The Autumn Statement – the Ghost of Christmas Past

Dominic Thomas
Nov 2023  •  2 min read

The Autumn Statement – the Ghost of Christmas Past

We are in the closing weeks of the year. Our thoughts turn to Christmas celebrations and perhaps looking ahead to the New Year. The familiarity of our traditions poses a challenge to attempts to change them, yet even the harshest of men, Mr Scrooge, managed to pay attention to what is important and change his behaviour.

I don’t think it is contentious to say that the Conservatives are a party of tax cutting and yet we currently have one of the highest rates of personal taxes in the main economies. Few of us enjoy paying taxes, perhaps because often it seems that our hard-earned money is wasted on expensive ideas and ‘kit’ that doesn’t work very well at all … anyone tried the NHS IT system or indeed any ‘converting to digital’ Governmental system, let alone the military’s ability to spend a fortune on malfunctioning weaponry to cite just a couple of examples. We all have opinions. (As an aside the Power of Attorney system is going digital in 2024, so I urge you to sort yours before they muck it up and make the backlog even longer).

The Conservatives came to power in May 2010, admittedly with the assistance of the LibDems, but then we have had an entire mess of Government ever since.

According to Jeremy Paxton in 2018, David Cameron was the worst Prime Minister since Eden:

“[He] got to the top of a tree in order to set it on fire and cleared off, put the interests of his party before the country and decided to have this referendum, believed one thing was the only right outcome for the country, didn’t campaign for it, got the opposite outcome and XXX off. It doesn’t seem like leadership to me”.

Given the PMs we have had since 2018, Cameron might actually look a lot better, the bar seems woefully low, anyway, for now Cameron is back, this time as Foreign Secretary.

The backdrop of a Covid enquiry which merely proves what most of us thought, that Mr Johnson is an unreliable character (I am being polite), we have the prospect of an election looming by the end of January 2025. The Labour party seems set on sabotage and the plethora of political open goals being squandered is lamentable. The traditional approach of appealing to the notion “everyone has their price” is in the hands of the Chancellor, who is being tempted to cut taxes now that inflation appears to be returning to a more comfortable figure (4.7% October 2023 ONS).

Which of us doesn’t want to pay less tax? In an environment of rising prices, seeing your net pay remain pitifully stagnant is irksome. Yet we also know that tax pays to keep society running in some vaguely civil way. We can all find things to disagree with, it’s almost a rite of passage into a fifth decade. It’s clear that ‘the system’ doesn’t work for all, and indeed seems to generally work best for the few. The sadness is that there seems to be so few alternatives to the binary choices we have here in the UK; stuck in traditions that don’t work for the good of the country. Creativity and visionary leadership remain sadly elusive.

There was a time when the economy was thought about as a way of serving society, yet here in 2023 we are evidently a society that is serving the economy. There is no good reason why this cannot change, and despite experience, I remain an optimist in a sufficient number of decent people.

For the record, I have no intention of offending your political beliefs, but I do think we all deserve rather better than we have had. On 22 November 2023 we shall get further notice …

The Autumn Statement – the Ghost of Christmas Past2023-12-01T12:12:26+00:00

I CARE A LOT

TODAY’S BLOG

I CARE A LOT

Many of us have been under something akin to house arrest over the last year. One of the recent movies that you may have come across on your media platform is “I Care A Lot”. Why am I writing about film again? Well, it’s a pertinent story, here is why…

RESIDENTIAL CARE

Many of us may have to contemplate Residential Care for ourselves or our loved ones. I have very few clients that relish this prospect. Most prefer to stay in their own home for as long as possible, retaining their independence and dignity as they see it. Most people will therefore be likely to only find themselves in care if a life, lived at home is not really possible. The cost of residential care can be significant, the weekly fees can be eye-watering and probably far exceed any weekly that you have achieved in your entire lifetime. Those of you that have faced this already will know this already.

THE LETTER OF THE LAW

The basic plot of the movie “I Care A Lot” sees lawyer Marla Grayson (Rosamund Pike) present the façade of caring for people in this predicament. She is using the law to imprison people in a care facility and then take over managing their assets making a fortune in fees in the process.

