Money Marketing
9 April 2003

  • ཿ% doing nothing on shortfalls'

    10 Apr 2003

    Most mortgage endowment policyholders have done nothing to address shortfalls on their policies, according to the Consumers' Association. The research, through the CA and Which? endowment campaign website, shows that 62 per cent of people who have a shortfall on their endowment mortgage have done nothing to reduce it. The survey reveals the 10 companies with the highest average shortfalls. The three companies with the biggest shortfalls are Abbey Life with an average £12,910 ...

  • 'FSA's pay move could hit DB Confidence'

    10 Apr 2003

    The FSA's decision to give lower pay rises to members of its final-salary scheme could start a trend that will hit confidence in such schemes, warns Scottish Life head of pension strategy Steve Bee. The regulator is increasing wages to members of the scheme by 4.2 per cent compared with 6.7 per cent increases for members of its money-purchase scheme. The FSA says the move, which is believed to be the first of its kind, is designed to equalise the overall benefits given to final-salary ...

  • 'Protection differences are critical'

    10 Apr 2003

    Scottish Equitable Protect is aiming to use details of its claims' history to highlight to IFAs the differences between income protection and critical-illness cover and the need to consider both options for clients. It is producing a leaflet for advisers which details the most frequent claims received on income protection policies. The leaflet highlights that for females 29 per cent of all income protection claims stem from psychological disorders such as depression or stress. For ...

  • £9bn babies as mums lose on out pensions

    10 Apr 2003

    Mothers are losing up to £9bn in pension funds by having babies, claims Axa. Its research shows that having a baby can slash a woman's pension fund by around £65,000 if she stops contributions for five years. This could mean a reduction in pension income of around £4,000 a year by age 65. Axa warns that new legislation from April 6 will worsen the problem as maternity leave will be extended to 26 weeks with pay up to £100 a week. The company says ...

  • 40 RIs could go as BBB reviews planning arms

    10 Apr 2003

    IFA group Berkeley Berry Birch is conducting a strategic review of its three financial planning arms which could see up to 40 RIs being made redundant or moving to other parts of the group. It has identified a number of "non-income producing" advisers who will be given the choice of either moving or leaving as BBB attempts to cut costs. Its three financial planning arms, Berry Birch & Noble, Professional Financial Solutions and Weston, currently have between 130 and 140 RIs. ...

  • A consumer's view

    10 Apr 2003

    As the pension crisis deepens, two new reports - from the Association of Consulting Actuaries and the National Consumer Council - are very critical of the Government's proposals contained in the Pensions Green Paper. Both reports come to the same conclusion - that the proposals do little to reduce the complexity of pensions and that they do nothing to relieve poverty in retirement or to encourage those who can afford to do so to save. Both the NCC and the ACA call for an increase ...

  • A new form of sole trader

    10 Apr 2003

    What an interesting letter from Ritchie Salkeld (Money Marketing, March 27) and I have every sympathy with him. However, when he says that, as a last resort, one should not support those offices where service standards are at an unacceptably bad level, I suppose that dealing with just one company would simplify matters. BGW Jamieson Principal, Jamieson Financial Management, Bognor Regis, West Sussex

  • AIB feels secure

    9 Apr 2003

    Allied Irish Bank Offshore has established the secure combination bond, which combines a fixed-rate high-interest account with a guaranteed equity bond. The bond is available in sterling and euros. Investors place 80 per cent of their capital in the guaranteed equity bond element and the rest goes into the high-interest account element. Investors have the choice of a one-year fixed rate account paying 8 per cent gross or a two-year fixed-rate account paying 5.35 per cent gross ...

  • All quiet on savings and pensions front

    10 Apr 2003

    One day, I will be on a Budget panel when there is a really momentous announcement affecting IFAs. But not this year.Not much about the savings ratio (when a Chancellor does not give one particular statistic in a budget almost wholly comprised of them, you can surmise that it is not improving: we didn't even get told what the ratio was in the Eurozone). Not much about pensions. So there can't be a crisis can there? It will be a cabinet colleague who will give the results ...

  • Annuity contracts issued by friendly societies

    10 Apr 2003

    The chargeable events rules apply to certain annuity contracts. The rules at the moment are inconsistent and apply to some annuities sold by friendly societies that would not be covered if sold by other insurers. The Government proposes a new measure, which will take effect on 9 April 2003, which will ensure that the chargeable event gain rules apply consistently to annuities whether they are sold by friendly societies or other insurers. In particular, it will put it beyond doubt ...

  • Baring sets up Asian hedge fund

    10 Apr 2003

    Baring Asset Management is offering an Asian fund of hedge funds which it expects will generate returns around 7 per cent above three-month US Treasury bills which are currently returning 1.14 per cent. The fund will invest primarily in equity long/short Asia Pacific hedge funds and aim for maximum 9 per cent volatility, as opposed to 21 per cent for the Pacific market over the past 20 years.

  • Barmy army order

    10 Apr 2003

    Hargreaves Lansdown regimental sergeant-major Peter Hargreaves' chest swelled with pride and the hope of medals last week when he received an MoD-headed letter confirming his call-up to the 3rd Airborne Infantry Division stationed in Iraq. The Captain Mannering of the West Country was seen with a skip in his step after getting the order to report for duty at Balamat HQ, Iraq, within 24 hours - until he noticed the letter had been sent on the first day of the month. The Diary ...

  • Beware the bear

    10 Apr 2003

    I suspect that through his column in Money Marketing, Julian Gibbs has been responsible for selling more stockmarket-linked bonds than any other person. I also suspect that he recommended the very products which he refers to in this week's column that have recently matured without returning investor's original capital (Money Marketing, April 3). He does point out, however, that investors would have lost more if invested directly in the stockmarkets. I am sure they feel happier ...

  • Bonds hit as ScotEq slashes payouts

    10 Apr 2003

    Scottish Equitable has imp-osed swingeing cuts on payouts from its closed with-profits funds following heavy investment losses, leaving some bond investors with less than the value of their original investment. After five years invested, a £10,000 investment in a with-profits bond will now be worth only £8,402 compared with £13,911 last year as its terminal bonus is wiped out and replaced by a market value reduction that fluctuates daily by up to 30 per cent. ScotEq ...

  • Borrowers could save £3bn a year, says HSBC

    10 Apr 2003

    HSBC is claiming that borrowers could save at least £3bn a year if rival big banks were to cut their base rates and match its 4.6 per cent homebuyer rate. The banking giant says competitors such as Woolwich, Abbey National, Halifax and Cheltenham & Gloucester charge around 2 per cent over the Bank of England's base rate, currently 3.75 per cent. As a result, many borrowers are paying an extra£1,000 on their mortgages each year. HSBC claims a home-owner borrowing ...

  • Bristol & West to market guaranteed bond via IFAs

    10 Apr 2003

    Bristol & West is offering a range of capital guaranteed bonds for distribution through IFAs for the start of the new tax year. The global income and growth guaranteed equity bond is a two-part investment that allows investors to place up to half their capital in a seven-year fixed-rate bond paying interest of 5.25 per cent gross. The remaining capital aims to return 70 per cent of the average growth across four international stockmarket indices - the FTSE 100, Nikkei 225, ...

  • Budget tax planning analysis

    10 Apr 2003

    I have always maintained (even more forcefully of late) that the value of relevant and timely information, understanding and advice cannot be underestimated. This is particularly so in knowledge based industries (such as ours) where what you know and how you can use it is the basis of your competitive advantage. So when it comes to the Budget what better time to understand the changes proposedand communicate what the changes are and what they mean to those ...

