, but was introduced to the term “Coping Classes” which Friends Life define as a middle-income group earning a total household income between £25,000-£50,000. Apparently this group make up 1 in 5 of the population (which by maths is 20%). Friends Life translate this as 8m people, but my understanding is that the UK has around 60m people, so 20% would be 12m. Perhaps they are only considering those earning money or having an income, which would exclude most children…but then why use terms like “household”? anyway their website has a lot of statistics, which on the face of it are certainly enlightening, but I’m afraid that I’m fairly cynical about most surveys and particularly those that attempt to extrapolate data and read trends across the entire UK.
Anyhow, some points to consider – something like 59% of this group would not be able to provide for themselves and any dependents for longer than 6 months if they lost their main source of income. 79% would not cope beyond a year. 80% of them have some form of debt (probably to be expected if they include a mortgage?). 41% of them say that they would turn to their parents for help if they lost their main form of income.
So why are Friends Life interested in this? well because they provide one of the best income protection policies going, which is one of the solutions to this problem. They are quite right to bring this to our attention, but of course most people are more complex than a set of statistics derived from a survey. Sorry, but I just don’t meet many people that divulge their financial information to someone with a clipboard in the street or even on the phone. Their soundbite videos are so short and lack any real information that I would worry about anyone drawing too many conclusions from them. Anyhow, if you are interested in the data, do have a look, if you are wondering how you would cope in the event of “disaster” then have a look at my website and give me a call or email.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Visions of Britain 20202023-12-01T12:51:25+00:00

Business News Updates 27th April 2011

There has been a flurry of banking news of late, much of it will not alter the general mood of a nation that is still pretty fed up with them. However Bank stocks often form a reasonable part of the main FTSE100 index (or the equivalent on a global basis). Barclays have announced a Q1 decline in profits when compared against 2010. They recorded a 9% fall in profit, predominantly due to declines in corporate and investment banking which fell by 29% to £983m. This must imply that the other sectors (which include retail banking to punters like you and I) made a profit increase of 11% and indeed the figures reveal retail and business banking pre-tax profit was up 21% to £692m. Swiss Bankers UBS also announced a reduced level of profit – down 18% on their 2010 Q1 figures, mind you it is still a fairly hefty £1.2bn of profit for 3 months.
Marketeers will be familiar with the term “Cash Cow” – well there really is a lot of money to be made in the milk business in Europe. There can be fierce rivalry between farmers, something often observed by those that live in the countryside (or who grew up there – as I did). Rivalry took on new scale as the French dairy firm Groupe Lactalis launched a £3bn takeover bid for Italian food group Parmalat (they already own 29% of Parmalat as it is). How this will impact food prices in the region remains to be seen. The French company collect nearly 10bn litres of milk and have a turnover of 9.4bn Euros. Plenty of va-va-voom in les vaches!
Cash cows are probably a thing of the past in the automotive industry, but Ford have managed to deliver their strongest Q1 figures for 13 years, achieving profit of £1.54bn. Ford have warned about getting carried away with this good news (if you are a Ford shareholder or employee) as like many car manufacturers, many parts within a car are made in Japan, as a result supply problems are obviously an issue at the moment. As a guide, Toyota’s Japanese production fell a massive 63% in March compared to March 2010. Even if 99% of a car is made elsewhere, the Tsunami and earthquake in Japan is having a growing economic ripple effect. One is left wondering if outsourcing really is such a good idea.

As we are thinking of Japan, another successful exporter has had problems. Nintendo have revealed reduced annual profits at £570m due to a fall in sales and strong Yen. This is a fall of 66% over the same period. Compare this against the mighty Apple, who have announced their Q1 figures at net profits of £3.6bn, more than they expected due to the continuing rise and rise of the iPhone, if you are techy enough listen to the release here. This is largely without any sales from the new iPad 2 which judging by the queues at various shopping centres will merely add more to the success that Apple enjoy.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Business News Updates 27th April 20112023-12-01T12:51:25+00:00

Widow Seeks White Knight

The Times has reported that Lloyds are preparing to offload Scottish Widows as a part of the review of the business by António Horta-Osório the Portuguese born head of Lloyds Bank – who took over at the start of March 2011 having previously headed up (CEO) Spanish Bank Santander here in the UK. Scottish Widows may be somewhat relieved at this, being able to wriggle free of the clutches of the Bank with whom they have had close relations since March 2000. The Lloyds HBOS amalgamation in 2009, has not really helped to add credibility to its brand.
So if you have Scottish Widows products (which includes Clerical Medical ones) prepare yourself for a bombardment of paper over the coming months as potential owners jostle for position to win over the Widows. In my opinion Scottish Widows is one of the best insurance companies around and ought to attract a worthy buyer, who would need a far better brand name (and I cannot think of one) that would warrant dropping the Scottish Widows brand name.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Widow Seeks White Knight2023-12-01T12:51:26+00:00

