Planning for your estate to pass to your beneficiaries, reducing inheritance tax

Budget or canary? A Whimsical Reduction

Dominic Thomas
March 2024  •  5 min read

Budget or canary? A Whimsical Reduction

There was another Budget today, my inbox and the media interest will likely pass over the next 48 hours until a ‘howler’ is found in the sums. Unlike politicians, let me extend my neck … this was possibly the last Conservative budget for a while and an attempt to rescue votes that would otherwise slip away. It contained the traditional narrative of putting money back in your own pocket (having taken it) rather than asking you to reach a little deeper for more. Anyway the 98 pages of light reading provide a distraction …

Owners of commercial property will pay less capital gains tax, 4% less or a reduction of 14%, or 28% reducing to 24% for higher and additional rate taxpayers, depending on how you like your spin. Over the last decade we have all witnessed the decline of retailers and shopping centres, the pandemic added to their misery and extended it to the office sector which has gradually spun the dial on remote working whilst watching energy bills soar and staffing levels make the place feel like an episode from The Last of Us.

Employees and the self employed have had national insurance cut by 2%, the tax that doesn’t really build up for your pension, other than in a pay to play sense. This is not applied to employers who do the employing and of course pensioners at State Pension age or above do not pay national insurance but actually receive the State Pension.

Some sense is being finally applied to the Child Benefit system for ‘High Earning Families’ where previously only one person had to earn above £50,000 for the tapering of financial help to begin.  This has been raised to £60,000 and will eventually be applied to household income rather than individuals (it was previously possible for a couple to earn £49,000 each and avoid any reductions). Sadly for most people the reality of juggling childcare and credits, whilst manipulating income is really a gigantic hassle merely  to demonstrate that they qualify to not have to refund money that has already been spent.

Those working in the Public Sector are under constant scrutiny for their productivity by (forgive the Thomas the Tank Engine sounding terms) the National Statistician and Comptroller and Auditor General who assert that “tens of billions” can be saved through higher production and less fraud, better project management and better Government technology. How many tens is unclear, one might say there is a touch of Yes Minister as any tech project the Government designs and procures usually fails to work. The fraud checking might do well to exercise a little more vigor in relation to Pandemic VIP lanes and contracts.

There will be more nurses (well nursing and midwifery places) by 2031. So we should expect delays and pressure on our NHS for another seven years. Similarly, medical schools will be aiming to achieve 15,000 places in the same timeframe.  Student digs around St George’s look set to thrive. Assuming entry to medical school is at 18 at the earliest, this is likely aimed at your bright 11-year-old who has not yet started secondary school. A hard sell to most 11-year-olds from generation alpha. There were about 778,803 live births in the UK in 2013, almost 2% of them are going to be doctors then, a fair chance they will be called Oliver or Amelia.

Now you see why we need the National Statistician who is also suggesting that doctors waste around 13million hours on poor IT.  A BMA study found that only 4% of doctors believe that the IT they use is “completely adequate”.  The Government of efficiency has been in power since 2010 … around the time of the iPhone 4, the pre-fibre days with speeds of up to 100Mbit/s. I imagine the plan to test AI to automate GP letters and discharge summaries will provide ample resource for comedians and there are assurances that it will not be called horayitzgon..

The need for yet another version of an ISA isn’t welcomed by me. It’s a little hallucinogenic, a nod to nostalgia, Blighty and Brexit whilst having its trace in the origins of the PEP (remember them – the Personal Equity Plan) which was originally restricted to UK shares. The new £5,000 UK ISA (in addition to your £20,000 ISA) must be held in UK equities. One for the purists, but also the mathematicians who will be able to encompass allocation to the UK of £5,000 within a portfolio, but making ‘models’ a challenge. Expect another acronym perhaps £UKISA?.

There will also be a British Bond (I’m not sure how that differs from any other one created by the UK Government) but anyhow a 3-year Bond will soon be making its way over the horizon, available from April at a Post Office near you, just don’t mention the subpostmasters.

Your petrol, beer and wine aren’t changing, though your consumption may.  Actually, strictly speaking the tax rate isn’t changing, I suspect the price already has since this morning. The Chancellor believes that inflation will reduce, so expect interest rates to do the same.