  • Budget update

    9 Apr 2003

    LIFE POLICYHOLDER TAXATION In any Budget there are some proposals that are directly relevant to financial services, some that are indirectly relevant and some that are just irrelevant. Inland Revenue Budget Press Release BN25 related to life insurance companies which in our books puts it in the "directly relevant" category. And there is one part of it (para 11) that is of particular importance, namely the reduction of the rate of tax on the policyholders' ...

  • Callum McCarthy

    10 Apr 2003

    Last month was not the first time that Callum McCarthy has seen his name splashed across the nationals with an unofficial announcement that he was to become the head of a UK regulator. His ascension to the top job at energy watchdog Ofgem in late September 1998 had already been leaked to the press by mid-August of that year. This time around, the Treasury barely had time to run an official internal memo over to the FSA before the press had already announced McCarthy was to replace ...

  • Capital allowances

    10 Apr 2003

    11.1 FUNDAMENTAL REFORMThe Government continues to use tax as a lever to encourage particular activities or behaviours. Businesses as well as individuals benefit from the tax reliefs offered. Capital allowances are an obvious example of how substantial (sometimes 100%) tax relief on expenditure can positively affect investment decisions made by businesses. The potential for significant reform to capital allowances was however raised in the consultative document ...

  • Capital investment bonds

    10 Apr 2003

    These will be particularly useful because:-They are non-income producing - there is no need to make an entry in the annual tax return until a chargeable event gain is made, say on full encashment or a withdrawal of more than the cumulative unused 5% allowances;No personal liability to basic rate tax arises on income and growth (although the income and gains generated by the investments underlying UK bonds are taxable in the hands of the insurance company);Tax ...

  • CGT avoidance

    10 Apr 2003

    5.2.1 Second Hand Endowment Policies Two measures are proposed by the Government to combat the loss of tax by persons investing in traded endowment policies. (a) Avoiding CGT It is well known that where a person buys an endowment policy (a "second hand endowment" or "traded endowment policy") and that policy remains a qualifying policy, then the only tax charge that will arise when the policy matures is that of capital gains tax and frequently ...

  • Charities

    10 Apr 2003

    Two main areas affected by the Budget statement are as follows:1. Charitable Trusts Investing in Life AssuranceThis is a major change announced in the Budget Note BN24 - Life Policyholder Taxation (see also section 7 of this Bulletin). With effect from 9 April 2003 trustees of charitable trusts will not have to pay tax on most UK policies and the tax charge on any foreign policies will be reduced to the basic rate.At present most gains made on policies ...

  • Chelsea site claims DIP in five minutes

    10 Apr 2003

    Chelsea Building Society is setting up a mortgage intermediary website which it claims can provide an adviser with a decision in principle in five minutes. The site has been developed over the last 12 months and aims to provide a simple and speedy application process for mortgages and allow advisers to review the status of cases. Chelsea says the site, www.chelseaintermediary.co.uk, will be able to give a decision in principle within five minutes while referrals will be dealt with ...

  • Cheshire Building Society - Loyalty Bond

    10 Apr 2003

    Thursday, 10 April 2003Type: High interest accountMinimum-maximum investment: £1,000-£25,000Interest rate: 3.95% gross a yearTerm: Two yearsOffer period: Until further noticeWithdrawal penalties: No withdrawals permitted during the termContact: www.thecheshire.co.uk

  • Child fund is hardly going to change the world

    10 Apr 2003

    In his address, which lasted an hour, it was disappointing that the Chancellor made no reference to the need to encourage consumers to save and in particular to address the pensions crisis.The Childs Trust Fund should be given some merit in that it can be seen as educational and a form of easily saving. But at £250 - £500 maximum, and means tested at the top end, it is hardly going to change the world for babies in 18 years time.While small businesses should be pleased ...

  • Child trust fund

    9 Apr 2003

    This is not a tax credit. This new measure (sometimes nicknamed "baby bonds") provides every child born from September 2002 with an initial endowment at birth of £250, rising to £500 for the poorest families. It is designed to help strengthen the saving habit of future generations.The Child Trust Fund (CTF) will be introduced to benefit children in the UK by:providing an initial endowment at birth for every child of £250, rising to £500 for ...

  • CIS slashes with-profits payouts

    10 Apr 2003

    CIS has slashed with-profits payouts by up to 20 per cent in its annual bonus declaration. The cuts mean a £50 per month 25-year endowment will pay out £65,772 compared with £82,214 last year.The company says terminal bonuses have been cut due to the bear market but that no terminal bonuses will be lost as a result of this declaration.

  • Collective investments that distribute income

    10 Apr 2003

    For those with minor children/grandchildren, opportunities that existed for using their personal income tax allowance by setting up trusts for their benefit under which the trustees invest in distribution units of equity unit trusts, OEICs and investment trusts ceased to exist from 6 April 1999. This is because the tax credit attaching to dividends from UK companies and distributions from equity unit trusts can no longer be reclaimed. Despite the pressure to reinstate this ability, no ...

  • Correspondents week

    10 Apr 2003

    Let's face it, it's never that good to bump into an ex-girlfriend but when it is 7am on a miserable Sunday morning in Gatwick airport and she is flying out for a week's skiing in perfect snow in Val d'Isere and I'm facing a 10-hour flight to Texas on business, that is really rubbing it in. Sunday, 5pm local time, and I finally arrive at the hotel - time for a run, some food and a bit of work before an early night ready for an 8am start. First thing in the morning, I ...

  • Court common investment funds

    10 Apr 2003

    The Budget has proposed that some changes should be made as a result of improvements to be made by the Lord Chancellor to the scheme rules under which CCIFs are run. The measure has effect in relation to people with funds held in a CCIF on or after 6 April 2003.CCIFs are a form of unit trust set up by the Lord Chancellor under section 42(1) Administration of Justice Act 1982. They exist as vehicles into which funds in court (for, say, children who have been the victims ...

  • Credit Suisse dominates Cofunds' Isa sales

    14 Apr 2003

    Credit Suisse's income fund was the top-seller on supermarket Cofunds this Isa season for the second year running. From January 1 to April 5 the fund outsold Liontrust's first income fund, which came second, Legal & General's fixed interest fund in third and Old Mutual's corporate bond fund in fourth. Fidelity's special situations fund, often the biggest selling fund on many platforms, came sixth. Eighty per cent of the top 20 were income seeking funds.

  • Debate the Live issues

    10 Apr 2003

    Money Marketing is offering IFAs a unique opportunity to grill the industry's regulators and take part in a lively debate over the future of financial services regulation. With 18 consultations affecting IFAs and a myriad of regulation changes facing the industry, this is your chance to get the lowdown from the decision-makers and key protagonists themselves. On May 13 at the Money Marketing Live roadshow in London's Olympia, Money Marketing Editor John Lappin will host a panel ...

  • Double duty stamped out for Muslims

    10 Apr 2003

    The Treasury's pledge to scrap the double charging of stamp duty on Islamic mortgages has been welcomed by the mortgage industry as a step towards a level playing field with non-muslims.Under current regulations muslims are effectively forced to rent their property from a specialist financier because they are unable to pay interest under Islamic law. The lender often sells the property for the same price but charges additional rent for a certain period of time, thereby causing stamp ...

  • EIS and VCT schemes successful in boosting companies

    10 Apr 2003

    Enterprise Investment Schemes and Venture Capital Trusts have largely met their objectives since their introduction, according to a report commissioned by the Inland Revenue as part of this week's Budget.The study by the Public and Corporate Economic Consultants found that the EIS and VCT schemes - introduced in 1994 and 1995 respectively - have provided investors with reasonable rates of return as well as front end income tax relief.Though the study found some disgruntled investors, ...

