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Fraser's Blog

The ISA Shake Up

Wednesday, 06 May 2015 08:00

YouGov have reported in a recent survey that around 77% of British adults (around 38 million people), have little or no understanding of the New ISA rules that came into effect in July 2014.

These changes were announced in March’s budget, which brought cheers from many because they made ISAs simpler and more attractive than ever, and increased the annual allowance to its highest ever level.

The Government’s strategy for change was that it would encourage individuals to save and invest more for their future. Further advantages were also announced in December’s Autumn Statement, allowing ISA benefits to be passed to a spouse on death.

For those individuals yet to take advantage of the new ISA rules it’s not too late to benefit, the tax year ends on 5 April 2015.

What’s changed?

New ISA annual allowance

The amount you can invest each tax year has risen to £15,000. Anyone who has already opened their ISA for this tax year (2014/15) before 1 July 2014, can top up to this new £15,000 annual allowance. In the new 2015/16 tax year the ISA allowance increases to £15,240, this means over the next few months investors can shelter as much as £30,240 in ISAs.

Better flexibility

Before these changes there were restrictions on how you could split your allowance between Cash ISAs and Stocks & Shares ISAs. With the new changes you can split your allowance as you wish.

Improved death benefits

Investments are normally subject to Inheritance Tax (IHT) of 40%, if the total value of your estate exceeds the ‘nil-rate band’. This is currently £325,000 for individuals, or up to £650,000 if you inherit your spouse’s or civil partner’s unused allowance. The Autumn Statement changes mean that surviving spouses will have an additional ISA allowance, equal to the amount the deceased spouse had in their ISA.

Transfer options

The new rules allow you to transfer from a Stocks & Shares ISA to a Cash ISA, and vice versa. Under previous rules you were only able to transfer from a Cash ISA to a Stocks & Shares ISA. This removes one of the biggest barriers to transferring Cash ISAs to Stocks & Shares ISAs, which was that you couldn’t transfer back again.

Purchase short-dated bonds

ISA investors now have the flexibility to invest in individual corporate bonds and gilts with less than five years to maturity. previously ISA investors could only purchase these investments with more than five years to maturity.

Transfer free Stocks & Shares ISAs

You could always hold cash in a Stocks & Shares ISA, but interest was, effectively, paid net of basic rate tax. Under the new rules interest on cash in a Stocks & Shares ISA is paid gross and is completely tax-free. Cash ISAs remain unchanged.

Used every year the ISA allowance allows savers and investors to build a substantial tax efficient portfolio. If you had invested the full ISA allowance every year since ISAs launched in 1999, you could have sheltered as much as £139,080 from tax. This figure excludes investment growth.

The value of your investment and the income from it can go down as well as up and you may not get back the original amount invested. Past performance is not a reliable indicator for future results. Please contact us for further information or if you are in any doubt as to the suitability of an investment.

For advice contact me on 01896 757734 or email This email address is being protected from spambots. You need JavaScript enabled to view it. - Fraser Brydon - Money Matters

Financial Planning

Thursday, 23 April 2015 08:00

1. Pension freedoms

Pension savers are eagerly awaiting the advantages of the new pension reforms in April 2015. An estimated half a million people will be able to take advantage of these increased pension options when considering alternatives to annuities for their retirement income.

This means it has never been more important to consider how best to mix guaranteed income from the likes of state pension, final salary pensions and annuities with more flexible, riskier options such as drawdown.

The right approach will suit an individual’s attitude to investment risk and whilst trying to mitigate the potential tax traps of large withdrawals, keeping in mind that only 25% of a pension can be taken tax-free, with the rest being subject to income tax at your personal rate.

2. Reduce your tax burden

Following this year’s general election most expect the new Government to increase taxation. Effective tax planning is the utmost importance now.

• Couples should now plan ahead and set themselves up for a minimum of £21,200 of tax-free income (from April 2015) by making best use of tax bands and personal allowances.