She abuses the system, fools the judiciary, bribes the medics, funds the care home managers and manipulates her way to a fortune. The first 30 minutes of the movie had my blood boiling as she serenely executes her targeted imprisonment of Jennifer Peterson, (Dianne Wiest) someone that is clearly able to look after herself and is well resourced. In a courtroom Marla’s arguments are well rehearsed, tried, tested and watertight – they seem reasonable. “You can’t care for someone by doing what they want. You have to do what they need and I can care better than a family member.” We suspect and the court knows that this is sadly often the case. We are left to face the uncomfortable truth that we can see the legal point, even if its wrong.Sadly, this part of the film is alarmingly believable, later elements are not, but I will leave those for you to discover.

SOLOMONS BLOG I CARE A LOT MARLA - ROSAMUND PIKE

TAKING CONTROL

In the UK having Power of Attorney can or should ensure that this sort of abuse of power cannot happen. Whenever the State is permitted to step in, there will always be strings attached and likely little contextual thinking as the State is an institution, designed for box-ticking and box sorting to answer bigger questions of taxation rather than the nuances of individuality.

Having a Will and Power of Attorney drawn up properly and discussed with the people you intend to hold positions of responsibility (Attorney, Executor or Trustee) is a fundamental task of good financial planning for the future.

TRUSTED ADVISERS

We might all want professionals to be trustworthy, but we know that they are simply people and have their own pressures. Money is a sure way to attract the wrong people and illicit the worst responses from them. As also developed in the excellent six-part mini-series “Behind Her Eyes” starring Simona Brown, Eve Hewson and Tom Bateman (also on Netflix).

TAKING INITIATIVE, PLANNING AHEAD

Last week I took on a very bright new client who has given this much thought. Perfectly capable today, but with a clear appreciation that the day may come when that is no longer the case, and perhaps (probably) “I wouldn’t even know”. Your planning should be designed to give you peace of mind, not anxiety. The great difficulty is finding someone in whom you can place a high degree of trust. Following the law does not demonstrate trust, clarifying, documenting and understanding your own expectations is, which is why reviewing and checking progress with you each year is so important. A year ago, few would have considered the challenges that we have faced together. They have presented tests for our values and hopes. Have you kept us up to date with any changes to yours?

For a dramatic way to grab your attention, here are the trailers for the movie and the series mentioned.

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?

I CARE A LOT2023-12-01T12:13:09+00:00

WHAT YOU CAN DO NOW

TODAY’S BLOG

WHAT YOU CAN DO NOW

When things around us begin to collapse, there is an undeniable sense that screams within us to “do something!” (I’m sure it’s not just me). The global stock markets taking a battering are not good for our nerves (we were not designed for this). The temptation to do something, anything! is palpable… but you have me and all proper financial planners telling you that selling in a crisis is just about the worst thing you could do. These things happen, they come they go, they happen again. This does not placate any of our feelings, but it may help remind us of truths.

However, we are still left with the feeling about wanting to do something, even if that is not to mess with your portfolio. So here I have compiled a list of things to do. It is not exhaustive, some are more important than others, but I would urge you to consider them, particularly if you are feeling reasonably well, but having to self-isolate, or have chosen to do so.