  • Employee benefit trusts

    10 Apr 2003

    Shortly after the decision in the "Dextra" case, which gave a resounding victory to the taxpayers with deductibility for the contribution to the trust being permitted regardless of the fact that there was no simultaneous assessment of the benefit on the beneficiaries, the Government published draft legislation to align deductibility and assessability. The legislation will be included in this year's Finance Bill although it takes effect in respect of the computation of profits and in ...

  • Employee share schemes

    10 Apr 2003

    Proposals have been announced to simplify and modify legislation in certain areas.CSOPUnder the Company Share Option Plan (CSOP), which is the discretionary approved share option scheme under which options can be granted for up to £30,000 for an employee, it will be possible to exercise options, without the tax benefits, within 3 years of each other.Currently, under the CSOP once an option has been exercised (which cannot be within 3 years of grant), ...

  • Employment law warning to IFAs

    10 Apr 2003

    Nearly half of IFAs are risking litigation and their businesses by not complying with employment law, according to a survey by law firm Peninsula. The survey showed that 53 per cent of IFAs surveyed were taking short cuts and only 34 per cent were aware of new employment legislation.

  • Endowment timing

    10 Apr 2003

    One of the questions in the first Money Marketing compliance clinic generated significant interest from readers and is worthy of more detailed discussion. In the last clinic, a reader asked whether a complaint received in respect of an endowment policy sold in January 1988 had to be dealt with in accordance with FSA requirements. The response that it did not need to be seemed to come as a surprise to some readers so I will now look at this area in more detail. Because the Financial ...

  • Equitable cuts court claim

    10 Apr 2003

    Equitabe Life has filed a reduced claim against former auditor Ernst & Young of £500m after its original £2.6bn claim was thrown out by the High Court in February. Equitable claims the auditor did not make it fully aware of the extent of its liabilities. Equitable says it will also appeal against the decision on its original £2.6bn claim.

  • Equitable shows signs of life

    10 Apr 2003

    One of the great ironies of the market turbulence is that Equitable Life is now outperforming other life funds following its switch out of equities and into bonds at the beginning of 2002. Chairman Vanni Treves, says Equitable is stabilising and out of intensive care although it still has some way to go. Equitable says it has been relatively well served by selling nearly all its equities at FTSE levels above 4,800. Its investment performance of 4.8 per cent compares with -12 per ...

  • Ethical funds get fuel for future

    10 Apr 2003

    The Chancellor showed a true amount of nationalistic pride in the many messages about how well the UK is doing compared with the US, Europe and even Japan. Are we encouraged? Forgive the cynacism but what country is the Chancellor living in if he thinks we are not in the midst of a recession?There was little of substance and not much to get your teeth into. To touch on pensions in one sentence sets the agenda for financial services - unless one takes the reference to moving civil ...

  • Ethical investors demand more data

    10 Apr 2003

    Jupiter says investors in socially responsible funds want more detailed information on where their money is invested. A survey by the fund firm of 1,427 of its ethical investors shows that 90 per cent want greater transparency and information on how investment decisions are made and where money is placed. Ninety-five per cent of investors want to know what environmental, social and ethical criteria are applied to their investments and how comp-anies are researched to assess whether ...

  • Eyes wide shut

    10 Apr 2003

    One of the latest insurance company victims of the endowment crisis is Prudential. According to a story in Money Marketing, the FSA's £750,000 fine for misselling was imposed because Scottish Amicable advisers did not ensure consumers had the right risk profile for investing in a product which might not repay the loan in full at maturity. But hold on, is a house not an investment? Can property not go down in value? What if I borrow 100 per cent and my house value falls at ...

  • F&C closes adviser salesforce and IFAs fear it could be first of many

    10 Apr 2003

    F&C Management's position in the UK retail market looks uncertain following its decision to close its IFA salesforce as financial pressure on the fund management industry continues to mount. In a move that IFAs fear could be the first of many, F&C has made its salesforce of eight redundant and scaled back its retail ambitions to concentrate on attracting direct business into its profitable investment trust operation. Those affected were informed this week. F&C says ...

  • F&C sales closure turns up the heat

    10 Apr 2003

    The closure of F&C's IFA salesforce will stoke fears that the retail fund industry is facing meltdown. F&C's drive to attract more IFA business began in earnest about four years ago with a small team of eight. In a bull market or even in a less savage bear one, the strategy might well have paid off. As it is, F&C will focus on direct sales of investment trusts and maintain some IFA relationships. Perhaps F&C's most interesting initiative was its with-prospects ...

  • Family tax credits

    9 Apr 2003

    Tax credits are designed to bridge the gap between the tax and social security benefit systems.The new tax credits - the Child Tax Credit (CTC) and the Working Tax Credit (WTC) - replaced the previous tax credits, which were the Children's Tax Credit and the Working Families' Tax Credit (together with various associated tax credits), from 6 April 2003. The aim is to create a "single income related strand of support for families with children, complemented by a single strand ...

  • Fidelity rides out storm as industry suffers Isa slump

    10 Apr 2003

    Fidelity has weathered the sales storm better than most fund firms as Isa business acroos the industry slumped by 40 per cent for the recently ended tax year. The US giant sold around £752m of Isas through all distribution channels in the 2002/03 financial year, a substantial drop from the £931m it achieved in the previous year. But this was a relatively good performance compared with the industry as a whole which saw Isa sales fall by around 40 per cent, according ...

  • Finance begins at 40

    10 Apr 2003

    People in their 40s are the most confident about investing and save the highest amounts in pension policies, according to Insight Investment. They are most likely to make their own decisions and this is also the age group which is most likely to have large surpluses of cash left at the end of the month. Insight reveals that 27 per cent of this age group have over £300 left at the end of the month compared with only 16 per cent of those over 50. This is also the group ...

  • Firms watch Baghdad not Brown

    10 Apr 2003

    Investment house economists have been left unimpressed by Brown's budget and are continuing to watch the news on Iraq to determine future changes in the world's stockmarkets. Pundits believe the budget will have little impact on share prices as all significant changes were flagged up in the pre budget review or leaked. Framlington head of equity income, monthly income and high-income funds George Luckraft predicts the Chancellor's 'luck is about to run out'. ...

  • Forsyth explores fixed interest hedge funds

    9 Apr 2003

    FORSYTH PARTNERS FORSYTH ALTERNATIVE INCOME FUNDType: Hedge fund of fundsAim: Income and growth by investing in fixed interest hedge funds, sovereign, corporate and emerging market bond funds Minimum investment: Lump sum $20,000 Place of registration: Cayman Islands Investment split: 100% in fixed interest hedge funds, sovereign, corporate and emerging market bond funds Charges: Initial up to 3%, annual 1.25% Commission: Initial up ...

  • Forsyth explores fixed-interest hedge funds

    9 Apr 2003

    FORSYTH PARTNERS FORSYTH ALTERNATIVE INCOME FUNDType: Hedge fund of fundsAim: Income and growth by investing in fixed interest hedge funds, sovereign, corporate and emerging market bond funds Minimum investment: Lump sum $20,000 Place of registration: Cayman Islands Investment split: 100% in fixed interest hedge funds, sovereign, corporate and emerging market bond funds Charges: Initial up to 3%, annual 1.25% Commission: Initial up ...

  • Forsyth offers alternative route to income

    10 Apr 2003

    FORSYTH PARTNERS FORSYTH ALTERNATIVE INCOME FUND Type: Hedge fund of funds Aim: Income and growth by investing in fixed interest hedge funds, sovereign, corporate and emerging market bond funds Minimum investment: Lump sum $20,000 Place of registration: Cayman Islands Investment split: 100% in fixed interest hedge funds, sovereign, corporate and emerging market bond funds Charges: Initial up to 3%, annual 1.25% Commission: ...