• With the current ISA allowance of £15,000 to use by 5 April and a new allowance of £15,240 from 6 April, a couple can shelter up to £60,480 from further taxes over the next four months. It is also possible to shelter up to £40,000 each tax year in a pension and benefit from tax relief. Those who do not already use this allowance through a work pension including employer contributions, can top-up by contributing to a private pension such as a stakeholder or a SIPP. High earners can carry forward unused allowances from previous years to shelter a total of up to £190,000 in pensions this tax year. Remember tax rules can change and the value of any benefits depends on individual circumstances.

3. Rethinking estate tax planning

The new April rules will make ISAs transferable to the surviving spouse and pensions will be completely tax-free if death occurs before age 75.

As with all planning, you should regularly review to check that plans are on track to achieve their goals, taking into account rule changes such as these. These new changes to the tax treatment of pensions and ISAs on death will mean many pension investors will be rewriting and revisiting their Wills, inheritance tax and estate plans this year.

4. Beating low interest rates

Every portfolio should have an element of cash available, enough should be held to meet short-term spending needs.

Over the long term the low returns offered by cash are often eroded by inflation, and that’s why other assets, such as shares and bonds, could be considered for the rest of an investment portfolio.

Generally, past performance shows that cash is highly unlikely to beat the returns from the stock market over the long term, but unlike cash the market will have its risks.

5. Always seek professional advice

Working out how to arrange a portfolio for maximum tax efficiency can be complicated. Making the most of inheritance tax planning strategies and deciding how much cash to commit to the stock market are all important financial decisions. It is important to conduct detailed research and your professional financial adviser can offer help and guidance to ensure you meet your financial goals.

For advice contact me on 01896 757734 or email This email address is being protected from spambots. You need JavaScript enabled to view it. - Fraser Brydon - Money Matters

Pensions Guidance Service

Friday, 03 April 2015 08:00

In January 2015 the Government announced the name of its new pensions guidance service, which is to be run in partnership with the Citizens Advice and The Pensions Advisory Service (TPAS).

Pensions Wise

The service will be called Pensions Wise: Your Money, Your Choice, which the Government hopes will reflect the empowerment of people approaching retirement to make confident, informed choices about funding their retirement. The service is free and will offer impartial guidance on the many different pension options that will become available from April, and will be presented through faceto- face meetings, telephone conversations or online guidance.

The service will start with a pilot scheme to test what does and doesn’t work well and to receive customer feedback.

What does the service provide?

This service is there to give those approaching retirement guidance on their options and what steps to take, but it won’t offer advice. Detailed advice will still need to be taken from professional advisers. This new Government service will hopefully help the user understand what questions to ask and where to get the best help as well as provide an idea of how they can secure their retirement income.

Users have to book a appointment to use the service, whether they want a face-to-face meeting, or a telephone interview. After the meeting, users will be issued with a summary document so that they can reflect on the guidance provided.

Why do we need this service?

With the introduction of the new pensions reforms in April, the level of possible options has increased dramatically, bringing a new level of complexity into the pensions arena. This means, making an informed decision about how to manage retirement funds and ensuring retirees are able to maintain an income throughout the rest of their lives, is even important than before.

The Government’s pension guidance service promises to create an essential first step for pre-retirees who are looking to find out more about their pension options after April and will help to guide them through what could be a difficult journey.

The facts so far

There are still some outstanding issues and unanswered questions, the Government is yet to go into fine detail about what exact guidance will be offered. It is also important to point out that this service is offering guidance only to pre-retirees. After an initial meeting with Pension Wise, it is still advisable to meet with a professional financial adviser to go through your options in more detail.

For advice contact me on 01896 757734 or email This email address is being protected from spambots. You need JavaScript enabled to view it. Fraser Brydon - Money Matters

Before the 5th April and the end of the tax year, you need to think about maximising your saving opportunities before they disappear for good!

