Would you leave the country if there was a 95% tax?

Dominic Thomas
March 2026 • 2 min read

Would You Leave the Country if there was a 95% tax?

I was at an investment conference the other week and a well-known speaker asked the audience of financial advisers to raise a hand if they would leave the country if there was a 95% tax. A lot of hands went up. So presumably, many of them would. Good news for me, an audience that easily self-identifies.

A thoughtful adviser might have paused to wonder, “95% of what?” a better adviser may have thought “at what level of income or assets would the 95% tax rate apply?” an even better adviser may have wondered what was being exchanged or traded for the 95% tax? surely each person should have thought, “leave the UK for where?”. All this really reveals is our biases and inability to think critically – something that I believe is important when helping you plan your future.

Today we live in a knee-jerk-response-driven culture. It’s been brewing for years, from poorly framed questions at sports finals like “how do you feel?” to makeover shows with a big reveal. Reaction is the stimulant and is being increasingly weaponised. Pose a question to a MAGA supporter and watch them implode.

I saw a headline recently that effectively said the King was pocketing millions from unclaimed estates. Naturally, the headline was designed to prompt a reaction.

To clarify – if you die without a Will and with no obvious family to benefit, your estate tax will be effectively 100% (as it all goes to HMRC). That’s right a tax bill of 100%. At least, that’s the way I imagine it would be posed.

Technically what happens to an unclaimed estate is that it reverts to ‘the Crown’ after 30 years of remaining unclaimed. This has an appropriate Latin term – bona vacantia, which has nothing to do with U2 going on holiday but means “ownerless assets”.

Naturally there is a Government department that manages the process of Bona Vacantia … creatively named the Bona Vacantia Department or BVD.

According to the BVD, there are currently (January 2026) around 5,500 unclaimed estates, nearly a third of them in London and Surrey. You would imagine therefore that the estate of anyone who died prior to 1996 would now have reverted to the Crown, in fact there are a few (currently just 18) that remain on “the list”. The current oldest being the estate of William Baker of Eastbourne, Sussex, who died in June 1974. There are 188 estates that in theory are due to revert to the Crown this year (deaths in 1996).

The BVD handle around 30,000 company and estate cases each year, with a further 60,000 or so low value estates handled digitally. This all generates income for the Treasury (about £71m in 2025).

“The List” which is regularly updated can be found online at the BVD, here is the link for you to check if there is an estate that you may be connected to:

https://www.gov.uk/government/statistical-data-sets/unclaimed-estates-list

There was around £4m in 2024/25 of payments to entitled kin.

BACK TO ALL BLOGS

Would you leave the country if there was a 95% tax?Jemima Thomas2026-03-09T09:10:38+00:00

Are you building a bridge to your future?

Dominic Thomas
Jan 2026 • 2 min read

Are you building a bridge to your future?

Financial planning straddles the past, present and future. Here at Solomon’s, we like to start with the end in mind, the second habit of “highly effective people”. We need to know what you are aiming for and where you are now. It’s helpful, significantly so, to also know enough about the history that has lead to where you are presently.

One of the many problems with great financial planning is that it requires time and therefore patience. A combination that is not something that is easy to master and arguably the antithesis of our current cultural impulses; it’s also problematic because you only get the long-term once.

Compounding investment returns is a crucial part of your plan, in practice we are not magicians and really have three main ‘dials’ to operate – spending, contributing and time. So I wonder if you would consider the example of an actual bridge – the one that you have probably known about since early childhood nursery rhymes and probably crossed more than once … London Bridge. Construction of the first stone bridge started in 1176 and took around 33 years to complete; at the time it was the sole bridge across the Thames.

For hundreds of years, London Bridge was the only crossing of the River Thames. It had a total monopoly.

If you wanted to cross the bridge to get to the City, you paid a fee
If you wanted to sail under the bridge, you paid a fee
If you wanted to fish off the bridge (ill-advised in the Thames most of the time!), you paid a fee
If you owned one of the 140 shops/houses on the bridge, you paid a fee

Since opening in 1209, those payments have been accumulating and administered by Bridge House Estates (now called City Bridge Foundation). To give a sense of scale, the 816 years of being open for business until 2025 is obviously a very long time indeed.

