Wills this is one matter that will not go away.

January 4th, 2009 richard Posted in News - Updates | Comments Off

So what, I don’t need a Will, you had better read on.

If you’re married or in a civil partnership and your estate is worth £125,000 or less

Everything goes to your husband, wife or civil partner.

If you’re married or in a civil partnership and your estate is worth over £125,000

Your husband, wife or civil partner won’t automatically get everything, although they will receive:

  • personal items, such as household articles and cars, but nothing used for business purposes
  • £125,000 free of tax or £200,000 if there are no children; however this is restricted to £55,000 if you were domiciled (had your permanent home) in the UK and they were not
  • a life interest in half of the rest of the estate (on his or her death this will pass to the children or as detailed below)

The rest of the estate will be shared by the following:

  • children (or if none, grandchildren) will get an equal share
  • if there are no children or grandchildren, surviving parents will get a share
  • if there are no children, grandchildren or surviving parents, any brothers and sisters (who shared the same two parents as the deceased) will get a share (or their children if they died while the deceased was still alive)
  • if the deceased has none of the above, the husband, wife or registered civil partner will get everything

If you are partners but aren’t married or in a civil partnership

If you aren’t married or registered civil partners, you won’t automatically get a share of your partner’s estate if they die without making a will.

If they haven’t provided for you in some other way, your only option is to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975. See the section below ‘If you feel you’ve not received reasonable financial provision’.

If there is no surviving spouse/civil partner

The estate is distributed as follows:

  • to surviving children in equal shares (or to their children if they died while the deceased was still alive)
  • if there are no children, to parents (equally, if both alive)
  • if there are no surviving parents, to brothers and sisters (who shared the same two parents as the deceased), or to their children if they died while the deceased was still alive
  • if there are no brothers or sisters then to half brothers or sisters (or to their children if they died while the deceased was still alive)
  • if none of the above then to grandparents (equally if more than one)
  • if there are no grandparents to aunts and uncles (or their children if they died while the deceased was still alive)
  • if none of the above, then to half uncles or aunts (or their children if they died while the deceased was still alive)
  • to the Crown if there are none of the above

It’ll take longer to sort out your affairs if you don’t have a will. This could mean extra distress for your relatives and dependents until they can draw money from your estate.

If you feel you’ve not received reasonable financial provision

If you feel that you have not received reasonable financial provision from the estate, you may be able to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975 - applicable in England and Wales. To make a claim you must have a particular type of relationship with the deceased, such as child, spouse, civil partner, dependent or cohabitee.

Bear in mind that if you were living with the deceased as a partner but weren’t married or in a civil partnership, you’ll need to show that you’ve been ‘maintained either wholly or partly by the deceased’ - this can be difficult to prove if you’ve both contributed to your life together.

You need to make a claim within six months of the date of the Grant of Letters of Administration.

This is quite a complicated area and a claim may not succeed. It’s advisable to ask a solicitor’s advice. They would charge for this service.

Inheritance Tax and your will

If you leave everything to your husband, wife or civil partner

In this case there usually won’t be any Inheritance Tax to pay because a husband, wife or civil partner counts as an ‘exempt beneficiary’. But bear in mind that their estate will be worth more when they die, so more Inheritance Tax may have to be paid then.

However, if you are domiciled (have your permanent home) in the UK when you die but your spouse or civil partner isn’t you can only leave them £55,000 tax-free.

Other beneficiaries

You can leave up to £300,000 tax-free to anyone in your will, not just your spouse or civil partner (tax year 2008-2009). So you could, for example, give some of your estate to someone else or a family trust. Inheritance Tax is then payable at 40 per cent on any amount you leave above this.

You can download our Will Instructions here

AddThis Social Bookmark Button

2009 is now with us

January 2nd, 2009 richard Posted in News - Updates | Comments Off

For me it was peaceful and meditative Christmas and New Year Period, and the end of  a pretty interesting 2008, if only we could have seen it coming. Of course the warnings were there for us or were they. This of course is one debate that will continue for sometime  I am sure.