1. Flexible Pension Preparation and Contributions

Your pension contributions need checking annually. Contributing to your pension is often a good way to manage your tax liabilities, although it should be done with your full financial plan in mind. You will need to consider the pension lifetime allowance, which is currently £1.25 million. Anything above this level within your pension can currently be taxed, thus potentially altering your tax planning, so it’s worth checking the size of your pension pot, remembering to allow for its natural growth, if you’re considering extra contributions. Whilst you’re looking at your pension, consider preparing for its new flexibility: the new rules announced during the 2014 Budget come into force at the turn of the tax year.

2. Watch out for the Budget

The 2015 Budget Statement will be delivered by George Osborne on Wednesday 18th March. Look out for any ‘instant’ changes, such as the change to Stamp Duty announced during the December 2014 Autumn Statement, which are a regular occurrence. This is also the Budget prior to May’s UK General Election, so it is likely to have some fairly major announcements designed to appeal to voters that could come into force at the start of the 2015/2016 tax year.

3. Capital Gains Tax Allowance

Many forget the ‘gift’ from the taxman, the Capital Gains Tax Allowance is £11,000 for the current tax year. This means that you pay no tax on Capital Gains up to that this threshold. It is also an individual allowance, meaning that a couple can shelter up to £22,000 and genuine gifts from a spouse or civil partner do not count towards the allowance. There are various other exemptions and careful planning can again really help your tax position.

4. Junior ISAs and Children’s Savings

Junior ISAs for this tax year are £4,000; their Capital Gains Tax Allowance is set at the same rate as adults and they can also make pension contributions.

5. ISA Contributions

Finally the ‘big one’, the amount you can invest into an Individual Savings Account (ISA) resets at the tax year end and if you don’t use it, you lose it. This tax year, following the changes announced in the 2014 budget, the ISA limit was increased to £15,000, up from £11,520 in 2013/2014, which means that many of us may not have increased to the maximum allowance. There’s also no longer a limit on how much you can put into a cash ISA, so your entire £15,000 could be invested in that way, if you so wish.

Monitor your tax code

Check your pay slip or ask your tax office for a coding notice. This details your allowances and any deductions due to state benefits or taxable employee benefits. Errors will affect how much tax you pay and could result in a large tax demand if you have underpaid. You could also be paying too much if, for example, where employment changed and your correct tax code wasn’t applied or you have more than one job. You can claim back overpaid tax for up to four years.

Use all of your personal allowances

Ensure that you are making the most of your individual tax-free personal allowance (PA), which is £10,000 for 2014/15 (£10,600 for 2015/16 tax year) for people aged under 65. For the over 65s, the age-related allowances which are worth up to £10,660 assuming your maximum income doesn’t exceed £26,100, after which your PA would reduce by £1 for each £2 earned above this figure, until it reached £9,440.

Remember to transfer any unused allowances to your spouse or registered civil partner, if they have little or no income, to ensure that they are able to make full use of their PA. Care should be taken to avoid falling foul of the settlements legislation governing ‘income shifting’. Transfers must be an outright gift.

The value of your investment and the income from it can go down as well as up and you may not get back the original amount invested. Past performance is not a reliable indicator for future results. Please contact us for further information or if you are in any doubt as to the suitability of an investment.

For advice contact me on 01896 757734 or email This email address is being protected from spambots. You need JavaScript enabled to view it.. Fraser Brydon - Money Matters

With the recent shake up of Commissions, investors are witnessing many changes this year.

With trail commission on funds bought via investment platforms scrapped since 1 April 2014, many investment platforms have had to introduce new ways of charging for their services.

Platforms have now moved to charging either a percentage-based fee, a flat fee or a combination of the two. This makes it easier to compare different platforms.

This means, if you have a relatively small portfolio a platform charging a percentage based fee may be more competitive. If you have a larger portfolio, a fixed fee is likely to offer you the best option. Should you want to manage your ISA, it’s important to know the dealing charges.

Also consider the type of investments on offer. Most platforms offer access to hundreds of different investments but there can be gaps, so make sure your favourites are available.