To give you a sense of what compounding can do, if you’d invested the princely sum of £100 in 1209 and made a 3% return every year for the last 816 years, you’d have £2,986,588,300,073 today.

Today, now a charity doing all sorts of work and also the owner of Blackfriars Bridge (1769), Southwark Bridge (1819), Tower Bridge (1894) and the most recent Millennium Bridge (2000), the Foundation has annual income of over £42m a year, of which around £10m is from admissions and visits. The latest accounts report assets worth over £1.6bn. This gives rather a lot of meaning to terms like “spanning the generations” and is some serious legacy planning! Imagine the wealth of history that the bridge has witnessed – albeit rebuilt several times.

References:

Report and Accounts: https://www.citybridgefoundation.org.uk/about/governance/annual-reviews-and-reports

Charity: https://register-of-charities.charitycommission.gov.uk/en/charity-search/-/charity-details/1035628/assets-and-liabilities?_uk_gov_ccew_onereg_charitydetails_web_portlet_CharityDetailsPortlet_organisationNumber=1035628

BACK TO ALL BLOGS

Are you building a bridge to your future?Jemima Thomas2026-03-24T16:26:11+00:00

Tracker/Index funds

Sam Harris
May 2025 • 2 min read

Tracker/Index funds

You may have heard the terms ‘Tracker’ and ‘Index’ thrown around when we talk about investments or your portfolio, but what do these terms mean and what are the key features?

Simply put, a tracker portfolio aims to mimic the performance of global markets. This is typically done through index funds. An index in the context of stock markets is essentially just a list of companies. Though, there are often certain criteria a company must satisfy in order to be included, such as market capitalisation (the value of the company).

I’m sure you’re already familiar with well-known indices such as the FTSE 100, which is an index made up of the 100 largest British publicly traded companies. Or even the S&P 500 which is comprised of the 500 largest American companies. These funds ‘track’ the UK stock market and the American stock markets respectively.

Index tracking funds come with the added benefit of generally being less expensive than most alternatives. This is due to the passive nature of this type of investment, these funds are simply trying to replicate an index so most of the hard work has already been done by another organisation. For example, Vanguard might offer an equity fund which tracks the FTSE 100 index, however the index itself is calculated and maintained by FTSE Russell.

The Tracker portfolios we use at Solomon’s are prime examples of utilising index funds to ensure investments are well diversified. Meaning, that the markets which are performing well help mitigate losses from markets which are struggling. Conversely, this could also be seen as underperforming markets eating into the gains of strong markets. Though ultimately, diversification is a strategy used to reduce risk, rather than to increase returns. The aim is not to beat the global markets, but rather to match them.

BACK TO ALL BLOGS

Tracker/Index fundsJemima Thomas2025-05-27T10:47:03+01:00

The horrors of Black Friday

Dominic Thomas
Dec 2023 • 2 min read

The horrors of Black Friday

I wonder if your email, social media and text messages have been filled with offers about Black Friday and Cyber Monday? The palpable sense of missing out on a deal that will save you 10%, 20%, 30% or even 80% over a 24-hour period that sometimes extends to several days or even weeks in the run up to Commercialistmas.

This is the type of capitalism that we can all relate to, a discount on something… and gosh can’t that discount be rather large. Black Friday is brilliant for those that are focused and have planned purchases, perhaps even waiting the better part of 12 months for the announced day of the deal.

WEDNESDAY

In truth Black Friday is the envy of financial advisers, many of them may not even realise why. We have our Black Wednesday, or more accurately, had it on 6^th September 1992… which you may remember a certain Mr Soros managed to collapse the ailing pound resulting in a swift departure from the ERM – Exchange Rate Mechanism.

MONDAY… AND TUESDAY

Before that we had Black Monday 19^th October 1987, which overran into Black Tuesday. No sooner had we all collectively popped our heads above ground following that ‘great’ storm (the one Michael Fish is forever linked with) than the stock exchange had to be closed as commuters could not get to work. When they got to their desks, they soon wished they hadn’t bothered, as markets nosedived around the world. The Dow Jones fell 22.6%, double the FTSE100 fall. This was the largest fall on a single day since 1929 (the Great stock market crash).