The threshold for small businesses registering and collecting VAT for HMRC will increase from £85,000 of revenue to £90,000. One for the builders who have a different company name for every room of your house-build to navigate with a little more ease.

In the 98 pages I can find no change to the annual allowance for pensions or the main ISA, LISA, JISA. Let’s hope this is not an error, if it is we now know that Fujitsu can ‘remote in’ to make some changes. There is no change to the capital gains tax allowance which reduces to £3,000 on 06/04/24. There is no change to the personal allowance, income tax thresholds or tax rates … which is as expected, but of course means a reduction in tax allowances when measured against inflation or a tax increase depending on your flavour of politics. There is a change for inheritance tax, but only if you have married someone from outside the UK and it doesn’t apply until 2025.

There is a continued attempt to entice businesses to money launder – I mean list in London – with not a hint of tropical offshore waters with a scheme called PISCES (that’s Private Intermittent Securities and Capital Exchange System to you and I). Having also witnessed the decline in pension funds owning UK shares (some vote a while back about cheese and wine) by 6%, the Government continue to attempt to ‘buck the market’ (something no Thatcherite would ever do) by forcing pensions to hold an allocation in UK companies. Discussions with the FCA and Pensions Regulator are due to begin in the Spring (note the daffodils are already out). This is possibly to be combined with a ‘Value For Money’ pensions framework … something that all three bodies have, in theory, been overseeing already.  Anyway … it would be remiss of me to fail to point out that it has been Government policy to reduce the Annual Allowance, introduce the tapered annual allowance, reduce the Lifetime Allowance, introduce the Money Purchase Annual Allowance  and imposed HMRC calculations for all – aimed in fact to deliberately reduce the value of pensions since 2010 (at the time, the Lifetime Allowance was £1.8m, the annual allowance was capped at £255,000).

Above all, the Chancellor reaffirmed belief in owning property, particularly in Surrey, which is to become a fiefdom under the level 2 devolution agreement. This despite local councils being unable to balance their own books, or perhaps because of it?

Carry on.

References:

Budget or canary? A Whimsical Reduction2024-03-07T16:44:39+00:00

Death of inheritance tax?

Dominic Thomas
Oct 2023  •  3 min read

Death of inheritance tax?

There are a number of elections around the world – the pontifications, point-scoring, own goals and blotted copybooks are all about to garner increased scrutiny. Whispers of good news into ears in attempts to win over voters. The next UK election has to be held by 28th January 2025 and we all tend to suspect that the current bunch will continue to attempt to restore a modicum of decency and sound policy before announcing one.

The rumours of the death of inheritance tax appear to have gained some traction, this is of course all largely leaked hearsay, or in other words think tank testing popular opinion. The conundrum of taxes is simply that we all know that they are needed, but few of us can see that the money is used wisely. Some of our fellow humans seem to enjoy paying tax, able to clearly see the collective value in how, what and why it is deployed. Here in the UK, we may get a standardised pie chart of where it went, but the numbers are invariably so vast that they have very little connection with us.

Inheritance tax is one of the most loathed taxes. This is probably because most of us (the middle classes) have earned income, which has already been taxed. Savings or investments, entrepreneurial or retail have had taxes applied, albeit with some allowances granted. IHT is a bit like being given a tax bill again, once you have done all the sensible things and have something left to leave your family or beneficiaries.

A tax rate of 40% also seems fairly high (by tax rate standards) much higher than capital gains taxes and higher than most people pay as income tax. It was seven Chancellors ago when a certain George Osborne who last messed around with IHT, adding an allowance for those who had a home and children to inherit it. The Main Residence Relief was ushered into existence from 6th April 2017, now granting an extra £175,000 of exemption (in addition to the £325,000 nil rate band that everyone gets). It would be too easy to have simply increased the latter to £500,000, instead, this is the making of the Humphrey Appleby’s where what you appear to have can be withdrawn in the wrong or right circumstances, depending how you count and what you count.