  • Foster carers

    10 Apr 2003

    From 6 April 2003 a new tax relief for individuals who provide foster care services to local authorities, either directly or through an agency, will be available. The relief will consist of two elements: foster carers whose gross receipts from foster care do not exceed an individual limit in a year will be exempt from tax on their income from foster care; andfoster carers whose gross receipts from foster care exceed the individual limit, will be able to ...

  • Framlington 'knockout' transfer deal

    10 Apr 2003

    Framlington is offering what it is calling a "knockout transfer deal" for May, allowing investors to transfer their Peps and Isas into four funds managed by star fund managers Nigel Thomas and George Luckraft for no initial charge. It is offering 1.5 per cent up-front commission to IFAs during May, with 0.5 per cent a year renewal.

  • Friends Provident International - Premier Flexible Savings Plan

    10 Apr 2003

    Thursday, 10 April 2003 Type: Offshore unit-linked whole of life policyAim: Income and growth by investing in up to 10 out of 85 fundsMinimum investment: Monthly $150, lump sum $3,000Place of registration: Isle of ManInvestment split: Choice of 85 funds from Aberdeen, Barclays, Baring, Ciptadana, Gartmore, Glanmore, Global Asset Management, HSBC, Invesco GT, Investec, Johnson Fry, Merrill Lynch, Momentum, Principal, Sarasin, Schroder, Surrenda-link, ...

  • FSA bans adviser for unauthorised secondhand sales

    10 Apr 2003

    The FSA has banned Yorkshire financial adviser Kevin Allsop from working in the financial services industry after selling secondhand endowment policies without authorisation. The regulator has evidence that Allsop bought at least 55 secondhand endowments and sold 50 of them to 50 different people between 1994 and 2001. It says that most of the polices have not yet matured but that Allsop's overcharging means that his clients face either lower returns or a loss. While the FSA ...

  • FSA consumer panel warns of suite risks

    10 Apr 2003

    The Sandler suite of products will fail to meet the needs of low to middle income consumers and runs a real risk of misselling as currently proposed the FSA's Consumer Panel has warned.The Panel says face-to-face advice is crucial to encouraging saving and its absence from the proposed Sandler sales regime means it cannot support the plans.Its strongly worded statement comes as the Treasury has postponed a decision on one of Sandlers' key recommendations this week. In ...

  • FSA leaflet promotes advice on tax-efficient donations

    10 Apr 2003

    The FSA is planning to sponsor the Giving Campaign's initiative to encourage tax-effective charitable donations. The charity believes the regulator's backing will encourage more advisers to offer information to their clients on making tax-free donations. The FSA is sending a Making Gifts Go Further leaflet to all regulated adviser firms. It details the main methods of tax-free giving to charity to enable financial professionals to advise their clients on charitable donations. According ...

  • FSA redemption yield move for bond fund ads

    10 Apr 2003

    Bond fund managers will be forced to display both the running yield and gross redemption yield with equal prominence in their ads following FSA intervention. In a bid to clamp down on potentially misleading ads which only display a high running yield, the regulator last week issued guidance insisting that all promotions give equal weight to the redemption yield, which is often the lower of the two. The FSA hopes this will mitigate the practice of fund managers taking charges from ...

  • Gains from policies held on a charitable trust

    10 Apr 2003

    The Chancellor proposes that, with effect from 9 April 2003, trustees of charitable will only have to pay tax at the basic rate which means that for most UK policies they will currently have no tax to pay. The background to this change is the chargeable event rules that apply to chargeable events on policies held in trust. The general rule is that such chargeable event gains are taxed on the creator of the trust (settlor) if he/she is alive at some time in the tax year in question ...

  • Gartmore extends focus funds discount

    10 Apr 2003

    Gartmore is extending the 2 per cent discount off the initial 5 per cent charge on lump-sum invest-ments in its focus fund range until April 30. The range consists of the American Focus, European Focus, Global Focus and UK Focus funds.

  • Gartmore head of sales leaves the company

    9 Apr 2003

    Mike Smith, head of sales at Gartmore, has left the company by mutual consent.Smith, who had been with the company for 10 months, left this week following a restructuring of the fund manager's sales team. Gartmore is implementing a flatter management structure to focus on key IFA relationships.Smith had joined in July from HSBC.

  • Gilchrist to retire after 35 years at ScotLife

    10 Apr 2003

    Scottish Life sales director Jim Gilchrist is retiring on July 1 after 35 years with the life office and will be succeeded by deputy sales director Jim Smith. Gilchrist, who joined Scottish Life in 1968 as a Glasgow branch manager, has held overall responsibility for sales since 1988. It had been rumoured that Gilchrist would retire following Royal London's takeover of Scottish Life in July 2001 but he was convinced to stay on board to help with the handover. Smith will ...

  • HSBC and Zurich give investors bite of FTSE cherry

    11 Apr 2003

    HSBC and Zurich have both established capital-protected bonds that could mature earlier than the investment term if the FTSE 100 index reaches a certain level at specified points. Both products return investors' original capital regardless of the index performance.HSBC's capital and growth plan has a six-year term but could mature in year three. The closing level of the FTSE 100 index is taken on May 16, 2003 and compared with the closing level on May 19, 2006. If it has ...

  • HSBC Asset Management - Capital & Growth Plan

    14 Apr 2003

    Monday, 14 April 2003 Type: Capital protected bondAim: Growth linked to the performance of the FTSE 100 indexMinimum-maximum investment: £3,000-no maximum, £7,000 IsaTerm: Six yearsGuarantee: Original capital returned in full regardless of performance in the indexReturn: 21% growth at the end of three years if index grows by 21% or more, 55% growth at the end of five years if index grows by 55% or more, up to 100% growth at end ...

  • IFAs waivering in the PI storm

    10 Apr 2003

    IFAs are facing a dilemma as the pace of developments escalates in the professional indemnity crisis. In just the last two weeks, Money Marketing has reported details of two proposals for captive or mutual PI insurers in the offing. While neither has yet come to market or sought authorisation, the idea they are being actively pursued is an encouraging sign. Aifa director general Paul Smee says: "I think the fact they seem to be emerging at the rate of one a week at the moment suggest ...

  • Imla says seller's packs will cost time and money

    10 Apr 2003

    The Intermediary Mortgage Lenders' Association says home seller's packs will raise costs and fail to improve consumer understanding. The Government sent out details of the proposed packs last week. Imla chairman John Heron says the plans have changed little since the original scheme was unveiled despite extensive feedback from the industry warn- ing the Government of weaknesses in the project. He says the packs, which will have to be offered to buyers by all sellers, rely ...

  • Income tax

    10 Apr 2003

    1. INCOME TAX 1.1 RATES OF TAX1.1.1 THE STARTING RATE OF INCOME TAXThe starting rate of 10% for the tax year 2003/2004 applies on the first £1,960 of taxable income (i.e. after allowances and reliefs). It should be noted that the starting rate does not apply to trusts.1.1.2 THE BASIC RATE OF INCOME TAXFor 2003/2004, the basic rate of income tax will be 22%. The higher rate threshold has been increased to £30,500. ...

  • Independent view

    10 Apr 2003

    It is no surprise that this year is turning out in much the manner that last year ended, with a lot of unfinished business, both on the geopolitical front and in a number of areas related to regulation. For most IFAs, the immediate focus is to eke out investment returns for clients in the most hostile climate we have experienced in many a year. If history is to repeat itself, events in the Gulf may be a platform from which modest investment returns might be expected but there is the ...