Falling prices on the stock market or in the value of the pound invariably send investors into a state of frenzied panic selling. The same discount sends shoppers into a state of frenzied buying. I’m going to push the analogy a bit… I suspect that most of what has been bought on Black Friday or Cyber Monday will not last more than 10 years, probably a lot less than that. Yet investing into global companies of the world will last a lifetime. Sure – some companies will go bust, but invariably merged or acquired by larger rivals; there will be replacements, new entrants and new solutions. The path of progress is relentless, whatever you hear on social media.

I can promise you that there will be a significant market fall at some point, you won’t like it, neither will I. You can attempt to guess when it will be, but your chances of correctly timing it are really alarmingly small. You can choose to weather the storm by ensuring that your planned income and requirements for capital are already in place by having a proper plan. The markets will recover, often very quickly, and at some point you will wonder what the fuss was about and have to google Black Monday to remember the scale.

THURSDAY

The night of the Great Storm – a very youthful Dominic Thomas went to bed in his rented room and didn’t stir all night. He woke to see the garden sculpted by a tree that had been snapped in two; his landlord flabbergasted that he hadn’t stirred all night as the shaking chimney stack threatened to topple into his room.

SOMETHING FOR THE WEEKEND

Perhaps you will spend the weekend pondering your Christmas list and plans, remembering all those purchases last year… but can you? I suspect you can remember “A dog is for life, not just for Christmas”… much like your investments, they are here to serve you for your lifetime and frankly, we prefer to think of them as eternal as they are passed to your future generations. So when the big crash comes, I’m going to remind you to hold your nerve; prices are discounted temporarily; and ask you to consider buying at a massive discount. The next crash is a discount.

BACK TO ALL BLOGS

The horrors of Black FridayJemima Thomas2023-12-01T19:31:07+00:00

ONE FOR THE GARDENERS

TODAY’S BLOG

ONE FOR THE GARDENERS

It has not been easy to find positive aspects of the pandemic, yet I have been fortunate enough to really enjoy working in the garden. I am not an expert, I have generally been handy at knocking stuff down, cutting, chopping and digging, but it took a pandemic to really switch me on to the joy and healing power of gardening and giving it more thought.

One of the surprises has been the short life of many blooms. There was a lot of groundwork, preparation, tending and expectation before the flower finally appeared, only to disappear within a day or a couple of weeks. Thankfully, I planted lots of plants that flower at different times, but the saying “the constant gardener” is very much my experience, different seasons bringing different work from deadheading to mulching.

It occurred to me that there are many lessons from gardening to learn when it comes to investing and indeed running a business. One of the things we attempt to do is equivalent to pruning – we might train some plants along a particular line, some stakes, supports or tied attachments might be needed to get the plant growing in the right direction. Perhaps cutting off some stems, to refocus the plant energy into the direction of the result we seek. We might want to give a plant a little extra care at times, responding to the local weather. That sort of thing.

TENDING YOUR PORTFOLIO

This is similar to rebalancing your portfolio. On a simple level this is taking profits, the discipline of actually buying at the bottom and selling at the top – within a range that makes sense for your planning objectives. There is a sense of tidying up, returning the portfolio to its intended structure, albeit larger and more mature (hopefully). Essentially getting it back on track having been permitted to grow within reason. Left unattended for too long the work becomes more significant and perhaps requiring larger tools and much more energy to do the job.

The problem with rebalancing is that we do need to do this regularly – not every month, perhaps not even every year. There is research about this which concludes that a rebalance adds real value if it’s about every 18-36 months (but not mandated that way). A key issue is the degree of movement away from the original plan – (we call this tolerance). A 10% trigger seems to hold credibility with evidence that this adds value over the long-term.

SEEKING MARGINAL GAINS

I’m conscious though that the process is long-winded. We need to advise you to rebalance or make adjustments, then get your permission and finally implement the changes and check that they have been done correctly. You are busy and probably get fed up saying “yes please do that” each time I ask you to confirm your permission. As a result, we are advising use of a Discretionary Fund Manager (DFM) to implement these changes based on agreed criteria. This means that there won’t be delays in optimising your portfolio, no need for you to agree each minor adjustment.

