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Tax Year-End Planning

With tax year end fast approaching, it is time to capitalise on the government tax allowances
within various tax wrappers.

ISAs

The current tax free allowance for ISA investments is £20,000. There are now multiple ISAs
that you can contribute to. These are; Stocks and Shares ISA, Cash ISA, IFISA and Lifetime
ISA which all have slightly different qualifying rules. The £20,000 is a total allowance which
is accumulative across all ISAs. All of these ISAs benefit from a protected tax free wrapper,
meaning no tax on dividends, interest or growth within the account. Please speak to your
adviser should you wish to understand the options open to you with regards to ISA
contributions in this tax year.

Pension Contributions

Annual pension contributions are currently capped to your earned income to a limit of £40,000 gross*. Some individuals are
also eligible to make use of a piece of government legislation named ‘Carry Forward’ where
you can utilise previous unused annual allowance from the three previous tax years. All
pension contributions attract an immediate 20% government tax relief and more can be
claimed for higher and additional income tax payers. Due to ever changing legislation in the
pension market we recommend contributions are explored each year as part of a tax year
end exercise. Your financial adviser can provide a bespoke tax calculation on the benefits of
this for you, even if you are a non earner.
*This annual allowance is tapered down for high income earners.

Capital Gains Tax

Capital gains tax is tax on profit of an asset that has sold with a ‘gain’. The current capital
gains tax free allowance is £11,700 for individuals and £5,650 for trusts. Please speak to
your adviser if you would like to know more about your current capital gains position.

Dividend Tax

The current dividend tax free allowance is £2,000. The tax rate on dividends over your allowance depends on the income tax band that you are in. See below the break down of the tax rate on dividends for the respective tax band.

Tax Band                                              Tax Rate on Dividends over your allowance

Basic Rate                                               7.5%

Higher Rate                                            32.5%

Additional rate                                       38.1%

Inheritance Tax

The current inheritance tax free threshold is £325,000 for individuals plus a potential
£125,000 in residents nil rate band*. One way to reduce potential inheritance tax liability is to
make use of your annual gifting allowance. The gifting current allowance is £3,000 per tax
year, however if you’ve not optimised this allowance in the previous tax year you can carry it
forward.
*Residents Nil Rate Band is only applicable to some individuals. Please speak to your
adviser for more information.

Junior ISA

Save up to £4,260 in a Junior ISA for your children under 18, living in the UK. There are 2 types of Junior ISA’s, A cash Junior ISA, you wont interest on the cash you save and a stocks and shares Junior ISA, your cash is invested and you wont pay tax on any capital growth or dividends you receive. Children are able to have one or both types of Junior ISA

CONTACT US

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2019 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used. 

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Here’s how you should invest at every age

A number of studies have shown that people are not investing enough to retire comfortably. In a survey conducted by the Financial Conduct Authority it was found two-fifths of people have less than £5000 in their pension pot. This may mean that they will have to work longer than they initially planned in order to retire comfortably. It is especially the millennials that prove to be a bit gun-shy
when it comes to investing. This, however, comes as no surprise as they were rudely introduced to the world of investing during the 2008 financial crisis. The cohort theory compares them to individuals who came of age during the great depression. By starting to invest early you will accumulate more money and it will ensure that you retire on time. Meir Statman, a professor of finance and author of ‘Finance for Normal People’ said that taking a risk is not a luxury; it’s a necessity”. Once you’ve decided how much risk you can stomach, you need to start thinking about how to invest.

Best investment for your 30’s

If you’re in your 30’s, you have 30 years or more to profit from investments before you’re likely to retire. Temporary declines in stock prices won’t hurt you much as you will have years to regain your losses. You can now access your pensions at the age of 55, but it’s likely to go up by the time today’s 30 year-olds reach retirement age. With AWM, your money will be invested in a selection of funds, grouped together as a portfolio for diversification. These range from AWM 1, our lowest risk portfolio invested in cash, bonds and absolute return funds primarily to protect returns and collect a steady income and dividends, to AWM 5, our highest risk grouping mainly focused on equities from the UK to the US to some emerging markets. So no matter your risk appetite, there is an investment portfolio that will suit your fancy.

Best investment for your 40’s

If you’re late to the saving and investing party, now’s the time to consider some lifestyle trade-offs. Start by saving into your employer’s retirement plan if you haven’t already done so. If you’ve been investing in a Defined Contribution Scheme or any other pension scheme, it’s now time to review whether or not you will have enough saved by the time you reach retirement age. If it fits your risk appetite, try to allocate your assets more towards bonds and fixed investments now, than in your 30’s. Also ask your adviser about the Carry Forward legislation, you may be allowed to contribute more to your pension than the annual allowance.

