Buy to Let Property...big tax hike?

One of the dilemmas facing the new government is how to raise money by increasing taxes. Politicians do no like increasing income tax because it is unpopular.

One area which is being considered is Capital gains Tax which affects Buy to Let Property amongst other things. It is being suggested that the tax on the profits of selling such a property could be raised from 18% to 40 or even 50%.

It is one area where it could be vital to talk to a financial planner.

Posted by Sean Wilson, APFS, Independent Financial Advisors (IFA), Swindon, Wiltshire.

How do the markets affect us?...pensions

Over the past week, we have had journalists, politicians & academics talking about...the markets.

So, how do the markets affect us?

The most direct way is a fair portion of people's pension money will be invested in UK shares. So if shares rise, your pension can go up, if they go down your pension value goes down.

If your pension has been invested in UK shares, your pension has probably  gone nowhere in the last 10 years.If that is the case, it is worth taking advice from a professional adviser about how to spread the risk and diversify.


Posted by Sean Wilson, APFS, Independent Financial Advisors (IFA), Swindon, Wiltshire.

Your ISA Allowances

From 6th April 2010, everybody's ISA allowances rose to £10 200 a year.

That's £5100 in a Cash ISA....plus £5100 in a Stocks & Shares ISA.

Posted by Sean Wilson, APFS, Independent Financial Advisors (IFA), Swindon, Wiltshire.

How much can you earn without paying tax? (New Tax Allowances 2010-11)

Today is the first day of the new tax year (I got a tax demand for the previous one this morning!) 


How much can you earn without paying tax?


Up to 65 years old........£6,475
65-75...........................£9,490
75+..............................£9,640

Posted by Sean Wilson, APFS, Independent Financial Advisers (IFA), Swindon, Wiltshire.

Tax Free Cash...Pension Age Changes

This year you will have seen discussion about whether to take tax free cash from pensions, especially if the person is between 50 & 55.

The minimum age you can take pension benefits goes up from 50 to 55 on 6th April 2010.

This has prompted debate on whether to take tax free cash. Should you take it?

The answer is..it depends on your personal circumstances, tax status and your other assets.
It is a complicated issue.

Please do not take the decision without taking professional advice, it could save you £1000s.....

Posted by Sean Wilson, APFS, Independent Financial Advisers (IFA), Swindon, Wiltshire.

Low Key Budget

Yesterday Alistair Darling delivered the 2010 budget. It was very low key.

The highest profile change was abolishing stamp duty (for 2 years) for first time buyers buying a property under £250 000; the money will be recouped on a higher charge on £1 million plus properties.

More thoughts are in a column I wrote for the Swindon Advertiser.

Long Term Care: rather complex

In recent weeks various political parties have put  forward their proposals on long term care in England & Wales. (rules are different in Scotland)

What is Long term Care?

When a person is too old & frail to look after themselves, they may need to go into a care home. The main concern of individuals has been whether they would need to sell their home to pay for care.

The rules are very complicated  & vague. However a couple of general points can be made. 

1. You do not need to sell your home if your spouse is still resident there & over 60.
2. You start to get help with fees when your income is under £23 000 (2009-10)
3. Attempts to hide assets are penalised eg transferring money & assets to children or grandchildren

It is a specialist area and it worth consulting an expert financial adviser with experience in this area.

Posted by Sean Wilson, APFS, Independent Financial Advisers (IFA), Swindon, Wiltshire.

Beware...Banks...bad mortgage advice offered?

Banks, are they acting in mortgage customers' best interests?

When you come a off fixed rate mortgage you go onto a lenders' Standard variable Rate (SVR). This should be substantially lower than what you are paying now.
However some banks are trying to get clients to take out a new deal which is much higher than the SVR.

Depending on when your mortgage lapsed, the rate could be as low as 2% with Nationwide

Many banks have the SVR very well hidden on their websites. I had to call Nationwide to get details.