Normally I am not a fan of a DFM, but this is a fairly unique solution. Its incredibly competitive at 0.09% and takes an evidence-based approach using low-cost funds in a way that matches our own approach and investment philosophy.

Occasionally in gardening some decisions need to be made about what is altered to give the best chance of obtaining the results you seek. At your next review I shall be explaining what pruning, weeding, digging, mulching and reorganisation needs doing for your planning of future harvests

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 [email protected]

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

Email – [email protected]
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY | DATA PROTECTION

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

Email – [email protected] Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY | DATA PROTECTION

ONE FOR THE GARDENERSDominic2025-01-21T15:53:24+00:00

The Fuss About Platforms

Solomons-financial-advisor-wimbledon-blogger

Head Over Heels [81] – the fuss about platforms

You may have come across news in various papers (The Telegraph for example) about some investment platforms being costly and offering inducements to advisers to use them. I couldn’t miss the opportunity of commenting about this.

A platform is basically an online administration service. This enables your investments to be traded, bought, sold and rebalanced. Some enable you to hold all sorts of investments, others are more restricted to mainstream funds. The platform has legal responsibilities in delivering its service and providing statements, contract notes and so on. Every financial adviser that decides to use a platform on which to hold your investments, must justify why it is selected.

Money, Money, Money [76]

Some people will always see price as the first hurdle, if one platform is much like any other. Some charge a fixed fee, most charge a percentage. Most have a sliding scale, so that the more you have “on the platform” you begin to have charges reduced through a tiered charging system. However, this is your money, not a takeout meal. Reliability is crucial.

Ring, Ring..[73]

You can have a platform with rather more “bells and whistles” but invariably, this comes with additional costs. The ability to hold investment property within a pension, shares and so on, all have various additional costs. Some also charge for each type of “wrapper” which is really a charge for a product – a SIPP, Flexible Drawdown Pension, ISA etc.

Naturally these costs all begin to add up and a valid question is really whether you would make use of all the “bells and whistles”. Many will not, but some certainly will. So, selection of a platform ought to suit you more than your adviser. One of the main advantages of any platform is the saved aggravation in attempting to deal with different companies or constructing a portfolio of funds from very different investment groups. I cannot repeat what I think of some providers but let’s just say that they give the impression that they have only just come across a fax machine.

Move On [77]

One of the age-old problems of financial services is inertia. Many will stick with what they know, despite the reality that there are better alternatives. The hassle with all those forms can seem overwhelming. In addition, any adviser that guarantees that moving from A to B will be better, is delusional, the new arrangement may be considerably, better, cheaper, faster etc, but it is not possible to guarantee a better outcome. In the same way that I cannot guarantee that I will rise from my bed tomorrow, I should, but I may not.

The temptation for clients and advisers is to believe the marketing. In addition, advisers may receive helpful bits of kit to enable them to do a better job. This then begins to blindside and erode impartiality.

Knowing Me, Knowing You..[76]

So, what do we do at Solomons? Well we pay for all the tools we use so that we can deliver the service we want. These evolve. This year I have started to use at least 3 new different tools. I’m aware of bias and so we get an independent company to research and assess platforms for us. We do not influence the research or results. We provide details about who we currently use and an overview of the sort of clients and their holdings that we have. We do this once a year.

Most of our clients do not need all the bells and whistles, so we use platforms that suit their requirements. There are lots of unused funds, but that’s not the same thing. If I want to buy a suit I go to a shop that sells suits, I don’t by them all, some would be too small (most) and some too large, wrong style, colour and so on. That does not mean I am paying for the other suits, merely going to somewhere to obtain what I want.

Another Town, Another Train [73]

If there are good reasons to change your platform, we will advise you to do so. There will not be any new costs because we treat this as a part of the annual fees that we charge for your investments on a platform. All the platforms we have selected to date do not apply exit charges, unlike Waterloo [74]. This was done deliberately.

Cheapest is not best. Back to the suit buying… (surely you bright folk get it) price is one element of the purchase. Does it do the job? Well, when it comes to technology, sadly, all too often platforms break, which is more than a minor irritant when attempting to comply with regulations, designed to protect investors, albeit often with utterly daft realities.