Best investment for your 50’s

At this stage in life, you need to examine your future goals and explore your current and desired future lifestyle. Investigate your current income, projected income and tax situation. The result of your analysis will influence the best investments in your 50s. It’s now time to plan your additional Income Streams. We know it can be hard to navigate, speak to one of our advisers to help you.

Investment advice at any age

Once all your expenses are covered and you can afford to, try to contribute 10-15% of your salary, not just your employer’s contribution. This will help set you up for a secure financial future. If you want to contribute additional money for your retirement, you could consider contributing to an ISA. It’s a tax-free way to save or invest. With a cash or Stocks and Shares ISA, you can save up to £20,000 for the 2018/19 tax year. It has similar features to a savings account but the interest you earn is tax-free. Your Stocks and Shares ISA can contain a range of investments. Because they are held in an ISA any gains you make are tax-efficient. There are also further ranges of ISAs including IFISA, LISA with their own benefits. Ultimately, how you invest in each decade is dictated by the progress you’re making towards your financial goals. Every case is unique, so speak to your financial adviser and decide on a plan of action based on their advice.

Start investing as early as possible to secure your financial tomorrow.

CONTACT US TODAY

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used.

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All you need to know about ISAs

What is an ISA?

An ISA (Individual Savings Account) is a tax-free way to save or invest. If you’re starting to think about saving or investing, ISAs could be a good place to start. On other savings accounts, you may have to pay income tax on the interest you earn. The interest on a cash ISA is free from tax, so all the interest you earn, you keep. In fact, these investments are often referred to as a ‘tax-free wrapper’. The
benefits can be used on a range of investment types, as shown below in the variety options you have access to.

Advantage of ISA

Tax advantages fall into two categories: capital gains tax and income tax benefits.

ISA Income Tax Benefits
In most situations, any income you earn, through wages, interest or dividends, is subject to income tax. However, that is not the case with ISAs. All of the money you earn on these savings vehicles is completely tax-free. Income tax benefits are just part of the equation when you are considering an ISA, however. The other advantage to these accounts is the capital gains tax benefits you can enjoy.
ISA Capital Gains Tax Benefits
Capital gains tax benefits specifically apply to Stocks and Shares ISAs. Most investment products are subject to a capital gains tax if the amount of earnings from your shares in a single year exceeds the set limit. This tax rule is waived for investments in ISAs, making them definitely worthwhile for those who plan to sell or make a a large gain.

Know your options

ISAs have evolved into five different shapes, Cash ISAs, Stocks & Shares ISAs, Innovative Finance ISAs, Lifetime ISAs and Junior ISAs. Clients should consider what their savings goals are before choosing their preferred self-investment vehicle, or by seeking financial advice.

Key facts:

• The ISA allowance is £20,000 per annum for the 2018/19 tax year.
• HMRC states you cannot contributue into two of the same ISA type in the same tax year.
• All income and growth within your ISA is completely tax-free.
• ISAs are taxable for inheritance tax unless they invest in qualifying investments for inheritance tax relief.

Types

Cash ISAs

• Lets you manage your money like a typical savings account.
• They could offer instant access or pay a fixed rate of interest over a few years if you don’t think you’ll need access to your savings.
• Designed as low risk, no chance of loss products operating at a defined interest rate.
• Interest rates align with the Bank of England base rate, so at present, offer very low interest.
• Some ISAs allow you to lock in for a fixed term, thus increasing the interest payments.
• Speak to us for the best rates. 

 Stocks & Shares ISAs

• Your money is invested in the stock market.
• They’re designed for people who are happy to invest over a long period of time and are looking for potentially higher returns. You need to accept risks that come with investing in the stock market.
• The funds AWM would look to invest you in are low cost managed solutions to reduce fees where possible.

Innovative Finance ISA

• Designed for sophisticated Peer to Peer lending.
• This vehicle has been available since 6th April 2016, allowing investors tax-free gains on the capital invested.
• The IFISA is designed for higher risk clients, as their capital is exposed to default risk or missed payments, as opposed to equity or fund based risk.
• Due to the new nature of IFISA, we strongly suggest contacting us for more information.