So the latest whispers of the abolition of inheritance tax, garner a keen ear and of course the intention is that those convert into votes. Taxes as bribes? It was ever thus. IHT has been raising substantial sums for HMRC over the years and each year the sums tend to increase. The latest data April to August 2023 showed IHT receipts of £3.2bn, up £0.3bn. In the tax year ending 2022-23 £7.1bn of the total £786.69bn HMRC received from all sources. I make that about 1% in round numbers.

Combined with this potential good news is a classic ‘Humphreyism’ in that the current inheritance tax exemption on pension funds may be … well, challenged. There already are possible taxes, depending on how conveniently you can arrange your death before age 75 or how the money is taken. However, this appears to be within the range of the ministry of misinformation and may well be that classic case of rearranging the deckchairs on the Titanic.

We will keep you posted with facts as they arise, assuming they are clearly disclosed by Humphrey and his chums.

For the record:

Osborne, Hammond, Javid, Sunak, Zahawi, Kwarteng, Hunt.

Death of inheritance tax?2023-12-04T12:14:36+00:00

GIVING AND INHERITANCE TAX 2021/22

TODAY’S BLOG

GIVING AND INHERITANCE TAX

Part of your tax year end planning may involve making some gifts that help reduce the value of your estate with the knock-on effect of reducing inheritance tax (hopefully a long time in the future though… right?!).

Anyway, the uncertainty that Capital Gains Tax faced last year was mirrored by IHT (inheritance tax). That too had been subject to a review by the OTS (Office of Tax Simplification … yes it does sound like something from a Peter Sellers sketch) commissioned in January 2018, which had seemingly got lost in the Chancellor’s in-tray. Thankfully, after nearly four years, the end of November 2021 saw a statement confirming that there would be only one administrative change to IHT (first announced in March 2021), easing the paperwork burden for many executors. IHT year end planning is, thus, also business as usual, meaning that you should consider using the three main IHT annual exemptions:

THE ANNUAL EXEMPTION

Each tax year you can give away £3,000 free of IHT. If you did not use all the exemption in 2020/21, you can carry forward the unused element to this year (and no further), but it can only be used after you have used the current tax year’s exemption. For example, if you made no gifts in 2020/21, and you gift £4,000 in 2021/22, you will be treated as having used your full 2021/22 exemption and £1,000 from the previous tax year.

THE SMALL GIFTS EXEMPTION

You can give up to £250 outright per tax year free of IHT to as many people as you wish, so long as they do not receive any part of the £3,000 exemption.

THE NORMAL EXPENDITURE EXEMPTION

The normal expenditure exemption is potentially the most valuable of the yearly IHT exemptions and one which the OTS wanted to replace. Under the exemption, any gift – regardless of size – escapes IHT provided that:

  • you make it regularly;
  • it is made from your income (including ISA income, but excluding investment bond and other capital withdrawals); and
  • the sum gifted does not reduce your standard of living.

This last exemption is not easy to prove. It would help your Executors and therefore your beneficiaries if you follow our guidance and requests to update your income and spending each year. Honestly, we don’t do these things to simply get you to complete forms – there is a logic and it’s all for your benefit (we do appreciate that it is a pain!). You can do this using our spending plan or simply update the information on the portal. If I have worked on your plan recently, the figures there also need to be checked. Basically we need to evidence your spending – or rather your executors will.

ANNUAL IHT GIVING

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The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

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GIVING AND INHERITANCE TAX 2021/222023-12-01T12:12:54+00:00

TAXING YOUR HOME

TODAY’S BLOG

TAXING YOUR HOME

Most people believe that inheritance tax is one of the most unfair taxes. I understand the frustration, but for me its way down the list. Inheritance tax is not a tax you are likely to pay unless you have received a significant sum from a relative.

For me, Stamp duty is one of the most regressive taxes. Often overlooked by house buyers and almost always forgotten about by those that hold property portfolios. It’s a tax on getting on, staying on or moving along the property ladder. Literally nothing of significance done by a government employee and nothing at all done by HMRC or the Government.

OK, sure we need to take taxes somehow to fund a decent, functional society, but I have little comprehension of the obsession in taxing someone’s home, unless of course you believe that we are all really serfs working for our masters and that land taxes keep us all firmly in our places, outside the walls of landed estates.  Of course if you were properly rich, your home would belong to a Trust – silly you.