YOUR TO DO LIST

  1. DON’T PANIC: The first thing is not to panic, whilst this version of calamity has not happened before, something very similar has. Disasters have a lot in common, they are fairly regular and prone to repeat without much warning.
  2. TAKE STOCK: This is a good opportunity to review your cash savings. You will remember that we have talked about having reserve cash funds of anything between 3-12 months of typical spending, more in some instances. See our video. Well this is the moment that those reserves may need to be called upon. Also remember that you should try to limit cash savings at any one bank to £85,000 for full FSCS protection. Let me know if you want more about this.
  3. CHECK YOUR PRIORITIES: We all know that plans are well intended, but life has a habit of getting in the way. That doesn’t mean that the plan is wrong or doomed, merely that some flexibility is probably required. So your plans may need to be adjusted, reconsidered, reviewed, postponed, delayed or cancelled, depending on your circumstances and what is wise for you.
  4. REVIEW YOUR BUDGET: You should also take this opportunity to review your regular outgoings. Have another look at your spending plan. What is important and essential, what is nice to have and what is superfluous. Let me be clear, with some luck and good leadership, the current crisis may be over within a few weeks or months, but it could drag on for a bit longer. Stopping your subscriptions to things you enjoy and use may not be sensible, unless you don’t benefit from having them.
  5. LIVE GENEROUSLY: I am a great believer in small businesses, so think about the impact of your financial choices on those within your local community and our wider one. If you have booked and paid for something and now plan to cancel, yes that might be sensible, but you have a choice about whether you simply treat the money as gone, perhaps to someone that needs it more. I’m not suggesting you should, but to merely raise the fact that you have a choice.
  6. HOPE FOR THE BEST, PLAN FOR THE WORST: The current coronavirus is not going to be a “walk in the park”. If statistics are correct the fatality rate is higher than the normal flu, particularly for those with pre-existing serious health and respiratory problems, but we expect the vast majority of people to survive.  We all hope that we will all survive whatever is coming down the road, but some will not. Yes, this is very morbid. However, I am assuming that one of the reasons that I am in your life is so that I do not ignore the difficult challenges to do with money and your financial wellbeing. My job is not to sweet talk you with nice words, but to provide a responsible truthful voice, at least as far as I see it. You need to ensure that your Will is up to date, that your Executors know what their responsibilities are, that protection policies provide ample cover. You should also consider Power of Attorney so that someone you trust can take financial decisions on your behalf if you cannot. Need help? get in touch.
  7. COMMUNICATE – GET IN TOUCH: You also need to ensure that the relevant people know where your important documents are. Why not put a copy on our portal too – see www.solomonsifa.co.uk/pfp for more.
  8. REFLECT & REMEMBER: If you find yourself having to “self-isolate” why not take the time to finally get around to writing up a brief version of your life-story. I hope that this will have the effect of reminding you of many good experiences in life and happy memories and provide space to reflect on who and what is important. Add photographs, then get to work on creating a book using a bit of software within Apple or Vistaprint or something similar, get it printed, get it done. If you would like a useful template email me.
  9. CHECK IN ABOUT YOUR LONG-TERM PLANS: In terms of your financial planning – I’m working on the assumption that your plans have not altered. If they have get in touch. It is possible that some may need to be adjusted, but I doubt that this is a wise time to do that. Your investments remain globally diversified, across various asset classes and low cost where possible. We have seen the value fall sharply before and we will see it again, but there is no need to panic. In the same way that you didn’t sell your home during the last property crash, you sat it out.
  10. REVIEW YOUR BUCKET LIST: Appreciating the precarious and fragility of life will hopefully bring to mind some things that you would like to experience – have a think and let me know if anything new should be added to your bucket list, they dont have to have a financial price tag, but at least when we next review your plans together we can check to see how you are getting along…

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?

WHAT YOU CAN DO NOW2023-12-01T12:13:21+00:00

CONFERENCE TIME

Conference Time

I was on conference in Birmingham this week… no not for the Conservative party.  A much more trustworthy bunch – “my institute” – the CISI or Chartered Institute for Securities and Investment. I have been attending this for a number of years now and always manage to find several useful and practical things that I can do to improve how we help clients, be that improved technical skills, evolving technology or “simply” better practice management.

This year I was particularly struck by some of the issues raised by Dr Moira Somers, a clinical neuropsychologist from Canada. In essence she helped explain why all of us are guilty of not doing things that are good for us. In this context why, clients do not do some of the things that we advise or require them to do so that we can help them better. Things in their interests but simply get put off again and again.

That Thing You Don’t Do…

Two things that readily came to my mind. Getting clients to draw up their Wills and Lasting Power of Attorney. Admittedly this is a fairly morbid subject. The professional advice and implementation costs are not insignificant. The importance of having these in place can never be overstated by anyone that has experienced not having them when required. Like everyone else, there are things in my life that I don’t get around to. We might call this self-defeating behaviour. Hopefully I now have some thoughts about new strategies I might employ to encourage “adherence” … but I guess time will tell if these are effective.

No Will, No Way

Dr Somers explained that In Canada, 70% of people do not have a Will (audience audible drawing of breath). Here in the UK I have little reason to believe that it is much better. After a quick bit of research, it would seem that in London 59% of adults do not have a Will. This is not as bad as Glasgow where the rate rises to 70%.  As the life expectancy in Glasgow is far lower than it is in London, I would encourage Glaswegians to accept the challenge to beat London in this statistic alone.