You can transfer an ISA to a NISA, a New ISA or even an ISA. They’re all exactly the same thing.

Cash ISA Transfer

If you find a better rate or you just want to consolidate your ISAs so they’re all in one place and easier to manage, it’s very simple to do and should take around 2-3 weeks. Contact the new provider, they will ask you to complete a transfer form and, if necessary, open a new ISA for you.

Do not withdraw the money yourself as it will lose its tax-free ISA status and make sure there are no penalties for switching, which could be the case with fixed rate deals.

Stock Transfer

It is possible to transfer existing investments into an ISA wrapper, making them more tax-efficient. Currently the rules do not allow transferring directly into your ISA but, on a platform, the stocks and shares transfer process is still pretty straightforward.

‘Bed and ISA’ enables you to sell the shares then buy them back immediately from your ISA. There are a couple of points to be aware of when doing this.

First, the repurchase happens immediately after the sale to limit exposure to price movement, but you might get back a lower number of shares within your ISA. Commission, stamp duty and any bid offer spread absorbs them. Also, because you’ve sold shares you will realise any capital gains or losses.

A point to remember is that shares in a company Share Save or SAYE scheme can be transferred directly into an ISA, providing this happens within 90 days of the shares being released.

Stocks and shares ISA transfer

Transferring a stocks and shares ISA, especially if you find a more competitive platform is relatively easy: Contact the new provider and set up an ISA account with them.

Complete an ISA transfer form, which will request the ISA details you are transferring and how much of it you would like to transfer.

Decide whether you want an “in-specie transfer”, this is where your existing holdings are moved over or whether you are selling all or some of your holdings first and transferring the cash value.

Your new provider will notify you when your transfers are completed. HM Revenue & Customs has set a 30 working days time limit for transfer, however, some providers have been taking longer with transfers, particularly those that are in specie. Where this happens, you should contact the new provider. If are still not satisfied you can contact the Financial Ombudsman Scheme, who will investigate on your behalf.

You can transfer an ISA to a NISA, a New ISA or even an ISA. They’re all exactly the same thing.

The value of your investment and the income from it can go down as well as up and you may not get back the original amount invested. Past performance is not a reliable indicator for future results. Please contact us for further information or if you are in any doubt as to the suitability of an investment.

For advice contact me on 01896 757734 or email This email address is being protected from spambots. You need JavaScript enabled to view it.. Fraser Brydon - Money Matters

Income Drawdown

Thursday, 12 February 2015 08:00

The alternative to buying an annuity at retirement is Income Drawdown. You draw a variable income directly from the pension fund and the balance stays invested as you choose.

Being in total control of the pension fund is what gives income drawdown its appeal, but it comes with considerable risks, because it’s you who decides where to invest, and how much income to take.

Many are now choosing income drawdown for a variety of reasons. We look at some potential investment strategies to consider.

Take tax-free cash with no income

Pensions normally allow 25% to be taken tax-free as cash from your pension, leaving the rest invested in income drawdown. There is no requirement to take an income if you don’t need it.

A option could be to wait for the more flexible pension rules to come into effect in April 2015.

If you don’t intend to take an income until later in retirement, you can probably afford to be a little more aggressive in your investment approach, keeping the fund invested in the stock market via investment funds, or if you have the appetite, directly in shares. Retirement can last 20-30 years, over this period of time shares have historically out-performed other asset classes such as cash, or gilts (Government bonds). Remember, though, there are no guarantees and any investments can fall in value as well as rise so you could get back less than what you invest.

Take a regular income

If your plan is to take an income from your drawdown fund then your investments need to keep pace with your withdrawals, or you may exhaust your fund. If you take too much and investments don’t do as well as you thought, your fund value and future income will fall. Investing solely in cash will protect the value of the fund short term, but isn’t so suitable long term as it is much less likely to produce the level of returns required to sustain your withdrawals.