So what to do for this year, we have seen OPEC start to cut production of Oil, however the good news is that Honda are well on the way to producing a Hydrogen Car, which will of course change everything. I am sure there will be some downsides to using this as a fuel, but as we have proven  in the past mankind should survive!

What do this mean for the bigger picture, looking forward. Well we are likely to see some more volatility in investments markets (no surrpise there) and with the Government not really making much sense with it’s Management of the Ecomomy (despite their assurances  I doubt if the opposition would have done much different). The Enviroment is and will be a real adgenda item and we must start to learn our lessons.

My thinking is that we could see a difficult year ahead, so batten down the hatches, proceed with caution and ensure that you review, check alter and adapt all of your plans that are in place. Get rid of any “spare luggage of life” from a Financial Perspective and move forward, lighter with a Plan.

Review the following as soon as possible.

Electricity and Gas Suppliers (LINK)

Credit Cards and Loans (LINK)

Mortgages and other Financial Commitments, Life Assurances and other Protection Plans (contact me)

Vehicle Finance (LINK)

For Business Customers it’s very much the same, only with more urgency.

In simple terms much the same as 2008.

I for one am positive in relation to  where I am  with my business, and will be on hand to provide you with the support and guidance required.

So here’s to a great 2009.

Richard Smith

Independent Financial Adviser

0800 781 2031

AddThis Social Bookmark Button

Housing Market Plummet

December 20th, 2008 richard Posted in News - Updates | Comments Off

Sorry, to bore you with a headline from one of the tabloids, but it seems the Housing Market may well be showing a glimmer of hope. My thinking is that once we see some sense back in the Mortgage Market we will see normality return. However like  all Bargain Hunters, the First Time Buyers could save the Housing Markets proverbial bacon.

First Time Buyers are back, well kind off.

Happy New Year and a Great Christmas.

Richard Smith

0800 781 2031

AddThis Social Bookmark Button

Credit Crunch - Recession

December 19th, 2008 richard Posted in News - Updates | Comments Off

It seems that the High Street is not affected. I have one comment ’smoke and mirrors’.

Further detail from the Times.

Richard Smith

Independent Financial Adviser

0800 781 2031

AddThis Social Bookmark Button

US Interest Rates - whoops

December 18th, 2008 richard Posted in News - Updates | Comments Off

Whilst I usually avoid any immediate comment to change I felt that this was worthy of a quick update.

Now from my simplistic perspective what has happened in the US is is a hope by the Federal Reserve that it will  hope  to put the economy over there back on some kind of even keel. Interest Rates have been set at  between 0% and .25% which is of course a record. Now it seemed not to work in Japan in the 90’s but I clearly think that this is the right thing to do, it seems. As we all know though, hope is not a plan!

It also looks like the Bank of England will be cutting rates sometime soon, and it course remains to be seen what effect this will have.

Importantly much of the UK Banking Sector is now owned by us the Taxpayer, and the greatest impact on the UK Personal Finances are the cost of Housing, Mortgages in particular. So some pressure to bear on them to reduce Mortgage Rates would make more sense. Especially as they are likely to need more money from us over the coming months.

Whilst I agree that Depositors are not happy with lower interest rates and for good reason, it would seem that there will be more pain and for a lot longer if we continue to to keep rates artificially high.

John Major (former PM) and Wizard of Economic Management has also advocated more Tax Breaks to help out. Will be interesting to see how much he is listened to. After all, his Bedroom Partners we not chosen at all wisely (IMHO).

So what to do, well fundamentals of planning have not changed, spend less than you earn, focus on the medium term, manage your taxes, invest wisely and hold on as it could be a rough ride.

Richard Smith, Independent Financial Adviser

0800 781 2031

AddThis Social Bookmark Button

A Christmas Message

December 11th, 2008 richard Posted in News - Updates | Comments Off

To all clients old and new, I would like to wish you a healthy  and relaxed Christmas Period.

Please enjoy.

I look forward to speaking to you in the New Year

Richard Smith

AddThis Social Bookmark Button

Budget Update - Pre Budget Report

December 10th, 2008 richard Posted in News - Updates | Comments Off

As always  I will try and keep this as balanced as possible.