The Winner Takes It All [80]

Good platforms are about two things – sustainability and innovation. The price differential between good platforms is nothing like as significant as these two. Is their business model sustainable? Most platforms do not make a profit, which to put it bluntly means that something must change. That’s just The Name of The Game [77]. Those that do not innovate will eventually be left behind, and when your business is essentially a technology solution, that is a bad business plan.

In summary, we do not use platforms because of the tools they provide, or any other incentives. We will move you from one platform to another if there is good reason to do so. All platforms that we have advised, do not apply exit charges. We tend to only use platforms where the bells and whistles come at no extra cost or are not charged if not used. We like innovation but above all, the business model of the platform needs to be robust.

When All is Said and Done [79], we look after our clients for decades, not months or a couple of years, but On and On and On [80]. Decades. So there seems to me to be no point in ripping anyone off. What goes around comes around and all that…. and with the idea of A to B, platforms and things coming around again, its all about money, money, money… so here’s the trailer for Mamma Mia 2.

Dominic Thomas
Solomons IFA

Email me to get in touch

The Fuss About PlatformsDominic2023-12-01T12:17:56+00:00

The UK General Election

Over the long run, the market has provided substantial returns regardless of who lives at Number 10. This is not a piece that I wrote, but it is worth sharing as it makes a very useful point. Think and act long term.

Next month’s snap election is the first national vote in the UK since the EU referendum. While the election’s outcome and overall impact are unknown, there is no shortage of speculation about how the election will impact the stock market. Below, we explain why investors would be well-served avoiding the temptation to make significant changes to a long-term investment plan based upon these sorts of predictions.

Here’s a chart to consider – Growth of £1 invested into the Dimensional UK Market Index between January 1956 – December 2016…. some 60 years, which is rather like investing at 30 and living until 90.

Note smallprint:

For illustrative purposes only. Past performance is not a guarantee of future results. Index is not available for direct investment, therefore, their performance does not reflect the expenses associated with the management of an actual fund. Dimensional indices use CRSP and Compustat data. See “Index Descriptions” in the appendix for descriptions of index data.

In plain English – this is really an example to demonstrate the wisdom of long-term thinking (and investing) rather than the constant short-term anxiety and to be blunt “mucking about”.

Investing is not meant to be gambling

Trying to outguess the market is often a losing game. Current market prices offer an up-to-the-minute snapshot of the aggregate expectations of market participants— including expectations about the outcome and impact of elections. While unanticipated future events (genuine surprises) may trigger price changes in the future, the nature of these events cannot be known by investors today. As a result, it is difficult, if not impossible, to systematically benefit from trying to identify mispriced securities. So it is unlikely that investors can gain an edge by attempting to predict what will happen to the stock market after a general election.

The focus of this election is Britain’s exit from the EU. But, as is often the case, predictions about the outcome and its effect on the stock market focus on which party will be “better for the market” over the long run. Exhibit 1 shows the growth of £ 1 invested in the UK market over more than 60 years and 12 prime ministers (from Anthony Eden to Theresa May).

Markets and 10 Downing Street

This exhibit does not suggest an obvious pattern of long-term stock market performance based upon which party has the majority in the Commons. What it shows is that over the long run, the market has provided substantial returns regardless of who lives at Number 10.

Equity markets can help investors grow their assets, but investing is a long-term endeavour. Trying to make investment decisions based upon the outcome of elections is unlikely to result in reliable excess returns for investors. At best, any positive outcome based on such a strategy will likely result from random luck. At worst, such a strategy can lead to costly mistakes. Accordingly, there is a strong case for investors to rely on patience and portfolio structure, rather than trying to outguess the market, in order to pursue investment returns.

INDEX DESCRIPTIONS

Dimensional UK Market Index: Compiled by Dimensional from Bloomberg securities data. Market capitalisation-weighted index of all securities in the United Kingdom. Exclusions: REITs and investment companies. The index has been retroactively calculated by Dimensional and did not exist prior to April 2008.

Investments involve risks. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Past performance is not a guarantee of future results. There is no guarantee strategies will be successful. The information in this material is provided for background information only. It does not constitute investment advice, recommendation or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision.