An option would be to draw the income generated by your investments, leaving the investments themselves intact to grow over time. This is called drawing the ‘natural yield’. Should markets fall, you should still receive an income whilst you wait for the capital to recover.

Use Diversification

Smoothing the volatility of shares can be found by an exposure through a collection of equity income funds. These aim to invest in firms that have the potential for rising dividends over the long term, whilst offering potential for your capital to grow. The fund manager spreads your money across a range of dividend-paying companies, spreading risk.

Additionally, to diversify your income further you could also consider bond funds, both corporate and Government bonds. The income they provide is still reasonably attractive in the current low interest rate environment, keeping in mind an unexpected jump in interest rates or rising inflation expectations would generally result in prices falling but, the income should remain the same.

With such a consideration an option could be strategic bond funds, where the manager has the freedom to seek out the best opportunities, while also having the ability to offer some shelter in tougher times.

Looking to maximise income

Capital withdrawals provide big injections of income but there are inherent risks with this approach, withdrawing capital when your portfolio is in decline will compound your losses.

There are steps you can take to reduce this risk. The first is to ensure your portfolio is diversified and not entirely dependent on the performance of the stock market. Funds have the potential to perform in a variety of market conditions.

Consider holding at least a year’s required income in cash. If markets fall, having a cash buffer to draw upon allows you to watch market trends, whilst still receiving an income.

Reducing or stopping income withdrawals temporarily whilst the markets are in turmoil is also a strategy you can adopt, thus preserving your funds longer term.

Mixing your income

The main point to income drawdown is the income is variable and not secure. Yet in retirement, it’s good to have some level of secure income to cover basic living expenses and bills.

You could use some of your pension to provide the security of an annuity with income drawdown. This option can offer the best of both worlds.

The value of your investment and the income from it can go down as well as up and you may not get back the original amount invested. Past performance is not a reliable indicator for future results. Please contact us for further information or if you are in any doubt as to the suitability of an investment.

For advice contact me on 01896 757734 or email This email address is being protected from spambots. You need JavaScript enabled to view it.. Fraser Brydon - Money Matters

'Inflation-proof' your income

Tuesday, 03 February 2015 08:00

Investing in the stock market is a popular way to generate additional income for those in retirement, especially with interest rates likely to remain low for the foreseeable future.

Shares offer the potential for significant long-term income growth. This is vital for those who may rely on the income from their investments for 20 years or longer. Even a relatively low rate of inflation will significantly erode spending power over the long term, so having a fixed income can be disastrous.

By investing in companies which pay rising dividends, investors can ‘inflationproof’ their income – though of course it also means the value will inevitably fluctuate along with the share price. These are exactly the types of companies sought by equity income funds, which principally invest in companies with an attractive dividend.

Furthermore, these funds also offer the potential for capital growth, as they have an in-built ‘buy low, sell high’ discipline. Investing when a company is out-of-favour, and the share price depressed, should result in a boosted yield. If the value of the stock is then recognised by the wider market, the share price rises and the yield falls. The manager could then sell the stock at a profit, having enjoyed an elevated income stream. If markets go through a tough patch the income usually falls proportionately, meaning that the longer term value is eroded.

For advice contact me on 01896 757734 or email This email address is being protected from spambots. You need JavaScript enabled to view it.. Fraser Byrdon - Money Matters

VCTs

Friday, 23 January 2015 08:00

How we invest our capital has expanded dramatically over the years.

Options range from individual company share ownership to more unfamiliar territory.

One “in vogue” option is Venture Capital Trusts (VCTs), they trade on the London Stock Exchange (LSE) alongside other publicly listed companies. They aim to produce a profit by investing in small, often unquoted, companies usually needing more investment to help them grow their business.

VCT managers are extremely experienced; they use this experience to help the business grow, taking a hands-on approach, to the investee company by taking a seat on the board.

VCTs, don’t invest purely for growth.