First Point which springs to mind is I hope for all us this plan works.

In simple terms the Chancellor could have had a word with all of the Banks and Building Societies and asked them to pass on the Full Interest Rate cut from last month, which would have given an immediate boost (before Christmas) to most borrowors. Cost to the Treasury - nothing.

He could have then reduced Fuel Duty, with the money saved.

Instead we have a little ill thought out tweaking, with massive costs to Industry for a little reduction in VAT.

Anyway with my gripe over, it seems like we are now back to a Traditional Labour Goverment, IMHO after 16 years we now have some truths, Tax the Rich, give it to the poor, but not all of it.

So opinion out of the way.

Pensions - Lifetime Allowances have been pegged get your Pension Checked NOW.

Discretionary Trusts - Small Increase in Taxation if you have one of these in place, take advice immediately.

Higher Rate Tax Payers  - will have more Income Tax Due on income from Stocks and Shares, etc, they are also having their Basic Allowances withdrawn slowly.

State Pensions - up slightly

Tax Credits  - up slightly

Lets hope this plan works.

As always if you have any queries or questions please call.

Richard Smith

Independent Financial Adviser.

AddThis Social Bookmark Button

Inside Track - I always said it was too good to be true.

October 20th, 2008 richard Posted in News - Updates | Comments Off

A little late I know, and with so much bad news around I thought a little more would not go amiss. (sorry and all that)

Whilst Inside Track is to be credited for some of the work it done, there are some fairly serious issues raised around it’s marketing and salesmanship.

So here is the news , and a link

AddThis Social Bookmark Button

September 16th, 2008 richard Posted in News - Updates | Comments Off

With so much bad news around I thought some positive opinions may help along with some further comment about Inheritance Tax and Intestacy.

Remember these markets  and situations do not always last, and we all knew that this so called ‘Credit Crunch’ was going to continue for some time.

It remains to be seen if there are going to be any further major failures in the Banking Sector, guess the response should be to “watch this space”. Many of the UK Retail Banks seem to be in good shape.

On a more positive note we have seen Short Term Fixed Rate Mortgages back to pre ‘Credit Crunch’ levels here in the UK, with many lenders more keen to lend than they have been, the Mortgage Market is still tight though.

So what to do, well there is a lot still to be done by many actions points below:-

Review Everything

Your Mortgage, Credit Cards, Loans, Insurances, Utility’s the lot. There is money  to be saved (made). There are still  Re Mortgage Products in the market place, however for many the Fee’s are proving to high.

Clear expensive Credit Card Debt first, ensure payments are made on time in order  to avoid Penalty Interest.

Savings - review your’s  as there are some very good Deposit Rates available from many of the High Street Firms.

Budget, back to basics on this one. Review all of your spending and determine where your Money is going. I recently reviewed my Sky Package and saved a massive £240 per year buy dropping a few unwatched channels, basic areas are Gym Memberships that are unused, and other Club Memberships that do not get the use you are paying for.  Mobile Phone Tariffs are another, I keep talking to people with many 1000’s of unused minutes when a simple ‘pay as you go package’ would work perfectly.

Investments, it’s difficult to see where Stock Markets could be heading. More uncertainty could cause further falls, however with Oil Prices falling dramatically in the past few weeks  and with  inflationary pressures still in the system but probably easing  we may see a cut in Base Interest Rates  which could help.

Intestacy (if you die without leaving a valid Will), with new limits and some slight changes to the rules around Not Having a Valid Will there is good news for those of you that have not considered this area of your planning. There is no excuse for not having a valid Will though.

The same applies to the issue of Inheritance Tax and the new “dual Nil Rate Band Allowance” which effectively allows you to pass on Twice the Nil Rate of £312k (Married or Civil Partners). The warning here is, this allowance is not what it seems, there is a good deal you need to evidence in order to claim the dual amounts and it is no good relying on the Solicitor that dealt with  Probate for your deceased partner as most of them do not keep records for long!

So what to do.

Review, Check, Alter, Adapt  and Prepare for what could be a bumpy ride over the coming few months, for me personally and professionally I think this will soon pass.