Dominic Thomas
Solomons IFA

Email me to get in touch

The UK General ElectionDominic2025-01-23T10:55:22+00:00

Markets are High, the End is Nigh

I have no idea why radio and TV stations broadcast the level of the FTSE with every news bulletin. It’s as though they are screaming “the end is nigh”. Think about it for a moment, what purpose does it serve? The only people that can do anything about their investments are traders – who had the information already. To my mind the only reason I can think of is so that you and I panic. The markets are high, so we panic with the good news fearing that is must be coming to an end. Alternatively, they have fallen, so the anxiety and fear is by how much and how far.

So What?

A better question might be…. So what? How does this affect me at all? Well the truth is that your investments will almost certainly be impacted, but then that’s the point of investing. The issue is really does the rise or fall play any significant part on your financial well-being. This is where proper financial planning comes in. We know that investments fall in value. We allow for it. We also know and believe that the point of investing is so that they rise, otherwise we wouldn’t bother would we!

A picture paints a thousand words

So, I thought that I would share with you an interesting graph. This shows the returns of the FTSE All-Share over the last 30 years from 1986-2016 (31 years). The grey columns show the calendar year returns. You will observe that 22 or the 31 are positive, 9 are negative. In other words, 70% of the time, calendar year returns have been positive. However, when the negative years occur, those years can see large falls, note the worst being -33% in 2008 (the credit crunch, supposedly the worst financial collapse in generations).

Let’s get Negative

Now observe the red dots. These represent the largest fall in each year. All falls must be negative to be a fall. So, every year has one. Note how these are pretty “bad” yet don’t really seem that bad when you consider the actual return over the year (grey column). Its noteworthy that the average fall in a year is -15.8% – the median (if you line up all the results, the one in the middle) is -12.6%. So, in short you should expect a fall every year of around this sort of amount. It should not be a surprise.

You probably remember the crash of October 1987… just after the hurricane that Michael Fish didn’t expect. Remember the headlines of millions wiped off the markets. True, it (the FTSE All Share) fell -37% however over the year it showed a return of +4%. Which do you remember? I’m guessing the crash… which you would certainly remember if you got in a panic and sold your holdings (when they were down)… selling in a panic or a crisis is the surest way to actually have one, but remembering your long-term financial goals and why on earth you are investing anyway is vital. That’s what we and any other decent financial planner will help with, when the crowd and the media and the market are telling you to panic, do something!… do not.

Diversify to Dampen

However, very few people have all their investments in the FTSE All Share or indeed entirely in shares (equities) most will have a portfolio that has some in low risk holdings as well, ideally the portfolio will be globally diversified across nations and asset classes. This will dampen the effects of both the rises and the falls of the markets.

The Only Timing that Matters

Trying to time the best moment to enter or exit the market is impossible to do with any repeatable success. However clearly you and your planner need to mindful (aware) of when you want to withdraw money. It’s all very well a favourable long-term average return, (or even a calendar year one) but what about when it’s a really bad year and you need the money out? Again, the truth is that any decent planner will help assess this advance. In practice it is unlikely that you would need all of your investments at the same time, but it can happen, particularly if you decide to use your entire pension fund to buy an annuity (income for life). This is why we spend a lot of time getting to understand our clients, your goals, values and aspirations – importantly when you need the money, so that that we can plan appropriately, perhaps reducing investment risk or holding more cash than you might need. Context is everything and a plan is vital. So get in touch to ensure that your investments are structured properly – for you, not for the media.

Dominic Thomas
Solomons IFA

Email me to get in touch

Markets are High, the End is NighDominic2025-01-21T15:53:26+00:00

Investing in a Business

One of the ways that Government attempts to create jobs is to encourage and stimulate small businesses, start-ups or recently started businesses. The Prime Minister wants these to scale up, not simply start up. So as a regular investor (which in my world we call a retail investor) there are various ways that you are incentivized to be part of this wealth creation.

Tax effective incentives

Venture Capital Trusts, Enterprise Investment Schemes, Small Enterprise Investment Schemes are all such investment structures designed to encourage you (with tax incentives) to invest into new businesses. Generally, though not always the case, these would be businesses looking for money, to which traditional banks don’t, can’t or won’t lend. Since the credit crunch, despite the Government pouring billions into the system, most lending to small businesses has not increased. Indeed any chart on the topic would suggest that Banks are positively less than helpful.