Anyway, as predicted, the Stamp Duty holiday has led to a significant fall in the number of people paying this tax over the last quarter, according to the latest HMRC figures. HMRC figures shows the number of property transactions subject to stamp duty land tax (SDLT) were 10% lower in Q4 2021, when compared to the previous three months (Q3 2021). These transactions were also 13% lower than Q4 2020.  This SDLT holiday was phased out between 30 June and 30 September last year. HMRC says this caused a substantial rise in the number of transactions being completed earlier in the year, with home buyers keen to avoid paying additional stamp tax charges. Since this tax break started to be phased out, HMRC says there has been a fall in transaction over the last two quarters. Residential property transaction in Q4 2021 were 12% lower than Q3 in 2021 and 15% lower than in Q4 2020. Over the same period non-residential property transactions were 10% higher than both Q3 2021 and Q4 2020.

AS SAFE AS HOUSES – THE SURE THING?

And guess what…. As predicted (or more accurately, as repeated from history) house prices rose to record highs. The average price of a home rose by 9.7% compared with a year earlier, gaining £24,500 to £276,759. However, monthly growth rose by 0.3%, down from 1.1% in December and the smallest monthly rate of increase since June 2021.

Many commentators expect the housing market to cool “considerably” this year as Britons are confronted by a cost-of-living squeeze. The Bank of England raised interest rates to 0.5% to curb inflation that it expects to rise above 7% in April. It forecast that rising energy costs and goods prices would lead to a 2% drop in people’s net income after inflation this year — the biggest hit to real incomes since comparable records began in 1990. About 22 million households will have to pay 54% more for their electricity and gas supplies from April 1, when the energy price cap rises to around £2,000. The Bank also predicted that growth in Britain’s GDP would slow. However, while commentators believe house price growth will cool this year, they did not expect prices to fall significantly.

Unplanned savings built up during the pandemic will go some way to offsetting the income squeeze. And with around 80% of UK mortgage debt at fixed rates, most mortgage-holders are well insulated from short-term increases. Furthermore, more stringent affordability criteria and mortgage regulation introduced during the 2010s means that recent buyers should be better placed to cope with higher mortgage rates than in the past.

Nobody sane thinks property is worth the prices being charged. I don’t do predictions and I don’t bet. You have been warned though (so take comfort that I am nearly always wrong about property prices).

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

TAXING YOUR HOME2023-12-01T12:12:55+00:00

INHERITANCE TAX IS EASY MONEY FOR HMRC

TODAY’S BLOG

INHERITANCE TAX IS EASY MONEY FOR HMRC

Few weekends go by without one of the main newspapers doing a story on inheritance tax. I imagine that is because inheritance tax is often cited as the most loathed tax. The general view being that Government gets taxes whilst you are alive and the final indignity is to take more upon death. A 2015 YouGov report indicated its unpopularity.

If you have been reading any of my blogs over the years, you will know that I am rather sceptical of surveys and their results being understood to represent an entire population. The survey in question had a sample size of 1,975 adults. Not enormous out of a population of 66million. There are all sorts of problems with sampling data – but I digress, it is from my anecdotal experience of 3 decades, unpopular.

In March, the Office for Budget Responsibility (OBR) projected 15% growth in inheritance tax (IHT) receipts from £5.2bn in 2020/21 to £6bn for 2021/22. They projected this sum to rise to £7.1bn in IHT receipts in 2024/25, after allowing for indexation of the bands which had been due to start in April 2021.

Frozen IHT

FROZEN – LET IT GO?

As you know, (page 12 of our client magazine Spotlight) the Chancellor elected to freeze all allowances in the last Budget. At the time, due in part to lower house prices the reprojection was £1bn less by 2024/25. However, it is clear that house prices have continued to defy logic by rising.  If the rise in IHT receipts continue at the same rate as that experienced over April, May and June this year the 2021 total yield will likely exceed £6bn, rather more than anticipated (easy money eh?).

It’s always surprising that only around 25,000 estates bear IHT each year, but this year it could exceed 30,000. The nil rate bands (£325,0000) frozen until the end of 2025/26, then, unless values fall materially, this trajectory will continue.