Not Enough For A Boiler Room Scam

Basic money skills – such as budgeting and saving are at very poor levels in the UK. One statistic mentioned was put in stark terms. Most people in Britain do not have enough cash in their bank to replace their boiler, should it fail this winter. They would have to borrow and go into debt. The UK is not unique in this regard. Our clients are of course people who do save or have done so and are better at acting for their benefit (and that of their family). However, most of us could probably improve our handling of money, so that it is not wasted or simply frittered away. Every good financial plan starts with the end in mind, but also the reality of today, how money is spent and used now. The cost of lifestyle is vital to understand when attempting to maintain and protect 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

CONFERENCE TIME2023-12-01T12:17:48+00:00

Power of Attorney – Are you due a Refund?

News from Alex Truesdale today in relation to possible refunds for recent Power of Attorney.

Power of Attorney – are you due a refund?

OPG LPA/EPA REFUND PROCESS: FEBRUARY 2018

WHY HAS A REFUND BEEN OFFERED?

When LPAs/EPAs are registered, a fee is payable to the Office of the Public Guardian, of £120 or £110 per LPA/EPA, which in some circumstances was reduced by 50%.

In an announcement made by the Ministry of Justice yesterday, partial refunds are being offered to those who applied to register for powers of attorney between 1 April 2013 and 31 March 2017 (you don’t need to know precisely when you applied).

According to the MoJ, the process to register LPA/EPAs became more efficient during this period (probably because the volume of LPA registrations submitted has climbed so markedly as the general public become aware of the advantages of having LPAs in place)  and as a result, operating costs for the Office of the Public Guardian came down. However, the fee charged for the application did not reduce in line with this. The fee was subsequently lowered by the MoJ to £82 per LPA, a change which came into effect on 1 April 2017. This announcement stops short of an automatic refund being sent out to all donors, so do please spread the word if you have friends, neighbours or relatives who may also have applied

WHAT DOES THIS MEAN FOR ME?

This applies to lasting powers of attorney (LPA) and enduring powers of attorney (EPA) made in England and Wales.  You can make a claim if you’re the ‘donor’ – the person who made the power of attorney, or an ‘attorney’ – appointed by the donor in an LPA or EPA.

The refund must be paid to the donor – or to his/her estate if the donor has since died and may take up to 12 weeks to appear. You only need to make one claim per donor, even if you made more than one power of attorney.

WHAT IS THIS WORTH TO ME?
How much you get depends on when you paid the fees – see table below. You’ll also get 0.5% interest. You’ll get half the refund if you paid a reduced fee (‘remission’).

When you paid the fee Refund for each Power of Attorney
April 2013 – September 2013

October 2013 – March 2014

April 2014 – March 2015

April 2015 – March 2016

April 2016 – March 2017

£54

£34

£37

£38

£45

HOW DO I CLAIM?

If the donor is still alive, start here:  https://claim-power-of-attorney-refund.service.gov.uk/when-were-fees-paid

You’ll need the donor’s UK bank account number and sort code.

You must claim by phone ( 0300 456 0300 (choose option 6))  if:

the donor doesn’t have a UK bank account
the donor has died
you’re a court-appointed deputy

CAN ALEX TRUESDALE WILLS LIMITED APPLY FOR THE REFUND FOR ME?

Unfortunately no – only the donor or the attorney is able to apply.

I HAVE FURTHER QUESTIONS – WHO CAN I CALL?

Just phone 0300 456 0300 (option 6) or email the OPG on poarefunds@justice.gsi.gov.uk

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

Power of Attorney – Are you due a Refund?2023-12-01T12:18:14+00:00

Inheritance Tax and BPR

Inheritance Tax and BPR

You will recall that I have been blogging about various HMRC inheritance tax forms,  and last week I also discussed Power of Attorney and the Court of Protection. Today I am high-lighting some planning opportunities that address these issues in a practical way using BPR – or Business Property Relief.

Inheritance Tax (IHT) is the second most resented tax in the UK. IHT is currently payable at the rate of 40% on an individual’s estate which exceeds the ‘nil rate band’, currently £325,000. Estates which comprise a family home and few other assets can incur a large tax liability. There are many options available to those who wish to mitigate their estate’s IHT liability. Trusts and gifting are the most common strategies employed, but both take 7 years in order to be fully effective. For clients who are elderly or unwell, this is often too long a timeframe.

