All Insights | Ascot Wealth Management

June 6, 2019January 31, 2022

Tax Talks With Greg – Tax Allowances for 2019/20

Tax Allowances for 2019/20

We wanted to simplify the tax changes and allowances for you so here’s one easy place to look.

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Dividend tax rates

There is no change to dividend tax rates in 2019/20:

The tax-free dividend allowance is £2,000
Basic-rate taxpayers pay 7.5% on dividends
Higher-rate taxpayers pay 32.5% on dividends
Additional-rate taxpayers pay 38.1% on dividends.

Pensions contributions receive full income tax relief, this means it only costs basic rate taxpayers £80 to save £100 (20 per cent tax relief) while higher rate taxpayers only need to pay £60 to save £100 (40 per cent tax relief).

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.

May 14, 2019January 31, 2022

Another winner at Ascot?

It’s been quite a year so far. Earlier this year Ascot Wealth Management was named Adviser Firm of the Year (South East). You can read all about it here. Of course we were thrilled to be recognised for such a prestigious award. Since then we have been growing from strength to strength and have some more exciting news to share with you.

We are delighted to announce that AWM is in the running for the prestigious Retirement Planner Awards 2019 in the Best Individual Pensions Advice Firm of the Year*, Best Pension Freedom Service categories and our own Catriona McCarron is shortlisted as a candidate for Young Retirement Planner of the Year in the UK** award.

The awards aim to highlight the importance of retirement planning in the UK and celebrate how role providers and intermediaries are rising to the challenge of pension provision. Particularly in light of the 2015 pension freedoms and the increasing number of pension scams.

This nomination is as one of the finalists is a real testament to all the hard work AWM put in both collectively and individually every day.

The winners will be announced on Friday 14th June 2019 in London.

If you need pension advice, don’t hesitate to contact us today. Remember, the initial assessment is free.

*London, the South East and East Anglia

** excluding London

March 14, 2019January 31, 2022

Caught in the tax trap?

You got a pay raise and your salary is now on the threshold of the 40% tax rate. How do you avoid the potential tax trap?

Luckily, it may be possible to avoid it after all because any contributions you make into your pension are deducted from your salary before you are taxed. In other words, your taxable salary is reduced.

Example 1

Sally earns a gross salary of £50 000. On this salary, she pay basic rate tax of £6 900 and higher rate tax of £3 650. If Sally was to make a pension contribution of £3 650, her gross taxable income would reduce to £46 350 saving her £1460 in tax thus avoiding the tax trap.

Total tax savings after pension contribution = £1 460 (40% tax trap).

Example 2

Barbara earns a gross salary of £110 000 and is a Higher Rate Tax payer

Barbara contributes £10 000 of her salary to her pension on an annual basis reducing her taxable income to £100 000 per year. By doing this, she saves £6 000 on her potential tax bill of £34 360.

*Personal allowance of £6,850 due to the tapering of income above £100,000 (whereby you sacrifice £1 of personal allowance for every £2 of income until your personal allowance is £0)

Total tax savings after pension contribution = £6 000 (60% tax trap).

Remember that the Tax Year end is coming up on 5 April. Act fast so we can help you submit those tax returns!

Note: Don’t leave it until the last minute. Remember to allow 10 working days to get funds in place.

March 8, 2019January 31, 2022

In the spotlight – adviser, Catriona McCarron

With it being International Women’s day today we thought it would be a good idea to shine the spotlight on adviser, Catriona McCarron. She was recently nominated for the 2019 Women in Financial Advice Award; the awards are designed to celebrate women in finance as women are still heavily outnumbered 1 to 6 in the industry. This nomination comes less than a month after Ascot Wealth Management took home the 2019 Professional Adviser Firm of the Year Award for the South East.

When asked why she chose to become a financial adviser she said “I chose this profession for the opportunity to make a difference on the ground level. With both my parents in finance I’ve been brought up with a positive attitude towards financial education, which gave me a constructive outlook to cash management from a young age. Financial advice is a career path paved by a certain generation, therefore I wanted to come into the sector with a fresh mind and greater my understanding of how clients benefit from reviewing their assets.”