And while on the subject of IHT, let’s not forget:

  • There are two Office of Tax Simplification (OTS) reports on IHT reform that have, substantially, not been acted upon by the Government
  • There have been a number of calls for wider reform of IHT from the likes of the All-Party Parliamentary Group for Inheritance and Intergenerational Fairness.
  • A 2015 YouGov report found that IHT was the most disliked of all the personal taxes

If you are married (or are a widow/er), own your own home and have children, your nil rate band may well be £1m. However, if your estate is too large the additional main residence relief is reduced potentially to nothing.

If you are single and have no children, HMRC treat you as worthy of no favours, you have the standard nil rate band of £325,000 and no more.

SOLUTIONS? CLICK HERE!

Of course! there are solutions that may be helpful to you – so get in touch.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

INHERITANCE TAX IS EASY MONEY FOR HMRC2023-12-01T12:12:57+00:00

HOT PROPERTY OR COOLING DOWN?

TODAY’S BLOG

HOT PROPERTY OR COOLING DOWN?

UK house price growth has dropped to its slowest pace in four months, new data shows, as the temporary stamp duty holiday ended a boom in the property market. Halifax said on Friday that annual house price growth in the UK slowed to 7.6% in July, down from 8.7% in June. July’s reading was the lowest since March. The slowdown came as a tax break on property transactions came to an end. The chancellor announced a stamp duty holiday in July 2020 that ended in June.

You will be perfectly aware that property prices and location make little sense. It is still perplexing to see the prices that people will pay for a home and what we all think our pile of bricks is worth. So when reading data about property prices, take with a pinch of salt as the variance in “rising prices” is considerable not simply across the country, but within a local London borough.

It is also evident that the property “crisis” is not going to end soon and the only way most people in their twenties in southern England can afford a home is if a relative leaves them funds.

I thought you might find the tables below (sorry I have not mastered posting excel tables here) of some interest. These are places our clients live or have some connection or visit and so on. You can play “spot where Waitrose might be”. The average values information is from Zoopla today. The larger cities and towns are likely disadvantaged by the number of housing which is more likely to push down the average value. However you are all quite able to realise this for yourselves and will more likely remark at the vast differences in general across the country from Ascot to York.

Hot property cooling?
LOCATION £ AVERAGE VALUE
ASCOT 875,236
ASHTEAD 751,310
BANSTEAD 622,391
BASSINGHAM 328,043
BATH 530,846
BIRMINGHAM 218,932
BRADFORD 139,989
BRADFORD ON AVON 468,886
BRIGHTON 445,631
BRISTOL 358,092
BROADWAY 539,513
BURY ST EDMUNDS 345,814
CAMBRIDGE 483,235
CARDIFF 271,241
CATERHAM 542,720
CHELSEA 1,968,682
CHELTENHAM 400,586
CLAPHAM 760,086
CLAYGATE 914,061
CLIFTON, BRISTOL 609,016
COBHAM 1,197,138
COTTINGHAM 248,156
CRANLEIGH 617,406
DERBY 223,218
DORKING 616,990
DURHAM 174,841
EDINBURGH 322,309
EMSWORTH 445,595
EPSOM 564,334
ESHER 1,098,649
EXETER 323,170
GLASGOW 208,828
GUILDFORD 613,276
HEATHFIELD 459,222
HENLEY ON THAMES 876,576
HOPE VALLEY, DERBYSHIRE 400,743
HORSHAM 458,448
HULL 147,731
ISLE OF WIGHT 286,722
KENSINGTON 1,871,568
KESWICK, CUMBRIA 374,254
KINGSTON UPON THAMES 623,538
KNIGHTSBRIDGE 2,887,395
LEATHERHEAD 824,727
LEEDS 237,970
LEICESTER 257,473
LIVERPOOL 189,644
LUDLOW 312,723
MANCHESTER 209,830
LOCATION £ AVERAGE VALUE
MARLOW 725,186
MAYFAIR 2,335,280
NEW MALDEN 640,941
NORWICH 298,797
NOTTINGHAM 231,554
OXFORD 515,613
OXSHOTT 1,988,799
PUTNEY 783,076
REIGATE 650,073
RICHMOND ON THAMES 913,139
RIPLEY (SURREY) 641,346
SALCOMBE 762,901
SALISBURY 394,427
SHREWSBURY 281,540
ST ALBANS 608,263
SURBITON 604,492
SWANSEA 198,269
TELFORD 191,829
TRURO 376,079
UCKFIELD 484,426
WEST EALING 675,034
WEST WITTERING 666,953
WEYBRIDGE 945,264
WIMBLEDON VILLAGE 1,512,663
WINCHESTER 576,821
WINDSOR 637,604
YORK 322,059