Let’s hope I don’t have to eat my own words.

If have any concerns queries or questions please do not hesitate to contact me.

Richard Smith

Independent Financial Adviser

0800 781 2031

AddThis Social Bookmark Button

Late July - Market Commentary

July 22nd, 2008 richard Posted in News - Updates | Comments Off

MARKET COMMENTARY by Richard Smith

Recent months have seen the arrival of a sobering, if not pessimistic, outlook settling over both global bond and global equity markets, in the face of decelerating economic growth and accelerating inflation.

Initially, in the second quarter, markets reacted positively to official efforts to stabilise the financial system, in the wake of the Bear Stearns debacle. There was a sharp rally in equity markets and a recovery in corporate bonds, particularly those issued by the banks. Banks set about raising additional capital to make up their losses and equip their balance sheets to resume normal lending, or so it was hoped. This positive interlude came to an end during May, when nervous investors began to decline the banks offers. The realisation that the recapitalisation of the banking sector would take longer than expected, exerting downward pressure on economic growth in the process was a major catalyst in the market about-turn. Money market conditions have still not returned to normal, with interbank lending rates remaining abnormally high. Banks responded to this raised cost of funding by rationing new lending and charging more for it.

The lenders of last resort, the central banks, were unable to react to this by easing monetary conditions further, owing to a sharp rise in inflation. The oil price rose by half in the first 6 months of the year, accelerating between March and June. The coincidence of rising oil costs with higher crop prices forced central banks to disappoint hopes of looser policies owing to the priority given to fighting inflation which has risen well above target levels. With a slowdown underway, driven by a contraction in credit, and rising inflation preventing the authorities from cutting interest rates, there is the fear of a return to the 1970s problem of “stagflation”. Although the downturn in growth is not yet as sharp as in the recessions of that era and inflation rates remain much lower, having to wait while one problem (inflation) is solved until the other (growth) could be addressed is unfamiliar and unwelcome.

Adding to the negative mood is the lack of control held over the main drivers of inflation, largely linked to rising commodity prices. Although developed economies are relatively economical users of commodities, the rise is a by-product of rapid industrialisation in economies such as China and India (directly increasing demand for oil and metals) with their resulting prosperity leading to increased food demand.

Until now, globalisation has been seen as relatively cost free for “western” economies, delivering supplies of ever-cheaper consumer goods, manufactured in emerging economies. Now, the pressure on resources from those countries’ rapid growth appears to have strained the capacity of the world’s mines, wells and fields. For example, of the 12m barrels per day rise in oil use since 2002, 11m barrels of that demand has come from emerging economies. Three quarters of the rise in production has come from OPEC, further increasing their market influence.

The oil price is a particular concern. Oil products have few substitutes in the short term so rises in their cost have to be offset by reduced spending in other areas. The rise in prices has therefore had the double negative effect of reducing spending power for consumers while preventing central banks from doing anything about it owing to the resulting hike in inflation.

EQUITY MARKETS

United Kingdom

The UK domestic economy has slowed significantly but, as above, the Bank of England is unable to offer assistance in the form of lower interest rates, as inflation remains above target levels. The domestic housing market finally ran out of momentum in late 2007 and has been falling since, affected by overextended prices and tightening of credit for new lending. This has made it more expensive for existing borrowers to refinance and reduced loan availability for new buyers. The resulting weakness in the housing market has fed into consumer spending, as the option of home equity withdrawal has all but disappeared, at the same time as consumers have faced soaring food and fuel costs. Although the economy is expected to continue to grow modestly (helped by a weaker pound), a rapid revival appears unlikely until existing consumer debt has been brought down or there is relief on the oil price front. The government’s finances are also stretched, although political pressures appear to be steering the government in the direction of larger deficits. The stock market has been distorted by the weakness of the major banks and outperformance of oils and mining stocks. Looking forward, it seems unlikely the market will make significant progress without a recovery in the sectors sensitive to the domestic economy.