  • Inexperienced call-centre staff cost IFAs money

    10 Apr 2003

    I agree with Nick Bamford and others about poor provider service. It is our biggest problem. It is costing all us IFAs a fortune. I now delegate contacting providers to my staff. Our telephone bill has increased by 10 per cent compared with a year ago. We have analysed this and it is the calls to providers' 0845 numbers which have caused the increase. Our staff's time is wasted as well. Nick is spot on when he says that the senior management of these companies have made serious ...

  • Inheritance tax

    9 Apr 2003

    9.1 NIL-RATE BANDThe inheritance tax (IHT) nil-rate band has been increased from £250,000 to £255,000.The increased threshold will apply to chargeable transfers occurring on or after 6 April 2003. The threshold is being increased by statutory indexation. It is estimated that 29,500 estates will be caught for inheritance tax in tax year 2003/04. 9.2 GENERAL PLANNINGAlthough no major changes to IHT have yet been made by this Government, ...

  • Inside edge

    10 Apr 2003

    It doesn't seem that long ago that I was sending a memo to our national salesforce advising that our remaining two participant lenders had withdrawn from the equity-release market. We had been arranging such schemes for clients from the mid to the late 1980s and providing appropriate specialist advice. Many schemes were launched, including the less desirable roll-up mortgages with variable interest rates. Some such schemes - thankfully not those we had been recommending - left many ...

  • Introduction

    9 Apr 2003

    This year's pre-Budget speculation in the financial services industry was focused on possible further changes to National Insurance - notably raising the upper earnings limitchanges to the taxation of life policiestargeted IHT reformchanges to offshore fund taxation andpossible reform of the rules on residence and domicile.What follows are the main changes proposed that we believe will be of greatest interest to financial advisers:

  • Investec plants foot in hedge FOF market

    10 Apr 2003

    Investec Asset Management has established the absolute return fund series II, a fund of hedge funds that invests in a range of hedge funds that use different strategies.Investec has been trying to get into the hedge fund of funds market since 2001, but did not have the experience to do this. The solution was to outsource the management of this fund to a specialist hedge fund of funds manager, Olympia Capital Management. Investec already outsources some of its investment funds to ...

  • Investment analysis

    10 Apr 2003

    Most of the world's stockmarkets responded well to news from Iraq, which showed coalition forces making good progress. However, investors had to take on board weaker than expected economic data from around the globe and the Sars virus continued to affect Asian markets. In the US, the markets were hit early in the week by broad-based profit-taking and poor economic data - the Chicago purchasing managers' index showed a bigger than expected fall in business activity. The Dow, which ...

  • Investment view

    10 Apr 2003

    The chairman of the curiously named Betelgeuse Investment Funds was not a happy person. His career as a mover and shaker in a dynamic growth industry was not progressing in the way he felt it should. For a start, the industry in which he operated appeared to be on the decline. Not only had three years of the bear market savaged the funds under management for his group and for the majority of his competitors, severely reducing revenue-earning capability, the public no longer trusted ...

  • It's a family business

    10 Apr 2003

    It may be difficult for some people to maintain clear blue water between their working and family lives. Of course this can vary depending on an individual's priorities and personal character. It is probably fair to say, however, that an influencing factor will be the individual's particular job. As a result it is likely that those who own their own business, as individuals, partners or director shareholders, will experience this dilemma to a greater extent than employees might. ...

  • Jordan leaving Skandia for Widows' marketing role

    10 Apr 2003

    Skandia head of product marketing Peter Jordan is leaving the company after 10 years to become marketing director at Scottish Widows. Jordan will report to marketing and distribution managing director Nathan Moss and will concentrate on product marketing to the IFA sector as well as Widows' relationship with banks. Moss took over responsibility for marketing at Widows last autumn after former marketing director Andy Frepp became global marketing manager at Scottish Widows Investment ...

  • Julian Gibbs

    10 Apr 2003

    I have been asked recently by several IFAs what is going to happen to house prices and whether they should advise their clients to buy now. Much the most sensible analysis has been produced by Cluttons in association with Oxford Economic Forecasting. Its conclusion is two-fold. First, it believes that house prices in Central London are slightly but not significantly overvalued. It suggests there is an 80-85 per cent chance of prices falling at some stage this year by more than they ...

  • Jungle fever hits fund-raisers

    10 Apr 2003

    The National Autistic Society is holding its second Captains of Industry challenge which will see various financial services teams compete in a series of physical and mental challenges with the rest of industry to raise money for the charity. The NAS is hoping to top the £125,000 raised last year. Fifteen companies have signed up for the challenge, with financial services represented by Bupa, Legal & General and Royal Bank of Scotland. This year's event will take ...

  • Kenmir claims PI crisis will root out 'bad IFAs'

    10 Apr 2003

    "Bad IFAs" `will be forced out by the professional indemnity crisis, says FSA head of investment firms David Kenmir. He says that, in some ways, a clearout is a good thing because it will leave a better IFA sector which will increase confidence in the market. But Kenmir's comments have been called complacent by trade bodies, which say he has not grasped the extent of the problem facing IFAs. Aifa says Kenmir appears to be assuming IFAs are being underwritten individually ...

  • Keydata provides extra income

    15 Apr 2003

    Keydata Investment Services has established a fourth issue of the extra income plan, a guaranteed equity bond linked to the FTSE 100 index during a five-year term.The bond initially offers investors a choice between two options. Option one provides a further choice of 8 per cent income a year, 1.93 per cent income a quarter or growth of 43 per cent at the end of the term. Alternatively, investors can choose income of 6 per cent a year, income of 1,44 per cent a quarter or 32 per ...

  • Keydata unlocks income

    15 Apr 2003

    Keydata Investment Services has established a fourth issue of the extra income plan, a guaranteed equity bond linked to the FTSE 100 index during a five-year term.The bond initially offers investors a choice between two options. Option one provides a further choice of 8 per cent income a year, 1.93 per cent income a quarter or growth of 43 per cent at the end of the term. Alternatively, investors can choose income of 6 per cent a year, income of 1,44 per cent a quarter or 32 per ...

  • L&G cares for the country

    10 Apr 2003

    Legal & General staff have been getting their hands dirty working on a community project. Thirty staff from the Birmingham insurance division have been helping to create an outdoor wildlife learning centre at the Ackers Trust. The trust works to help provide community areas for disadvantaged families from multicultural backgrounds. It is set in 80 acres of overgrown countryside, which the volunteers are working to clear. L&G staff have been helping to transform the overgrown ...

  • L&G first insurer to get FSA waiver

    9 Apr 2003

    Legal & General is the first company to be granted a solvency waiver from the FSA. The regulator wrote to life offices in January to tell them it would grant waivers of solvency rules before a complete overhaul of the system scheduled for 2004.

  • L&H launches two-year fixed rate loan

    14 Apr 2003

    Leeds & Holbeck Building Society is launching a two-year 3.99 per cent fixed rate loan.

  • Leader of the seller's pack

    10 Apr 2003

    I read with interest the article on the back page of Money Marketing's April 3 edition entitled, Failure to offer seller's pack will not be criminal offence". I would like to provide my own comments to some of the points raised in the article. First, it was suggested that lenders would not accept the home condition report, creating the need for two surveys. I do not believe this will be the case. Most lenders now use a panel of surveyors and all panels include bigger chartered ...

  • Leeds & Holbeck Building Society

    15 Apr 2003

    Tuesday, 15 April 2003 Type: Capital protected Tessa-only IsaAim: Growth linked to the performance of the FTSE 100 indexMinimum-maximum investment: £3,000-£9,000Investment choice: Capital protected Tessa only IsaTerm: Six yearsGuarantee: Original capital returned in full regardless of performance in indexReturn: Subject to a minimum of 10% and maximum of 60% growth at end of termClosing date: April 30, 2003 Commission: ...