A Different Approach

As we approach the end of the tax year, various specialist companies will produce offers for these tax efficient investments. The rules for them are fairly complex, primarily because they (the rules) seem to get changed each year. It would certainly be true to say that the degree of investment risk is generally much higher than say investing into most normal investment funds that track an index. As with most things, there are good and not so good and some downright awful. Despite being 3 or 5 year investments, in reality they are long-term investments, where the positive rewards may take some years to bear fruit, and as with almost every business, extracting money from them requires a carefully considered exit strategy and ideally several potential buyers.

The company you keep

In the latest Trainspotting film, (T2, which is a return to Edinburgh and the characters from 20 years ago) two of the characters (Renton and Simon) decide to have a proper go at running a “business”. Despite being “creative thinkers” and possessing “the gift of the gab” rather more is required to run a successful business. Sadly, their skill set and personal focus do not lend themselves to a successful outcome. Some investors could be forgiven for thinking that the degree of risk being taken is similar to that of investing into non-mainstream investments. However the only thing in common is the capability of the management of the business. Good managers can turn a bad business around, but equally a good business can be ruined by bad management. We all know that there are some very unsavory characters in business, some even cross-over into politics. Trainspotting has a particularly nasty character. As is always the case, people are key. In this form of investing, it is certainly the case that a good business plan requires a good management team to implement it.

Choose wisely

So (and here is where you imagine Ewan McGregor reading this) if you think that you might want to choose to invest in small businesses, choose to create jobs, choose wealth creation, choose something a bit different, choose a dose of tax relief, perhaps you should be thinking about choosing to invest into an EIS, SEIS or VCT. As with T2 it won’t be everyone’s cup of tea, (or drug of choice). Generally, you’ll need a minimum of £25,000 to invest. This is for those that do want to choose some of the companies that will make a mark on the next 20 years. Those that are comfortable with the risk. Those that are choosing to invest for the long-term and have a clear idea of what they are getting into. Then investing in businesses can provide a rewarding experience. But choose wisely. Here is the trailer for T2: Trainspotting.

Dominic Thomas
Solomons IFA

Investing in a BusinessDominic2023-12-01T12:18:49+00:00

Good Money Week 2016

Sorry, I’m a bit late in the week to give a mention to Good Money Week 2016. If you are a client or have been following my blog over the years, you will know that I have been an advocate of what used to go by a different name, but is essentially the same National Ethical Investment Week.

Let’s start by stating the obvious, not all businesses are terribly “nice” some are run by people that can only be described as “psychopaths” (see book by Jon Ronson) and others are simply all about extracting as much profit without any regard for people or the planet. However, when it comes to defininig “good” and “bad” we all know that life gets somewhat complex.

Ethical investment began life really as a way of not investing in certain industries – typically, gambling, pornography, weapons and alcohol. Since then things have moved on, the world has become more complex and Governance has become arguably the key issue for businesses.

Ethical or Socially Responsible Investing (SRI) offers a range of options to best suit your values. It is not necessarily the case that these will perform worse than “non ethical” investments, which is often a misconception. In any event looking long-term, one can surely make the argument that sustainable businesses, services and products are highly likely to be profitable in the future.

SRI and Ethical Portfolios

Anyhow, quite a number of our clients express the view that they would like ethical criteria applied to their investments. Now it isnt a perfect world with perfect solutions, but certainly much can be done.

We offer ethically screened portfolios for those that want them and for those with assets under £100,000 we offer a low cost service with ethical options too – just have a look at our 100 Club, if you are looking for an ethical ISA or General Investment Account… and no need to even speak to us if you dont wish to. Click here for more.

Of course if you wish to discuss this in more detail, just send me an email or better still, pick up the phone!

Call me on 020 8542 8084

As you probably gather from this blog, I like movies and see a fair few of them. This short fairytale is perhaps one of the strangest I have seen in a while, but its the one that Good Money Week are using… so in the spirit of co-operation, here it is.

Dominic Thomas
Solomons IFA

Good Money Week 2016Dominic2023-12-01T12:19:00+00:00

12 Next