USA

The US economy has continued to slow, while remaining clear of recession (just). Consumer spending is likely to find some support from tax rebates passed earlier in the year, although much of this will be spent on increased energy costs. With unemployment trending upwards, consumers might also adopt a more conservative attitude towards what they spend and save. The key to any adjustment remains the housing market, both for its direct effect on the construction industry and, as in the UK, for its bearing on the overall “feel good” factor for consumers. The indications are that the housing adjustment will be prolonged, with little improvement in 2008, due to a glut of unsold new homes and the tightness of credit availability. So, although forecast estimates for growth suggest this will be a relatively mild downturn, it could also be disappointingly long one. The political climate will heat up further this autumn during the presidential contest with the possibility of significant policy changes. Investors may have to factor in the risk of a less business-friendly and/or a more protectionist government.

Europe

European economies have clearly slowed this year, influenced by slowing global growth, the strength of the Euro and the vulnerability of some economies to the ructions in financial markets. The European Central Bank has stuck to its task in prioritising the control of inflation, despite political pressure to cut interest rates to alleviate the growth pressures. With the additional impulse of the rise in oil prices in the early summer, there is even the possibility of higher rates in the coming months. The ECB is standing firm against the deceptive benefits of stimulating growth when inflation is rising and, hugely uncomfortable as it is for politicians, the experience of the 1970s suggests this approach has merit. With slowing growth, the pressure on resources that lies at the heart of inflation should abate. In the meantime, European companies are likely to be under greater pressure than competitors in countries with more competitive currencies, such as the US and Japan.

Japan

The Japanese economy has weakened in response to slower global growth, although seasonal adjustment of the first quarter growth figures presents a more optimistic picture. Japan has an interesting demographic problem in that domestic demand is being squeezed by weak wage growth as highly paid retirees are replaced with lowly paid younger workers. They too are under pressure from commodity price inflation. Growth is likely to remain weak, on some estimates the economy may already be in recession. On the positive side, Japanese export exposure to, and earnings sourced from, China have both grown and the economy, having been in its own cyclical black hole for the last decade and a half, is out of step with the global cycle. Indeed, it is one of the few regions that would welcome the return of inflation, which would eat away at the burden of public sector debt taken on to combat the years of weak growth as well as the private sector debt problems that led to it. Currency adjusted, Japan has been a good relative performer this year and the market continues to offer diversification benefits relative to credit-crunch-afflicted western markets.

Far East Ex Japan / Emerging Markets

Emerging markets have continued to grow relatively rapidly but the inflationary costs have now become more visible. Although emerging economies have obvious advantages in terms of relative costs, mechanisms for managing peoples’ expectations are often less well advanced. Prosperity being a relatively new phenomenon, the sacrifices that sometimes have to be endured to make growth sustainable - such as enduring economic downturns in order to bring inflation under control - are not always appreciated by the politicians or easily sold to their electors. This has led to a willingness to plough on regardless, building up inflation pressures, both through domestic wage rises and the impact on global commodity prices of demand growing faster than supply.

China, hosting the Olympics this summer, has a clear motivation to finish any related projects and to ensure that shortages are not endured before or during the games. They are also believed to be switching coal fired generation to oil fired ahead of the Games, to reduce pollution levels, which is likely to have put further pressure on oil demand. Aside from this, they have had to cope with a range of natural disasters this year, complicating the authorities’ task in seeking to slow the economy to a sustainable pace. A more tangible slowdown seems possible after the Games have passed, which might usher in a correction in the commodities boom, relieving economic pressures worldwide.

The case for emerging economies remains strong, driven by a faster rate of growth and multiple sources of competitive advantage relative to mature economies. Although a slowdown in economic growth rates appears likely, even desirable, later in the year, this should help lay the platform for a more sustainable expansion in future years.

Bonds

Inflation is now the major focus for central bankers as the likelihood of a financial market implosion under the weight of debt and derivative products seems to be averted, for the moment at least. The desire for low risk assets such as gilts had driven the yields down to historically very low levels although this has quickly reversed

As always, if you have any queries or questions please do not hesitate to contact me .

Richard Smih

0845 226 9106

AddThis Social Bookmark Button