  • Life assurance company taxation

    10 Apr 2003

    8.1 BACKGROUNDThe Inland Revenue issued a press release on 23 December 2002 entitled "Making Taxation of Life Insurance Companies Fairer" about new rules for the taxation of life offices (including Friendly Societies carrying on life assurance business). Some of the new rules took effect from 23 December 2002. While the broad structure of life office taxation is unaltered, the full complexity of the proposals become apparent in January 2003 with the publication of draft ...

  • Long-term loan review 'is on the wrong track'

    10 Apr 2003

    Lenders and IFAs have denounced the review of the UK fixed rate mortgage market announced by Chancellor Gordon Brown in the Budget, branding it pointless and irrelevant to the majority of borrowers.The Chancellor announced in the Budget he was commissioning a review investigating why there is such a low take up of long term fixed rate mortgages in the UK compared to the US and other EU countries. His intention is to determine whether the mortgage market is to blame for stifling ...

  • Macho in Machu?

    10 Apr 2003

    Artemis Fund Managers MD Dick Turpin, Societe Generale Unit Trusts chief executive John Ions and Quill director Gordon Puckey are all set to trek the Inca trail in Peru to raise money for leukaemia charity the Anthony Nolan Trust. The Diary would like to wish the trio the best of luck keeping up with the rest of their team-mates who include England rugby internationals Victor Obogu and Ben Clarke. If you would like to make a donation, please send cheques payable to the Anthony ...

  • Marlborough Fund Managers - MFM Slater Recovery Fund

    11 Apr 2003

    Friday, 11 April 2003 Type: Unit trustAim: Growth by investing in UK companiesMinimum investment: Lump sum £3,000Investment split: 100% in UK companiesIsa link: YesPep transfers: YesCharges: Initial 5.25%, annual 1.5%Commission: Initial 3%, renewal 0.25%Tel: 0845 6023095

  • Maturity options on non qualifying policies

    10 Apr 2003

    Under the current law, there is no tax charge when a policy matures if the policyholder exercises an option to re-invest all the proceeds of the maturing policy in a new policy with the same insurer. This relief, in section 540(2) ICTA 1988, in effect means that the time of chargeable event is deferred until the encashment or maturity of the new policy.Some policyholders have used this rule in conjunction with the 5% tax-deferral rule to defer tax on the gain at maturity even ...

  • McCartney becomes Labour chairman

    10 Apr 2003

    Pensions minister Ian McCartney has been appointed chairman of the Labour Party as part of last week's mini Cabinet reshuffle. He replaces Dr John Reid, who was named Leader of the House. Reid takes over from Robin Cook, who resigned in protest over the war in Iraq three weeks ago. A new pensions minister is not expected to be named until after the conflict ends.

  • Means have no end in sight

    10 Apr 2003

    OK, so the Chancellor has 'given'an extra £2.5 billion to existing pensioners by extending means-testing. But, surprisingly, no mention of the fact that two million pensioners living on low incomes currently miss out on £2bn by not claiming the benefits already on offer. A depressing statistic the Government's own projections for future take up reflect.Means-testing demonstrably doesn't work and is clearly unpopular too. Those of us in financial services ...

  • Medical deal is just the tonic for Skipton

    10 Apr 2003

    Skipton Building Society's IFA division has bought Hertfordshire IFAs MIA Financial Services and the MIA group for an undisclosed amount. The deal for MIA, which specialises in providing advice for medical and dentistry professionals, increases RI numbers in its IFA division Skipton Financial Services from 85 to 140. Skipton estimates that the MIA deal will increase turnover to £20m from £12m by the end of 2003. This is the first move in a distribution acquisition ...

  • National Insurance

    10 Apr 2003

    Rises in National Insurance, as outlined in the 2002 Budget speech, are as follows for 2003/2004:- The employee's Primary Class 1 National Insurance rate is increased by 1% to 11% on earnings between the Primary Threshold (£89 per week) and Upper Earnings Limit (£595 per week).Employees will, in addition, pay 1% Primary Class 1 National Insurance on all earnings above the Upper Earnings Limit.The Employer's Secondary Class 1 contribution ...

  • New manager for Schroders' global emerging fund

    10 Apr 2003

    Schroders has changed the manager of its global emerging markets fund for the third time in less than three years, replacing Giles Neville with Robert Davy. Neville, who becomes fund director for global emerging markets products, took over the £86.2m fund in August 2002. Since then, it has fallen by 10.7 per cent against a sector average of -8.63 per cent, ranking it 18th of 25 funds, according to Lipper. Davy, who joined Schroders in 1986, is a senior member of the global ...

  • North takes lead on property price rises

    10 Apr 2003

    House prices rose by 1.1 per cent in March, according to the Halifax house price index. The figure is a fall from February's 1.7 per cent increase. Halifax says the slowdown has been caused by an increase in the number of properties coming on to the market. For the first three months of the year, prices grew by 4.4 per cent. The East Midlands saw the biggest increase on an annual basis, with prices up by 34 per cent for the year to March, followed by the North, where prices ...

  • nvesta - FTSE Focus Plan 2

    15 Apr 2003

    Tuesday, 15 April 2003 Type: Capital protected bondAim: Income or growth linked to the performance of the FTSE 100 indexMinimum-maximum investment: £3,000-£2mTerm: Three years two monthsGuarantee: Original capital returned in full providing the index does not fall by more than 25% and returns to at least its initial levelReturn: 9% income a year, 0.7% income a month, 30% growth at end of termClosing date: May 27, 2003 ...

  • nvesta focuses on FTSE

    14 Apr 2003

    nvesta has established the FTSE focus plan 2, a guaranteed equity bond that offers investors a choice between income and growth.The bond is linked to the performance of the FTSE 100 index over a term of three years and two months. Investors can choose between annual income of 9 per cent a year, monthly income of 0.7 per cent or growth of 30 per cent.Investors get all their original capital returned provided the FTSE 100 index does not fall by more than 25 per cent between ...

  • Offshore trusts

    10 Apr 2003

    In the Finance Act 2000, the Government introduced anti-avoidance legislation on offshore trusts. However, certain avoidance schemes have been introduced which seek to exploit the new rules and the Government has taken action to stop such exploitation. (a) Flip Flop SchemesThe `beneficiary charge' is a Capital Gains Tax (CGT) charge on UK resident and domiciled beneficiaries of offshore trusts. It applies when they receive payments from trustees of offshore trusts ...

  • Out of context

    10 Apr 2003

    •"It's like being on a shoot without many birds." - Artemis product and communications director Nick Wells on the climax to the Isa season •"Of course it's a lodge - have you ever seen an air-conditioned shed before?" - Syndaxi Financial Planning's Robert Reid on his back-garden office. •"One IFA told me I don't look nearly as fierce in person as I appear in the pages of Money Marketing." - FSA head of investment firms David Kenmir. •"You can ...

  • Outside edge

    10 Apr 2003

    I have a lot of sympathy for Nationwide's stance on the equity-release market. It is clearly both nonsense that two alternative and equally valid solutions to the burgeoning requirement for the elderly to augment their income by using the equity in their home fall either side of the regulatory divide. They are also correct in their implied assertion that this sector has the potential to be one of the next missell-ing scandals. I know of at least one other major lender, normally ...