If you are not sure what to do call an Independent Financial or Mortgage Adviser and they can investigate.

The Financial Mess at Manchester United

A few years ago Manchester United were probably the most profitable football club on the planet.                

Recent revelations have shown the takeover by the US based Glazer family has been disastrous.

The family bought the company via credit and saddled the club with the bill. The debt is £700 million and interest is paid at 10%. On one part the pay a hedge fund 14%.

The £80 million Real Madrid paid for Cristiano Ronaldo is being used to pay the debt.

To try to bring down the debt, the Glazers want to sell Old Trafford & the training ground and lease it back.

Unrest amongst supporters can only increase...

How well qualified is your financial adviser?

A question you might want to ask anybody who gives you financial advice is, "How well qualified are you? Do you have higher qualifications or the bare minimum?"

In a few years' time every financial adviser will have to have a higher level qualification. This will apply to banks multi-tied advisers (who can only advise on a limited range of products & services) and Independent Financial Advisers (IFAs). The most common option is the Diploma PFS. (DipPFS)

Ideally your adviser will already have this or be well on the way to getting it. If not, ask why!

10 Tips to Make You Richer in 2010

1 Pay off your debts. Those credit cards & personal loans are very expensive. The cost of borrowing money is much more than you get from a savings account.

2 Use your ISA allowances. Nobody likes paying tax, why pay it on your savings? Don't forget about the Investment ISA too.

3 Be careful who you take advice from. Ask the person, "Are you Independent & Impartial?" "What are your qualifications, the bare minimum or something higher?"

4 Insure your most valuable asset. People insure their cat, dog and mobile phone and forget about the most important thing....themselves. What happens if you lose your job or cannot work because of illness?

5 Save in a pension. They are simply long term savings plans with tax advantages. Why pay out money in income Tax & National Insurance? A pension allows you to keep & invest that money.

6 Over pay your mortgage. Most lenders allow you to pay off up to 10% of the mortgage amount each year. It saves you money in interest and shortens the time you have your biggest debt.

7 Avoid anything which seems too good to be true eg rates from Icelandic banks or current accounts which pay you 6% and levy hefty monthly charges.

8 Do not get obsessed with property. A large part of people's wealth in tied up in their house, buying more puts all your eggs in one basket. Consider alternative forms of investment

9 Transfer assets to a partner. Often one partner will pay less tax or have unused allowances.

10 Spend some money, you will have some fun & it will help the economy


As featured in the Swindon Advertiser 23 December 2009.

What is the Pre Budget Report?

On Wednesday 9 Decemeber 2009, Alistair Darling delivers his Pre Budget report.
But what exactly is it?

It's a half time report on how the government is doing meeting its financial commitments.
It should be interesting in a time of decreasing tax revenue, government debt, unemployment and an election within 6 months.

To be continued....!

****************************************************************************
As it turned out, there were few changes.
A few extra taxes on City fat cats' bonuses & pensions, a bit on national insurance and VAT & stamp duty on house purchases.
For further details see my article for the Swindon Advertiser.
http://www.wiltshirebusinessonline.co.uk/news/latest/4785410.print/

What happened in Dubai?

Last week there were sensational stories about financial collapse in Dubai.

What actually happened?

Dubai has set it elf up as a financial centre and simply there was overexpansion, over investment, unoccupied office towers and empty shopping malls. There was nothing to sustain development. Unlike its neighbour Abu Dhabi, it has no oil wealth or natural resources.

A source there noted that one of the reasons for the flow of money into Dubai was that banks did not ask too many questions about the origin of the money....

Bigger ISAs for over 50s

Over 50s now have bigger ISA allowances.

It's £10 200 in total, with a maximum of £5 100 in a Cash ISA. You can also invest in an Investment ISA..£5100 if you have used your Cash ISA allowance or the full £10 200 if you have not.

