Protect your Pension pots

The Insolvency Service has urged individuals saving for retirement to protect their pension pots from criminals and ‘negligent trustees'.

Research carried out by the Service found that criminals use a range of tactics to convince savers to part with their funds, including persuading individuals to access their pension and invest in unregulated schemes.

Pension scam victims lost an average of £91,000 to criminals in 2018, according to Financial Conduct Authority (FCA) research. Criminals often use cold-calls and offers of free pension reviews to convince their victims to comply.

The Insolvency Service has urged savers to be wary of calls that come out of the blue; seek financial advice before altering their pension arrangements or making investments; and not be pressured into making decisions about their pension.

Consumer Minister Kelly Tolhurst said:

'If you are approached to make an investment from your pension, always do your homework and seek independent advice, if necessary, to help you make an informed decision.’

'The government continues to work closely with the Insolvency Service who are working to clamp down on rogue companies targeting vulnerable people.'

Internet link: GOV.UK news

For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.

Photo credit: rawpixel.com

Spring Statement date announced

The Chancellor of the Exchequer, Philip Hammond, has announced that the government will respond to the forecast from the Office for Budget Responsibility (OBR) in the Spring Statement on Wednesday 13 March 2019.

The Chancellor may take the opportunity to announce tax changes and consultations.

We will update you on pertinent announcements.

Internet link:  GOV.UK news

For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.

Inheritance Tax – A silver lining?

It may be possible to reclaim some of the inheritance tax (IHT) paid on Estates if the stock market performs badly.

IHT on shares is calculated on their value on the day the owner dies, but it may take months for the Estate to complete probate and the shares to be inherited.

If the share price falls before the inheritor has taken ownership, the estate may have overpaid IHT.

In years when the stock market has performed poorly, this is more likely to occur. For example, the FTSE 100 index is down 10.4% since August, from a high of 7,777 to 6,968.

A portfolio of shares valued on August 27 at £100,000 would now be worth £89,600 — a difference of £10,400. This could be eligible for a refund of 40% IHT — £4,160.

In the 2016-17 tax year, 2,014 estates reclaimed IHT on shares. In the previous tax year, it was 1,211 estates and in 2014-15 just 689.

In 2008-9, in the midst of the financial crisis, 5,329 estates reclaimed the tax on shares they had inherited. In that tax year the UK stock market fell by 30%.

IHT receipts are set to hit a record after £3.7bn was paid in the first eight months of the current tax year.

However, any IHT refund can only be claimed when the shares are sold, so careful planning is required.

Those looking to take advantage need to look at all the holdings in an Estate — if some of the shares in an inherited portfolio have increased in value, these gains will be offset against the losses of any that have fallen.

It may be best to sell only those shares that have fallen in value in the 12 months after death, which is the limit on the period for which you can reclaim the tax.

Executors can also reclaim IHT if the value of a house has fallen. In the last tax year, 2,177 estates reclaimed IHT paid on houses that were sold for less than their valuation on the date that the owner died.

In the 2008-9 tax year 4,958 estates made such a claim, rising to 5,314 in 2009-10. Houses are eligible for reclaims for four years.

If you need guidance, it is worth seeking advice especially those still administering the estates of those who dies leaving property (including shares) in the last 12 months.

For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.

 
Photo credit: Christian Vasile