We asked her a few more questions:

What was one of the most defining moments in your career?

I was recently named one of The Times top 250 advisers in the UK by VouchedFor, a site similar to Trip Adviser for financial services. This was a defining moment for me because it showed I’m on track to continue making a positive impact on my client’s finances. In the same week as my VouchedFor recognition in The Times, AWM won top Financial Adviser Firm in the South East, an award previously won by firms with a huge industry presence. This was a defining moment as it reminded me why small firms have a place in the industry.

Who do you most admire in life and why?

My admiration will always be for my parents. They’ve inspired me to follow my dreams and assisted by studies to get me there. In addition to recognising the role my parents have played in getting me where I am today, it’s also important to be influenced by other women leading the way in Finance. At university my dissertation focus was on Women on FTSE 100 boards, exploring whether the low levels of female presence was due to social or policy factors. During my research I became motivated by the women standing up to male board pressure. One of the women I particularly admired was Carolyn McCall, CEO of EasyJet since 2010. Carolyn has three teenage children and a healthy social life, whilst working to change business culture to be inclusive for all.

If you could witness any event of the past, present, or future, what would it be?

Sensibly speaking I would fast forward two years to see the full effects of Brexit to give greater clarity to my clients current planning! I would also like to sit as a fly-on-the wall for Theresa May’s discussions, maybe chipping in if allowed…

Happy women’s day to you all!

Who you are tomorrow begins with what you do today – Tim Fargo

March 4, 2019January 31, 2022

If you lived to be 90, will your pension be sufficient?

According to the Office for National Statistics the average life expectancy at birth for a UK male is 79.2 and 82.9 for their female counterparts. However, in 2017 alone there were 579 776 people aged 90 which begs the question, will your pension be enough if you lived to be 90?

Saving plans, such as pensions, were developed in another time when the typical retirement might only last a decade. Since the introduction of a UK state pension in 1908, life expectancy has increased by 36 years due to scientists tackling life shortening diseases yet the retirement age has barely changed.

Some help is available already – the government is offering a generous tax relief on pension contributions while employers will save on your behalf. It is important to start saving as early as possible as for each year you delay saving for retirement, or don’t save enough, the proportion of your annual earnings you’ll need to put aside for your “golden years” will increase.

What are your options? You can start investing into a pension scheme today and make regular contributions to it or you can also look at investing into an investment scheme that suits your risk appetite to supplement your pension income.

The good news is you don’t have to find retirement solutions by yourself, contact us for your free initial meeting today.

February 13, 2019January 31, 2022

And the winners are…

Mark Insley AWM’s CEO pictured centre and AWM’s Catriona McCarron to his right

We are delighted announce that, after being shortlisted in the Professional Adviser Firm of the Year, AWM have been chosen as the (South East) 2019, winner! It was announced on Thursday night at an awards ceremony in London.

We are thrilled to be recognised for such a prestigious national award.

In total, the services and products of more than 200 advisers and other businesses were under consideration for the 2019 Professional Adviser Awards to reward excellence both within the financial advice community and among the broader financial services sector.

A huge thanks to our talented AWM team; without them none of this would have been possible. And of course, not forgetting the loyalty, trust and support of our clients.

Many thanks for all the congratulatory emails from those who have already heard this great news.

February 6, 2019January 31, 2022

What to do with a sudden windfall

When you receive a sudden windfall of money from inheritance, a gift, or for some lucky individuals out there, winning, the extra cash creates an opportunity for you to improve your financial situation. There are several steps you can take to preserve your new found wealth and potentially set yourself up for life goals or early retirement.

Determine the tax implications

The very first step should be to consider the tax implications. Speak to your financial adviser to determine the most tax-efficient strategy.

Set up a FUNd (a small portion for fun!)

Set aside a small percentage for your enjoyment or entertainment. Generally this should not be more than 10-15% of the money.