VCTs often provide part of their investment as a loan to the merging business with a smaller amount in shares. Such loans can help generate an income, which is paid to investors in the VCT. When underlying businesses are sold, a portion of any gain is paid to VCT investors as a dividend.

Many VCTs pay a tax-free dividend of around 5%. The majority of returns from VCT investment come from dividends, rather than capital growth. However, the fact remains that investing in smaller companies is higher risk and VCTs are aimed at more sophisticated investors.

The Government offers generous tax relief to those who invest in new issues of VCT shares. An income-tax rebate of up to 30% is available on the initial investment, meaning a subscription of £10,000 in effect costs you £7,000. Up to £200,000 can be invested each tax year and there is no capital gains tax to pay on the disposal of VCT shares. Any dividends are also paid free of tax.

To qualify for the 30% income tax relief,you must remain invested for a minimum of five years. Investors might consider VCTs, once they have used up their pension and ISA allowances, given the tax breaks they offer.

VCTs do fit in an existing portfolio and should be viewed as a pre-retirement plan to help build up tax-free income until retirement. Many investors do consider VCTs as very high risk and, therefore, they are often completely overlooked or avoided.

There are risks, but it is spread by investing in a portfolio of companies. Since VCTs were introduced in the mid-1990s, managers have become more experienced in their field and often have a vested interest; so by investing their own capital alongside other investors, they have their own risk and reputation to consider.

If you have utilised your ISA allowance and contributed fully to your pension, you may want to take a closer look at VCTs

The value of your investment and the income from it can go down as well as up and you may not get back the original amount invested. Past performance is not a reliable indicator for future results. Please contact us for further information or if you are in any doubt as to the suitability of an investment.

For Advice contact me on 01896 757734 or email This email address is being protected from spambots. You need JavaScript enabled to view it. - Fraser Brydon - Money Matters

More good news for Pensions

Wednesday, 14 January 2015 08:00

Following the pension reforms introduced in the Budget this year, the Government has recently announced further changes to the tax treatment of pensions on death.

These new changes, which are yet to be confirmed, will make it possible for money purchase pension funds, including those already in drawdown, to be passed on to beneficiaries free of tax.

This should encourage investors to maximise their pension contribution allowances. You can now save into your pension fund, knowing you can now draw on all of your savings from age 55, but you can also pass on any unused savings to beneficiaries’ tax free on death.

At present, it is only possible to pass on a pension as a tax-free lump sum if you die before the age of 75 and you have not taken any tax-free cash or income. If you have, the fund is subject to a 55% tax charge.

As of April 2015, regardless of when you die, you can pass on your pension tax free, provided your beneficiaries keep the money in a pension. Should they decide to make withdrawals, they only pay income tax at their highest marginal rate, providing you die after age 75.

This includes: - Pension funds paid out from drawdown before or after age 75 from a standard pension will not be subject to the 55% tax charge - Drawdown funds can be paid to inheritors as pension assets tax free - Income taken from inherited pension funds is tax free if the member died before 75

The tables below show the difference between old and new rules at a glance.

The Inheritance Tax (IHT) rules remain the same for both old and new rules where pensions are usually held in trust outside your estate and therefore inheritance tax isn’t usually applied.

Generally pension providers should allow you to nominate your beneficiaries, when you begin your pension. It should also be possible to change the beneficiary should your circumstances change over time. This nomination is not usually legally binding; however it does make your provider aware of your wishes.

It is expected that the new rules will be effective from April 2015. The information currently available suggests the announced death benefits flexibility will apply to death benefits paid after April 2015.

If you have already decided to go into drawdown, there should be no advantage in delaying. Even if the worst happened and you died before April 2015, your beneficiaries could opt to delay taking any lump sum payments until after April 2015.

Those currently in income drawdown should be able to benefit from the new rules from April 2015.

Those who have used their pension to buy an annuity, will be unaffected by the new changes. An annuity will stop on your death unless you have chosen to protect the income.