The returns from a cash ISA are not that great at the moment, so it may bve worth looking at the Investment ISA option depending on your attitude to risk & investment period.

The limits for under 50s will be increased to the same for over 50s on 6th April 2010.

As always, seek proper independent advice.

Posted by Sean Wilson, APFS, Independent Financial Advisers (IFA), Swindon, Wiltshire.

Will I get a mortgage?

The answer is maybe...

It depends on how a lender sees you as a financial risk. It's much more difficult than the pre-credit crunch days of 2 years ago.

The outcome will depend on

1 Your salary
2 Your outgoings
3 Existing credit commitments
4 Past credit history
5 Size of deposit you can put up

#4 is particularly important. People always look surprised when I reveal to them a lender will be reluctant to give them them £150 000 because they struggled in the past to pay a relatively small credit card or mobile phone bill!

Big salary, low level of outgoings, decent sized deposit.....no problem
Low salary, big outgoings, big debts, no deposit...no comment.

It's worth remembering, the credit crunch began when US banks lent to people who could not afford to make repayments....

Posted by Sean Wilson, APFS, Independent Financial Advisers (IFA), Swindon, Wiltshire.

Vulture & Zombie Pensions

Vulture companies & Zombie pension funds have been in the news again recently..what are they?

A vulture company takes over old pensions and makes a very healthy income from doing nothing much with them. The client still pays a management fee and the company provides an understaffed call centre.

A zombie fund is one that is barely alive...nobody has shown an interest in it for some time and nobody seems to care if the clients money is doing anyhting.

What pension companies are often mentioned in this context?

Pearl, Resolution & Windsor Life. Resolution have just bought Friends Provident.

What should I do if I have a zombie fund?

Speak to your local friendly IFA :)

Posted by Sean Wilson, APFS, Independent Financial Advisers (IFA), Swindon, Wiltshire.

Northern Rock...the mess continues

Nationalised bank Northern Rock announced losses of half year losses of £725 000 000. 22 000 of its mortgage customers are in arrears and 40% of their customers suffer form negative equity.

This is the consequence of Northern Rock's expnasion programme which involved lending to high risk groups of borrowers with 100%+ mortgages.

Not surprsingly Alistair Darling said he was in "no hurry" to try & find a buyer for the ailing bank.

Posted by Sean Wilson, APFS, Independent Financial Advisers (IFA), Swindon, Wiltshire.

Dead Cat Bounce

What is dead cat bounce? A term much used in financial circles these days.

It means that after a large fall in a share price or stock market it can be expected to recover.

It comes from the idea that "even a dead cat will bounce if it falls from a great height".


Posted by Sean Wilson, APFS, Independent Financial Advisers (IFA), Swindon, Wiltshire.

Disappearing Banks

In the aftermath of banking collapses & mergers, there will quite a few bank closures on high streets of Swindon & beyond.

Cheltenham & Gloucester will disappear as a high street presence with the closure of 164 branches with the loss of 833 jobs.

The new Lloyds Banking group now owns the former Halifax Bank of Scotland branches too.

Santander, the Spanish bank now owns Abbey, Alliance & Leicester and Bradford & Bingley. It is likely that the branches in each town will be merged into one.

In Swindon, we have already seen the closure of Portman and Woolwich branches due to mergers in recent years.

Posted by Sean Wilson, APFS, Independent Financial Advisers (IFA), Swindon, Wiltshire.

"An End to Boom & Bust"....

It was Gordon Brown's famous pronouncement in 1997 & over 100 times since. It worked until 2002, the economy was doing well and he kept spending under control as chancellor. 25% of the tax the Treasury received in Corporation Tax (the tax companies pay on profits) was from the City of London

After that things started to unravel, public spending increased dramatically partly because of the cost of wars in Iraq & Afghanistan.

In 2007, the economy started to falter and the model started to falter....


Posted by Sean Wilson, APFS, Independent Financial Advisers (IFA), Swindon, Wiltshire.