  • Overview

    10 Apr 2003

    Despite the publication (in August 2002) of a consultative document on corporation tax reform - including such issues as the taxation of unrealised capital gains and the removal of capital allowances (in the interest of aligning accounting and tax practice) no changes to corporation tax were announced so the rates we are working with for the financial year starting 1st April 2003 are as follows:The small companies' rate of corporation tax is 19%, and applies where a ...

  • Overview

    10 Apr 2003

    Financial advisers who use single premium bonds as part of the investment or tax planning solutions they offer probably gave a large sigh of relief following the Chancellor's 2003 Budget. It was widely anticipated that the Government would announce changes to the taxation of life assurance that could affect the much loved 5% withdrawal rule. Although nothing materialised on this, there is a proposal to fundamentally change the taxation of chargeable event gains arising under UK life ...

  • Overview

    10 Apr 2003

    At a time of considerable uncertainty in investment markets, with investor confidence relatively low and appetite for risk understandably depressed, the importance of minimising tax on returns that are achieved is significantly increased.The main investment wrapper choices all continue to exist largely untouched by the proposals for tax change in this years' Budget.We cover pensions and life assurance policies elsewhere in this bulletin but in this section we will look ...

  • Overview

    10 Apr 2003

    There is no surprise that the Budget contains little on pensions as major changes have been made to State pensions over the last year, while radical changes are presently under consultation with regard to private pension provision. The Government introduced the State Second Pension in April 2002, while the Pension Credit is due to be implemented from October this year. The Government's intent to make significant changes to private pension provision has been outlined in the Green Paper, ...

  • Overview

    10 Apr 2003

    The Government have taken the 2003 Budget as an opportunity to undertake some simplification and improvement to the capital gains tax (CGT) rules as well as to counter some specific tax avoidance schemes that exist by exploiting the rules that apply to second hand endowment policies and offshore trusts. 5.1 CGT SIMPLIFICATIONThe Chancellor announced proposals for simplification in the following areas:-the reporting requirements for chargeable gains;definition

  • Personal allowances, reliefs and credits

    10 Apr 2003

    All allowances and thresholds other than the basic personal allowance have been raised in line with statutory indexation. This means:-the personal allowance is frozen at £4,615.an increase in the level of age allowance from £6,100 to £6,610 (for those aged 65 - 74) and from £6,370 to £6,720 (for those aged 75 and over).an increase in the level of income that a person can enjoy before age allowance is cut back. This figure has ...

  • Planning for the new simplified tax regime

    10 Apr 2003

    Although neither the commencement date nor the finalised rules have been made in respect of the new simplified tax regime there are a number of areas where clients will be seeking advice. The introduction of the new simplified tax regime will not greatly impact on the vast majority of clients whose retirement fund is never likely to exceed the Lifetime Limit. These clients should continue with their current pension provision, perhaps considering an increase in their contributions ...

  • PPM picks marketing chief

    10 Apr 2003

    Third-party pension administrator Personal Pension Management has appointed Kevan Ward as marketing and development director. Ward joins from Barclays and will be responsible for business development.

  • Property price rises showing slowdown

    10 Apr 2003

    Nationwide says property prices in the first quarter of this year rose at a slower pace than in the final quarter of last year. The increase of 3.9 per cent in Q1 was a marked decline on the 6.7 per cent rise in Q4 last year. However, Nationwide is maintaining its forecast for the year of 10 per cent growth, which would be substantially lower than the 25 per cent growth in the market last year. It has reduced its prediction for the bank base rate level by the end of 2003 to ...

  • Property wins on recognition but loses on fund tax

    10 Apr 2003

    Two notable features in this years thin budget from a property and mortgage perspective. First the focus on this area in the Chancellor's speech was a long overdue recognition of its importance to the wealth and personal disposable income of private individuals. Second was the dawning that stability in mortgage payments from proper fixed rates is an important ingredient in ensuring the long term stability of consumer demand and thus the economy itself. So the review by Professor David ...

  • Push whacked

    10 Apr 2003

    Amid all the doom and gloom hanging over the financial services sector, there are glimmers of encouragement. Most of the low-cost endowments on our books are those in existence prior to our involvement with the clients in question although we receive copies of the various updates and reprojections issued by the life companies. As we all know, the latest round is more alarming than ever and in many cases quite unecessarily so, thanks in no small measure to the regime ensconced at Canary ...

  • Qualifying policies charging for an exceptional risk of disability

    10 Apr 2003

    When the terms of a qualifying life insurance policy are improved because the insurer discovers after it has sold the policy that it is not appropriate to charge for an exceptional risk of disability, the change in the policy's terms can cause it to lose its qualifying status. This has never been the case where there is a charge for an exceptional risk of death.Fully retrospective provisions are to be introduced which will ensure that a policy will not lose its qualifying status ...

  • Racing driver hopes EIS will be a winning formula

    10 Apr 2003

    Formula 1 fans can invest in the career of up-and-coming driver Justin Wilson through an enterprise investment scheme. The Justin Wilson EIS has been established to raise the $1.5m contribution that Wilson needed to secure his 2003 contract with the small Italian F1 team Minardi. Many drivers who move to Formula 1 bring sponsorship with them but this is difficult to obtain. Minardi needs the money because it operates on a tight budget compared with bigger teams such as Ferrari ...

  • RBS cuts discount rates

    15 Apr 2003

    Royal Bank of Scotland has cut the rates on its range of discount mortgages as it removes the early repayment charges on all of its products.

  • Removing the tax charge on certain group life policies

    10 Apr 2003

    A group life policy is one that insures the lives of a group of individuals and pays benefits on each death. Multiple payments of death benefits can lead to unintended charges to tax on either the lives insured or the policyholder. This is because a policy which can pay benefits on the death of more than one individual will not be a qualifying policy. Whilst the first death will give rise to a chargeable event, in the case of protection policies the policy is unlikely to have ...

  • Rental yields show signs of growth

    14 Apr 2003

    Rental yields rose slightly last month, raising hopes that the steady decline seen since November 2001 has come to an end, according to Paragon Mortgages.

  • Residence and domicile

    10 Apr 2003

    Advisers active in advising other than UK resident domiciliaries will be familiar with the residence and domicile rules, which are explained in detail in Inland Revenue booklet IR20.16.1 THE CURRENT RULES The residence and domicile rules determine an individual's liability to UK tax. Broadly speaking, the extent to which an individual is liable to UK tax will depend upon whether he is:resident; and/orordinarily resident; and/ordomiciled ...

  • Revenue dilutes anti-avoidance measures

    10 Apr 2003

    The Inland Revenue has watered down a series of tough anti tax avoidance measures aimed at Britain's battered life insurance industry.But accountants warned that life offices are still likely to face higher tax bills at a time when many are grappling with huge losses caused by the worst stockmarket conditions for a generation. The Revenue's measures will make it more difficult for life insurers to offset tax on gains on investments which have performed well, such as property, ...

  • Rock Bottom hits the top

    10 Apr 2003

    The penultimate game in the IFA Manager of Managers 2003 and Best PIMS Return 2003 Champions Competition has now been played and the results of the top 10 performing teams are shown in the table below. The Rock Bottom team of funds, managed by Mark Hughes has reached top position yet again in the league table after the third game. Is this just luck or can they stay at the top next month? The team have now returned an impressive 1.26 per cent return over the three games so far. This ...

  • Saving the day

    10 Apr 2003

    The culture of spend, spend, spend seems to be here to stay. A recent report suggests the combined pension statement may have little effect in encouraging a culture of saving. Trials launched in autumn 2000 show more than 90 per cent of people have failed to act on the statements which, as expected, overwhelmingly show people continue to fail to save enough, with just under 10 per cent looking to increase their contributions. For the companies that have taken part in the initiative, ...