Banks Caught Out

The Banks have lost today’s High Court ruling into the judicial review of payment protection insurance (PPI). My view is that this is good news for consumers. Many people have got this sort of rip-off insurance (sorry I cannot think of a better term) without even knowing it.
Many people (largely the self-employed) often cannot claim on the cover which is expensive for what you get. All the cover does is to ensure that the lender gets their monthly payment if you cannot work for 2 years – with lots of stings attached. The cost of the cover is very high when compared to the benefit and the better alternative of Income Protection (or Permanent Health Insurance – PHI), sometimes people have PHI provided by their employer so there is no need for additional cover anyway. Some lenders have misled people into believing that the loan/credit is only available if they take out the PPI. In addition, the cost of the PPI has often been added to the debt and incurred additional interest, thereby inflating the cost of the debt or loan. This is plainly unethical. I am at a loss to understand why it took the FSA quite so long to deal with this issue properly. I am sorry to say that this is yet another example of commission based selling leading to the detriment of the consumer and the further tarnishing of the entire financial services industry.
Whilst I do not advocate or promote a culture of complaint, clearly when something is wrong it should be put right and the Banks have failed in this regard. Redress is estimated to be around £3bn which is a huge sum of money and of course one that Banks are unenthusiastic about parting with. Regrettably, we all know that all of us will probably ending up with a share of the bill, by way of increased bank charges.
More information can be found at Martin Lewis’ Moneysaving Expert website, (which needs a better design)he has championed this cause for some time and has further details about how to claim, although assuming that today’s ruling stands (which will probably be appealed), Banks will need to contact anyone that they have sold one of these policies to… so give it 6 months and watch out for the bland letter that will possibly be deliberatley mailed during the 2011 Christmas postal period.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Banks Caught Out2023-12-01T12:51:26+00:00

Business News Updates – Small World

Tesco in China
There have been mixed results for UK retailers announced in the past few days. Supermarket giant Tesco announced pre-tax profits of £3.54bn for the 12 months to the end of February, this is an 11.3% increase on the same period for the previous year. Positive results have been accredited to expansion in Asia. There is a short video about Tesco in China here. When you consider all that Tesco now do, this is probably unsettling news for the Home Retail Group who own Argos and Homebase. They reported profits for 2010 of £265.2m which is a reduction of 10% on the previous year.
As if to prove that multinational companies have little observation of national boundaries, Deutsche Telekom and France Telecom have decided to work together on a joint venture to buy telecommunications equipment together. This alliance will save an estimated £1.15bn a year. Staying within the technology arena, Intel have announced record Q1 earnings of $12.8bn. Meanwhile Chinese Huawei, who make telecom equipment that presumably companies like Deutsche Telekom and France Telecom might buy, announced an increase in net profits to £2.23bn for 2010.
JP Morgan Chase announced Q1 net income of $5.6bn, compared to $3.3bn for the same period in 2010. Earnings per share rose to $1.28 from $0.74 (double) for the same period.  Goldman Sachs 2010 results saw its net revenue reduce from $45.173bn to $39.161bn to the end of 2010, earnings per share reduced from $22.13 to $13.18.
So some Bankers are doing better than others… but the message to take home is that those firms doing business in Asia are seeing fruit.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Business News Updates – Small World2023-12-01T12:51:27+00:00

University Challenge – the price of a Degree

Something like 75% of Universities have now announced their tuition fees for Degree courses starting in 2012. You may remember that the Government set a maximum limit of £9,000 expecting this to only apply to some of the more traditional old-school Universities. However, of those declared, the average fee is looking like £8,679 for the year, this is far closer to the upper limit and significantly above the current maximum level of £3,375. So parents and students will be stumping up rather more money.
It remains to be seen how this impacts other elements of student life. I estimate that at present University tends to cost around £9,000 a year, but that includes the course fees, accomodation and living cost. It is possible that the actual cost of a year at University may end up far closer to £18,000 a year
Of course, the devil is in the detail – different courses will have different costs. However, my suggestion is that you allow a minium of £15,000 per year. I will be interested in how costs are decided for a 4 year course, much of which involves unpaid work placements – such as a Degree in Education to become a teacher…. like my daughter..yikes!  
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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University Challenge – the price of a Degree2023-12-01T12:51:28+00:00

The Truth About Global House Prices

The Economist has an interesting interactive tool that plots house prices across the world (well the major economies where homeownership has a market). The tool can be used to show the House-Price Index, Prices in Real Terms (after allowing for inflation), prices against average income, prices against rent and the % change.
The problem with any data is that it invariably relies upon an average – there are regional variances of course and as we all know, with property there is the all important phrase “location, location, location”. Never-the-less this does reveal a poor set of statistics and shows Britain to be more “out of kilter” than the US when it comes to prices against average income. It would appear from the data, that the average house price is now at 2006 levels and that when allowing for inflation, property prices are actually at 2003 levels.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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The Truth About Global House Prices2023-12-01T12:51:28+00:00
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