Lifetime ISA

• For those saving for a property, the Lifetime ISA (LISA) provides government bonuses for savers to get on the ladder.
• Rather than being capped at £20,000, the LISA is capped at £4,000, however, this forms part of your £20,000 overall allowance.
• For those who have already bought their first property, the LISA can be used as an additional retirement vehicle, but cannot be withdrawn until 60 years of age without penalties applying.
• The LISA has an exit penalty if you’re withdrawing for any reason other than a first time purchase or before 60 years old. The only break of this rule is if one is terminally ill.
• For each time you contribue into your LISA, the government will add 25%of your contribution.
• A LISA can only be opened up to the age of 40 years old and if you contribute after you are 50 years old you will not receive the government bonus.
• The LISA can be invested in either cash or stocks and shares.

Junior ISA

• Act as long-term, tax-free savings accounts for children.
• Your child must be under 18 and live in the UK.
• If the child lives outside the UK, you must either be a Crown servant or the child depends on you for care.
• You can’t have a Junior ISA as well as a Child Trust Fund.
• The savings limit for Junior ISA for the 2018/2019 tax year is £4,260
• You can invest into cash or stocks and shares.
• Control of the account will be transferred to the child when they reach 16, but they can’t withdraw the money until they turn 18.

CONTACT US

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used. 

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No Will…but there is a Way !

What is deed variation and how can it help reduce inheritance tax?

Amazingly over 60% of people in the UK don’t have a Will in place. Poor estate planning could result in the Government taking a sizable chunk out of the money you leave your loved ones. Estates liable for inheritance tax (IHT) must pay 40% before the remainder can be passed on, leaving many of us with a sour taste in the mouth. There is however, a way to ‘beat the taxman’ from beyond the grave. A deed of variation (DOV) is a legal document that allows the beneficiaries of an estate to make changes to the will, in the name of the deceased, after their death. What this means, is that changes can be made to make it more tax-efficient.

In the case that you are about to inherit a windfall that will take your own estate over £325,000 – the personal allowance above which 40% IHT applies on your death – you can alter the deceased’s will so that money you stand to inherit passes directly to other beneficiaries, reducing or eliminating the amount of tax you would otherwise have to pay later.

So, how does inheritance tax work?

Upon their death, each individual is taxed at a rate of 40% on all their assets above a threshold of £325,000. The following things are subject to the tax:

• Cash
• Investments
• Property
• Vehicles
• Life insurance payouts

Main residence for “family home allowance” is in the process of being phased in until 2020, applying to a family home going to direct descendants only. Ultimately, this means that married couples will be able to use their combined allowances to pass estates worth up to £1m onto their direct descendants.

What are the rules?

• Any deed of variation must be drawn up within 24 months of the death of the deceased, and must be signed by all the executors and beneficiaries of the estate to be valid.
• A DOV is separate from a grant of probate – the legal document that allows you to gather up and distribute the assets of the deceased – and can be obtained before or after probate is granted.
• There are no formal documents to apply for; you can simply write a letter explaining the changes you wish to make. However, you must ensure the letter meets certain conditions – Her Majesty’s Revenues and Customs provides a checklist.
• Provided everyone else involved agrees, you can redirect your inheritance to anyone you wish, even if they are not named in the deceased’s will.
• Although you may be the one deciding what changes to make, through a DOV the changes are made in the name of the deceased as if they were making the changes themselves.
• If a variation affects anyone under the age of 18, you will need court approval before making any changes.
  Extract: The telegraph

The next step…

Contact Ascot Estate Planning to get expert advice on setting up a Will or checking your IHT situation from Ascot Estate Planning Team.

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used. 

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Can we help you find your lost or forgotten pensions?

We all lead busy lives and sometimes it’s hard to keep track of everything, especially if it’s not something we deal with on a day-to-day basis. Pensions are just too important to forget about.

If you think you may have ‘forgotten’ pensions from previous employers…or want help and advice tracking these down for possible transfer into your main pot – read below!

• There are three billion pounds sitting around in unclaimed pensions in more than a million accounts. Don’t let your hard earned money be part of it.
• With each of us now working an average of 11 jobs a lifetime it’s more likely than ever we will build up a number of different pension funds.

Two recent “lost” successes:

First case:
When a 63-year-old client mentioned at their review meeting they had worked as a secretary from 18 -23 she thought she may have paid a small monthly amount into a company pension fund.

Result: Because she had married and moved a few times the pension company had lost contact with her. We did track down the pension scheme and she was entitled to £135 per month back to her 60th birthday.

Second case:
Another client, again after a review meeting, dug out some old paperwork which looked like he had paid into a pension when working for a company 30 years ago. He tried three times himself to get questions answered…every time they inferred that there was no money due. So he passed this over to our AWM Team.

Result: We pursued this and have recovered a £130,000 pension pot.

Don’t put it off any longer, contact us today!

CONTACT US

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used.