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

HOT PROPERTY OR COOLING DOWN?2023-12-01T12:13:04+00:00

INHERITANCE – THE KNIVES ARE OUT

TODAY’S BLOG

INHERITANCE – DISPUTES AT ALL TIME HIGH

Perhaps you have heard the saying “Where there’s a Will there’s a crowd” the idea being that when money is on the table, people gather. Of course, there may be very good legitimate reasons for doing so – perhaps during lockdown you have watched “Knives Out” a comedic story about family dysfunction and the quest to understand what happened.

Whilst I am not suggesting murder is on the cards for most families, though I imagine that lockdown has provided more moments of stress, clearly one of the current terms of the hour is “entitled”. To my mind such a word is particularly relevant here. The Ministry of Justice published figures showing a record 188 cases went to the High Court in 2019, by individuals claiming to be entitled to a share or larger share of a deceased’s estate.

KNIVES OUT

EVERYONE HAS A STORY

There are a variety of reasons for this of course, behind each is at least one story (much like the film). Family structures are certainly more complex, with multiple marriages, children from different relationships and so on. Whilst this is obviously more commonplace since divorce law evolved from 1857, 1937, 1969 (Divorce Reform Act) and 1973 (Matrimonial Causes Act), the context is nothing new as many of Shakespeare’s play will attest.

“BETTER THREE HOURS TOO SOON THAN A MINUTE TOO LATE”

The motivation may be more encouraged by the sums involved which has made the prospect of costly legal representation more appealing. Having your Will properly written is also important. Those making “last minute” homemade Wills are more obviously subject to challenge, being invariably poorly prepared and badly thought through. I don’t think anyone likes preparing their Will, it’s a fairly morbid task, but there is a huge sense of peace of mind once you have done so properly. It is part of what our Ten Minute Challenge has been leading towards – getting the difficult, uncomfortable and perhaps “boring” stuff done. There may be many gifts you wish to leave your loved ones upon your demise, but I can assure you that clarity is one of the best.

So – if your Will has not been reviewed since 2015 when the rules about property changed, now is the time to do so. We can put you in touch with a specialist. Please attempt our 10 Minute Challenge, it could be the most helpful set of final documents you provide.

As for the film, staring Daniel Craig, Ana de Armas, Chris Evans, Don Johnson, Jamie Lee Curtis, Michael Shannon, Toni Collette and Christopher Plummer (a cast to die for!) well, its available on all the usual platforms, here is the trailer.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

INHERITANCE – THE KNIVES ARE OUT2023-12-01T12:13:15+00:00

TAX YEAR END PLANNING PART 3

TODAY’S BLOG

TAX YEAR END PLANNING PART 3 – IHT

Inheritance Tax is one of the most unpopular taxes, yet it is a tax that you will not pay – your estate might. There are various solutions to reducing or avoiding inheritance tax – talk to me if you want to know more about them. However, each tax year you get some basic allowances that you can use to pass on wealth without any inheritance tax.

  • ANNUAL EXEMPTION

Each tax year you can give away £3,000 free of IHT. If you do not use all of the exemption in one year, you can carry forward the unused element, but only to the following tax year, when it can only be used after that year’s exemption has been exhausted.

  • SMALL GIFTS EXEMPTION

You can give up to £250 outright per tax year free of IHT to as many people as you wish, so long as they do not receive any part of the £3,000 exemption.

  • NORMAL EXPENDITURE EXEMPTION

The normal expenditure exemption is potentially the most valuable of the yearly IHT exemptions and the one most likely to be reformed. Currently, any gift is exempt from IHT provided that:

    • you make it regularly;
    • it is made out of income (including ISA income); and
    • it does not reduce your standard of living.