Business Relief, or Business Property Relief (BPR) as it is commonly known, is a UK IHT relief that was introduced by the Government nearly 40 years ago (7 April 1976). It was designed to allow business owners to pass on businesses to beneficiaries without incurring an IHT liability. In 1996, it was made more widely available to private investors and now allows any qualifying investment held for at least two years, and at the time of death, to benefit from 100% IHT shelter. Most unquoted, UK registered companies will qualify for this relief. This two year timeframe makes this form of planning the quickest way of sheltering assets from IHT.

BPR and Power of Attorney

Another area when BPR could be of use is when Power of Attorney (POA) is in place. Take a look at this example.

Mrs Jones is 70. Her son has Power of Attorney (POA) over her financial affairs and due to her poor health, he can make financial decisions on her behalf. Gifting and trust planning may not be possible in this case, because a number of restrictions exist to avoid attorneys abusing their positions. One of the main rules states that attorneys cannot give away access to a donor’s (Mrs Jones) funds, without applying to the Court of Protection for approval. Trust work and gifting both involve a change of ownership and it would be difficult for Mrs Jones’ son to successfully put either in place. It may also be unsuitable given the 7 year timeframe and Mrs Jones’ health status.

Mrs Jones’ son could, however, invest in a BPR qualifying company/a portfolio of companies on her behalf. Since the investment remains in her name, he has not changed the ownership for the funds and since a BPR investment only requires 2 years to become effective for IHT purposes, it may be the most suitable option.

Unquoted companies are usually riskier than those listed on a major stock exchange. Whilst there are a number of risks associated with investing in unquoted companies, many investment companies offer BPR investments that target capital preservation. These investments involve companies with long-term, index-linked and stable cash flows.

Want to know more? just 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

Inheritance Tax and BPR2023-12-01T12:19:46+00:00

Power of Attorney

Power of Attorney

Clients will know that I advise everyone to arrange Power of Attorney. Often people believe that because generally older people are the ones who suffer from loss of faculty, only the aged need Power of Attorney. I would suggest that this is a very dangerous assumption to make.

Anyone can find themselves unable to make their own decisions. Being hospitalised due to an accident and being “comatose” would be one example. As society becomes rather better at understanding mental health issues (slowly) this can also result in the need for a Power of Attorney.

In essence, an Attorney is meant to act in your interests, as though they were you. This prevents the stressful and lengthy process of going to the Court of Protection, which, like many State institutions is currently “swamped”.

 

Protection in Action

A Power of Attorney is rarely overturned, but last month just such a case occurred. On 13th October 2015, the Court of Protection revoked the powers of an attorney who charged his elderly mother expenses of £117,289 for visiting her in her nursing home and acting as her attorney. The attorney applied the daily charging rate that he used when he was a self-employed independent consultant.

The judge made the comment that ‘one would be hard pressed to find a more callous and calculating attorney, who has so flagrantly abused his position of trust’ with Senior Judge Lush adding that ‘charging one’s elderly mother a daily rate of £400 for visiting and acting as her attorney is repugnant’.

Even though the son, Martin is named as the sole beneficiary of his mother’s estate, attorneys must never take advantage of their position or profit from it, apart from receiving gifts where the law allows it.

The law actually states:

“A fiduciary duty means attorneys must not take advantage of their position. Nor should they put themselves in a position where their personal interests conflict with their duties. They must also not allow any other influences to affect the way in which they act as an attorney. Decisions should always benefit the donor, and not the attorney. Attorneys must not profit or get any personal benefit from their position, apart from receiving gifts where the Act allows it, whether or not it is at the donor’s expense.”

When Martin suggested that the appointment of a panel deputy would be a waste of time and money because his mother’s estate is effectively already his.  Senior Judge Lush disagreed, stating that, “the panel deputy will, for the first time in eleven years, place Sheila at the centre of the decision-making process, rather than view the preservation and enhancement of Martin’s inheritance as the paramount consideration”.

For more details of the case click 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

Power of Attorney2023-12-01T12:19:48+00:00
Go to Top