Set up a Financial Plan

Before you make any big decisions, create a Financial Plan for this money. If you’ve already done this, consider updating your financial goals.

Create or update your Estate Plan

A sudden windfall is the perfect opportunity to review your Estate Plan to make sure that your money will be distributed exactly according to your wishes upon your death…and as tax efficiently as possible.

Create an Emergency Fund

An Emergency Fund is traditionally 3 – 6 months worth of your salary. This money should be put in a high yield savings account, and the money should only be accessed for true emergencies such as job loss or a medical emergency. Remember to always replenish it after you have dipped into your Emergency Fund.

Pay off or consider buying a house

If you don’t already own a home, this money may make an excellent deposit. If you purchase the house outright and have some funds remaining, consider investing the money you would’ve spent on regular mortgage payments elsewhere.

Speak to one of our financial advisers today to help you on your financial journey!

January 21, 2019January 31, 2022

Tax Year End is Fast Approaching

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

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.

December 6, 2018January 31, 2022

AWM a finalist for “Adviser Firm of the Year” award

We are delighted to announce that Ascot Wealth Management is in the running for the prestigious Professional Adviser Awards 2019 in the Adviser Firm of the Year category.

The Professional Adviser Awards, now in its 14^th year, seek to reward excellence both within the financial advice profession and broader financial services sector. This nomination as one of the finalists is a real testament to all the hard work that AWM put in both collectively and individually every day.

The regional winners will be announced at a black-tie ceremony in February, next year. Later that evening the overall national winner will be picked from among the eight regional winners.

For the full details on the 2019 Professional Adviser Awards click below…

Professional Adviser Awards

Share our good news

November 27, 2018January 31, 2022

Whatever your age…the importance of making an Annual Financial Plan

Whatever your age…the importance of making an
Annual Financial Plan

Even if you feel fairly confident about the way you’ve been handling your finances so far, understanding how you can use an annual financial plan to your advantage can help you make smarter decisions with your money going forward.

Your starting point may differ depending on your age, income, debts and assets – however the most important components of an annual financial plan are the same. This is what you need consider when making your annual financial plan:

Life Events

Reaching certain milestones, such as getting married or having a baby, are obvious reasons to reshape your financial plan. For example, a twenty-something my want to focus on saving for a deposit on a first home, while a young family may want to look into the future to save up for their children’s schooling or university.

Retirement and Investing

Actually, saving for retirement should be a top priority at any age; however, this gets pushed to the back burner far too often. By saving for your retirement in an ISA or a pension plan you can enjoy real tax advantages. If you’re not able to save in an employer-sponsored retirement account, a stocks and shares ISA is an option you can consider.

A general rule of thumb is a percentage of salary equal to half your current age if you want to have half your salary paid as a pension by your mid-60s.
A 20-year-old needs to save 10% a year, whereas someone starting to save at 50 would need to put aside 25% of earnings on a regular basis.

Read those two lines again… A bit daunting given other demands on income.

Saving for emergencies

Again the general rule of thumb for an emergency plan is 3-6 months worth of expenses in that ‘rainy-day-fund’. If you don’t have an emergency savings buffer yet – or yours isn’t as big as you’d like it to be – then starting one or beefing it up are items you should add your financial to-do list moving forward.

Work on building Alternative Income Streams

Developing an additional income stream for retirement beyond tax-advantaged and taxable investment accounts is a must. Investing in a rental property and becoming a landlord can provide regular income if you’re concerned about not saving enough for your later years. Looking for ways now to maximize your income later is a must.

Saving Goals

Your annual plan should include your outlook on the future – What do you want to accomplish in the next 12 months? With regards to what you want to save and where you should be putting that money. By starting with the total amount and then breaking it down in a monthly or weekly basis can make achieving your goal easier.

In Conclusion

Creating an annual financial plan may be time-consuming and may require you to face up to some financial realities that you’ve been avoiding, but it is well worth it in the end. Once your plan is completed, you can begin taking specific steps to ensure that your financial house is in order and running smoothly.