One way to combine the use of your CGT annual exemption with IHT planning could be to make an outright lifetime gift of investments. Such gifts would count as a disposal for CGT purposes and a potentially exempt transfer for IHT. The recipients of the gifts would start with a base cost for the investment equal to the gift’s value and there would be no IHT to pay at any time, provided you survived for the following seven years (possibly reduced to five under OTS proposals).

ANNUAL GIVING

ISAs – INDIVIDUAL SAVINGS ACCOUNTS

There are five important tax benefits which are common across the different types of ISA:

·         Interest earned on cash or fixed interest securities is free of UK income tax.

·         Dividends are free of UK income tax.

·         Capital gains are free of UK CGT.

·         There is nothing to report on your tax return.

·         On death, the income tax and CGT benefits of your ISAs can effectively be transferred to a surviving spouse or civil partner.

The overall maximum that can be invested in all ISAs in 2019/20 is generally £20,000 (£4,368 for Junior ISAs). There are no carry forward provisions, so like the CGT annual exemption it is a case of use it or lose it.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

TAX YEAR END PLANNING PART 32023-12-01T12:13:23+00:00

FUNERAL COSTS RISE

TODAY’S BLOG

FUNERAL COSTS RISE

I get the pleasure of talking and writing about all manner of morbid events, however the one I try to avoid is this one. The price of a funeral. It seems so utterly morbid. Yet it is my job to draw these sort of things to your attention, so here is something to think about.

The cost of dying has reached record highs of almost £10,000, fuelled by an increase in elaborate send-offs. Disney-themed funerals where everyone dresses up as their favourite character, all-pink wedding-style ceremonies in a rejection of the traditional black, and a motor-cycle and sidecar in place of a hearse, are just some of the ways that families today are commemorating the lives of lost loved ones. It means funeral costs are now higher than they have ever been, having increased year on year for more than a decade.

When somone dies, it is the case that the cost of the funeral can be offset against the value of the estate, so that’s helpful in reducing the value of the estate and therefore the tax liability (if there is one). However its still money that leaves the estate. Importantly, if there is a surviving spouse, such a cost can be very unhelpful indeed.

It is possible to take our insurance (but if you do, please do so with care) the alternative is to simply ensure that there are sufficient funds set aside. Talk to me about this if it is of concern.

funeral

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

FUNERAL COSTS RISE2023-12-01T12:13:24+00:00

WHERE THERE’S A WILL, THERE’S A CROWD…

TODAY’S BLOG

WHERE THERE’S A WILL, THERE’S A CROWD…

Making a Will is a vital and basic part of financial planning. However, you need to think carefully about who you select to be the Executor (the person responsible for ensuring the Will is properly implemented). Sadly, Anita Border’s choice of her neighbour wasn’t a good choice.

Anita died in 2015 and her Will names two beneficiaries.  However neither of these received a penny as the nominated Executor, one Mrs David Loveday used the proceeds of the estate to buy himself a new car, some holidays and settle some of his debts. The Court case T20190613 at Woolwich Crown Court saw Mr Loveday plead guilty to fraud by failing to transfer funds to Mrs Gibbs, one of the beneficiaries. Whilst sentencing will happen in November, Judge David Miller has stated that it is likely that Mr Loveday will serve time in prison.

THREE’S COMPANY

Thankfully you do not have to appoint a random neighbour to be an Executor, you can select anyone you wish. I always suggest having three to ensure a majority decision can be taken should the need arise. I am also pleased to report that Alexandra Truesdale has written a piece on this very subject for our latest Spotlight magazine, which should be with you very shortly, if not already.

Constructing a Will can be complicated due to complex families. It can also be straight-forward for, you guessed it, straight-forward ones. Understanding what is important and what is essential is the skill of a solicitor and not something that you should ever leave to chance or a knock off do-it-yourself Will.

Check Spotlight October 2019 for more information. Alex can be found here.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

WHERE THERE’S A WILL, THERE’S A CROWD…2023-12-01T12:17:10+00:00
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