Throughout your lifetime, you will have a variety of savings and investment requirements. Whether you need to build up savings for a later date, you have existing capital to invest or you would like to save for your children, you will need an investment approach to suit your financial objectives from a qualified and experienced Independent Financial Adviser.
Helping you strike the right balance between investment returns and long-term security through asset allocation, is a key factor for me as an Independent Financial Adviser. As an experienced and friendly Independent Financial Adviser based in Solihull I relate each client's investment strategy (including ethical investment concerns) to their individual financial objectives, priorities and assessed attitude to investment risk. Taking this into consideration, I research and develop a tax-efficient investment portfolio incorporating a variety of financial products including Cash ISAs, Stocks and Shares ISAs, Investment Bonds, Unit Trusts, Open Ended Investment Companies (OEICs), Structured Investments and Pensions.
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It's ISA Season - Use it or Lose it!
Are you taking advantage of your ISA allowance?
Introduced in 1999 by the government, an Individual Savings Account (ISA) protects your savings from income and capital gains tax. With a standard bank or building society account, taxpayers are usually liable to pay tax on interest received. Similarly, income and profits from stock-market investments (whether they are directly held or through collective schemes) are also expected to pay tax.
ISAs protect your savings by acting as a kind of wrapper. This allows individuals to invest money every year (up to the annual ISA allowance limit) and pay no personal tax on the profit and/or income received. As an added benefit, you do not even need to declare ISAs on your annual tax return. If you are looking to invest for the first time, or if you already hold ISAs it is likely that you will benefit from impartial ISA advice to find out if you are receiving the best rate of return for your ISA.
A Stocks and Shares ISA is a tax wrapper for collective investments such as Unit Trusts, Open Ended Investment Companies (OEICs) and Investment Trusts as well as a tax wrapper for structured investments. With thousands of different funds to invest between, I would develop an investment strategy to coincide with your attitude to investment risk and financial objectives to maximise your potential growth, through a diversified investment portfolio.
ISA's Have Changed!
In an attempt to simplify the ISA structure, the following changes took place from 6 April 2008:
- New subscription limits – For anybody who is eligible for an ISA, the ISA allowance increased to £10,680 from 6 April 2011 and is due to increase again each tax year in line with inflation. Similar to the previous ISA structure, each person's ISA allowance incorporates upto £5,100 into a cash ISA and the remaining into a stocks and shares ISA.
- Removing Mini / Maxi distinction – This simplifies the ISA structure by having one ISA made of cash and stocks and shares elements.
- Allowing cash ISAs to be transferred to stocks and shares ISAs – This was intended to encourage share ownership for individuals. It also provides increased flexibility for both new and existing investors.
- Bringing PEPs within an ISA wrapper – Personal Equity Plans (PEPs) ceased to exist and were transferred into a new or existing stocks and shares ISA.
- Junior ISAs – The Junior ISA is also being introduced from 1 November 2011 to help save for any children not eligible for a Child Trust Fund and will operate on a similar basis to standard ISAs with cash and stocks and shares elements and a total overall allowance of £3,600 per year.
Investment Bonds
There are other ways of investing to provide capital growth or income, with one of the most popular types being an Investment Bond. One of the main attractions of an Investment Bond is the '5% rule' which allows you to withdraw up to 5% of the value of your initial investment amount per year tax free. As long as you are not a higher rate taxpayer when the investment bond matures or is surrendered, you are able to withdraw your original capital after 20 years with no further tax to pay. If you take more than 5% per year of the amount you personally invest into the investment bond you may have a tax liability.
Investment Bonds can be important for Inheritance Tax Planning, however it is important that people seek independent financial advice when considering Inheritance Tax Planning. If your net assets are above £325,000 (for the 2011/12 tax year) your estate could face a 40% tax charge. If you feel this may effect you, in order to reduce your inheritance tax liability Click Here For A Free Financial Consultation .
Her Majesty's Revenue and Customs (HMRC) currently allows unused 5% allowances to be accrued over the term of the bond. If you decide to fully surrender your bond or any of its policy segments, your 5% cumulative allowance will be taken into account to determine whether a tax liability arises.
The implications of the recent changes to Capital Gains Tax (CGT) has caused some concern about the long term benefits of investment bonds when compared with unit trusts, open ended investment companies (OEICs) and investment trusts. However, the most suitable recommendation will always depend on each persons circumstances, financial objectives and assessed attitude to investment risk.
If your investment portfolio already includes one or more investment bonds (including with-profits bonds) and has not been reviewed for a number of years, or if you have any concerns about the long-term prospect of your investments, you are likely to benefit with an investment bond review from an Independent Financial Adviser.
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