Death BEFORE age 75

Lump Sum - OLD RULES; Tax Free or 55% tax if in drawdown. NEW RULES; Tax Free

Income - OLD RULES; Taxed as income (via an annuity or drawdown) Option available only to dependents. NEW RULES; Tax Free if taken via drawdown. Taxed as income if taken via an annuity. Option available to any beneficiary.

Death AFTER age 75

Lump Sum - OLD RULES; SUbject to 55% tax. NEW RULES; Subject to 45% percent tax (unless paid as income)

Income - OLD RULES; Taxed as income. Option available only to dependents. NEW RULES; Taxed as income. Option available to any beneficiary

For advice contact me on 01896 757734 or email This email address is being protected from spambots. You need JavaScript enabled to view it. Fraser Brydon - Money Matters

It's a numbers game

Monday, 05 January 2015 08:00

The world of finance is always on the move, knowing the key numbers that change is essential. Just when we have got used to one set of allowances and tax breaks along comes the Government and shakes everything up again.

Budgets set by the Chancellor George Osborne always deliver a series of changes that leave people overwhelmed and confused. We look at the key numbers to hopefully encourage you to save more or avoid any hits that will eat into your pocket.

There are 1128 tax reliefs available to individuals and businesses, according to the latest report by the National Audit Office. Most of the popular including ISAs, pensions and the inheritance tax nil-rate band threshold are shown below.

£15,000

You can save £15,000 into an ISA each year from July 1 2014. It is the maximum amount you can save into a taxadvantaged each tax year (from April 6 to April 5).

The maximum ISA allowance of £15,000 will be universal. You can put it all in cash, all in stocks or shares or a mix of them both.

305 months

It would take 305 months to save £1 million in a stocks and shares ISA, according to calculations by investment manager Fidelity. This assumes an investment today of the £15,000 limit. This example assumes the ISA limit is frozen for the next tax year of 2015-16 and then rises in line with inflation, then averaging 2.5 %, and 5% growth a year. This is only a model, but it does show the strength of constant saving.

£1.25 million

Lifetime Allowance does put the bar onto how much you can save into a pension, this limit is on the amount of tax relief you are allowed. Break through this £1.25m limit, without protecting yourself and you will pay a tax change of 55% on any excess.

Individual protection is available if the value of your pension benefits at April 5 2104 exceeded £1.25 million. This provides you withyour own personal lifetime allowance equal to your existing savings at the time, subject to a maximum of £1.5 million.

£26,760

By leaving it late you would have to invest £26,750 each year of your current salary if you started a pension at the age of 50 to be able to achieve a retirement income at 65 of £20,000 per year, assuming a growth rate of 5.5% and inflation at 2.5%.

£325,000

Inheritance tax is charged at 40% on the value of an individual’s estate over the nil-rate band threshold, which is £325,000 for an individual.

However, IHT is not payable when an estate passes between a husband and wife or from one civil partner to another. Married couples or civil partners can transfer the unused element of their IHT-free allowance to their spouse when they die. A couple would therefore have a total useable tax allowance of £650,000 by doubling up their allowance this financial year.

£11,000

Capital Gains Tax (CGT) is an allowance that offers everyone the ability to make a profit of up to £11,000 in this tax year without paying CGT and the tax does not apply to transfers of assets between married couples or civil partners. Careful management means a couple can, therefore, make a profit of £22,000 and pay nothing. Beyond this basic rate taxpayers pay 18%, while higher rate payers pay 28%.

£6,000

Selling personal possessions, including books, furniture, old coins, paintings, etc, for less than £6,000, any profit is tax-free. The sale is CGT exempt, if the objects are owned and sold by a married couple, the exemption increases to £12,000.

The value of your investment and the income from it can go down as well as up and you may not get back the original amount invested. Past performance is not a reliable indicator for future results. Please contact us for further information or if you are in any doubt as to the suitability of an investment.

For advice contact me on 01896 757734 or email This email address is being protected from spambots. You need JavaScript enabled to view it.. Fraser Brydon - Money Matters

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