  • Scrap the lifetime limit NAPF warns

    14 Apr 2003

    The Government should scrap its proposed lifetime limit on pensions savings the National Association of Pension Funds has urged in its response to the Inland Revenue Taxation.

  • Secure Air Systems - Secure Air Systems

    14 Apr 2003

    Monday, 14 April 2003 Aim: Growth by investing in a company creating an air purification and air handling systemMinimum investment: Lump sum £2,000Opening/closing dates: April 12, 2003/May 22, 2003 Charges: ImplicitCommission: Initial 2.5%Tel: 020 7917 9444

  • Sick notes

    10 Apr 2003

    A friend is receiving statutory sick pay from his employer. My employer would commence SSP arrangements after 40 working days' absence. Having considered this carefully, I would prefer, both as an individual and as one of the management team at my employer, for more generous arrangements to be in place. What options are available to me as an individual and to my employer? Basically, there are two options which are that you can either have an individual income replacement policy ...

  • Skipton Guernsey - 3 Year Step Up Bond Issue 8

    9 Apr 2003

    Wednesday, 9 April 2003 Type: Offshore high interest accountMinimum-maximum investment: £10,000 - £500,000Place of registration: GuernseyInterest rates: Up to £49,999 - 3.4% gross a year until April 27, 2004, 3.9% until April 27, 2005, 4.1% until April 27, 2006. £50,000 and above - 3.45% gross a year until April 27, 2004, 3.95% until April 27, 2005, 4.15% until April 27, 2006Term: Three yearsOffer period: Until ...

  • Slow response from regulator

    10 Apr 2003

    This firm acts as adviser to a trade association representing over 1,000 individuals in the financial and legal fields. We had a particularly relevant question arising from the FSA's CP160, so we emailed the FSA, as recommended by it, on January 28 - no answer. After two reminder emails, we finally received a reply on the afternoon of March 28. No apology, no answer to the query, just telling us to refer to CP159, which we could download from the FSA's website. (Presumably ...

  • Stamp duty

    10 Apr 2003

    This Budget confirms the details of and changes to the modernised regime for stamp duty (now also, in some of the Budget Notes referred to as "stamp taxes") which were first announced in the Budget 2002. Most of these come under the heading "Modernising the Taxation of Property". The new regime will apply from 1 December 2003 and apart from stamp duty changes will include a number of anti-avoidance measures to discourage the transfer of properties to companies in certain ...

  • Standard Life appoints new chairman

    14 Apr 2003

    Standard Life is appointing Sir Brian Stewart as its new chairman following the retirement of current chairman John Trott on June 30.

  • Taking stock

    10 Apr 2003

    The first four months of this year have offered little respite from the bear market. The FTSE100 stands at about half the level of its peak in December 1999. But it provides a good background for discerning investors to start looking at the value of holding equities. Despite the uncertain economic outlook, investors should not ignore the opportunity to pick up quality stocks cheaply. In terms of research and information, general sector analyses are less useful during a sustained ...

  • Talkback

    10 Apr 2003

    "He has always been portrayed as whiter than white but, if you look at the Pru's track record, he may not be as white as we are led to believe. Sir Peter Davis heading the Government's employer pension taskforce could be like the poacher becoming the gamekeeper." Christopher Hind, Crossley MacKenzie "Yes. It is just another Government quango so they will choose whoever they want." Tony Young, Cowan Young Financial Planning "Yes. He has headed a financial services ...

  • Tax planning for the DC tax regime

    10 Apr 2003

    The new DC tax regime has introduced a number of very attractive tax planning opportunities which includeChildren and Non-Working SpousesThe ability to be able to normally contribute up to £3,600 gross to a new DC tax regime scheme, for any individual aged under 75 who is resident and ordinarily resident in the UK, sets up new opportunities for pensioning a child or a non-working spouse. It should, however, be noted that a legal guardian is required ...

  • Taxation of policyholders of UK policies

    10 Apr 2003

    Tucked away in Inland Revenue Press Release REV BN 25 which deals with the taxation of Life Insurance Companies is the following statement:"The Government is also making changes to the rate of corporation tax on the policy holders' share of a life company's profits. The rate of tax on all policy holders' income and gains will be equal to the lower rate of income tax, and no profits will be charged at a rate equal to the basic rate (the rate applying in particular to chargeable ...

  • The earnings cap

    10 Apr 2003

    A number of directors will have a keen interest in reducing both corporation tax (and also employer's National Insurance) and personal levels of income tax. In particular, a number may enjoy a high level of earnings in excess of the earnings cap which has been increased to £99,000 for tax year 2003/2004.Where such directors are unable to pension their earnings over the cap by means of an approved occupational scheme (as they are neither pre 87 nor 87-89 regime members) ...

  • The Maersk of sorrow

    10 Apr 2003

    I mentioned at the end of my last article that we would be moving away from current issues surrounding money-purchase schemes to look at defined-benefit schemes but few readers could have begun to imagine the importance of the topics I am about to discuss. After all, only a very small proportion of IFAs are authorised to give advice regarding membership of this type of scheme, most notably in respect of possible transfers of benefits for early leavers and opt-outs for current members, ...

  • The new child trust fund

    10 Apr 2003

    This has been trailed for some time now and at last we have "lift off" so to speak.The Child Trust Fund (CTF) will be introduced to benefit children across the UK by:providing an initial endowment at birth for every child of £250, rising to £500 for children from low-income families who also qualify for full Child Tax Credit - around a third of all children;allowing additional contributions to be made by parents, family members and friends, ...

  • Tories and LibDems fight to save Isa tax credit

    10 Apr 2003

    Chancellor Gordon Brown's decision to push through the abolition of the 10 per cent Isa dividend tax credit has been resoundingly criticised by fund managers and trade bodies. The absence of comment on Isas in the Budget other than a general statement endorsing the product has been interpreted by the industry as confirmation the tax credit will disappear as anticipated at the beginning of the 2004 tax year.Fund companies say the Chancellor has kicked the savings industry ...

  • Treasury pledges an open market for CTFs

    10 Apr 2003

    After two years and three rounds of consultation, the Treasury has finally announced the launch of its Child Trust Fund savings initiative, although final details will not be published until the summer. The scheme, which is expected to be available from 2005, will see initial cash endowments of £250 for every child born since September 2002, rising to £500 for the poorest children.Additional contributions from the child's relatives of up to £1,000 a year will ...

  • Trustees taking loans from policies held subject to trust

    10 Apr 2003

    It is well known that where an individual owns a non-qualifying policy and the insurance company makes a loan to the policyholder or arranges for a loan to be made to the policyholder, that loan would be treated as a deemed part surrender of the policy. However, what was not well known was that this provision only applied in cases where chargeable event gains would be assessed on an individual or on a company in company owned policy cases. And, of course, as outlined in 4 above, ...

  • Two's company

    10 Apr 2003

    There can't be many of you out there who don't have the owner/managers of private limited companies as clients. Often, these will include shareholders who are married couples. In some cases, both will be full-time directors as well as shareholders of the business and will spend all their time in the business. In other cases, while one of the couple will spend all their time in the business, the other will not, even though they own a significant shareholding. The reasons for this ...

  • University research says performance data is valuable

    10 Apr 2003

    The FSA's decision to exclude past performance data from its investment league tables has been undermined by independent research it commissioned which claims such information should be displayed. In a report published this week by professor David Blake of Birbeck College, University of London and professor Allan Timmerman of the University of California, the claim that past performance information should be excluded as investors may misuse it has been rejected. The professors ...

  • Why are we still waiting for the child trust fund?

    10 Apr 2003

    The budget was exceptionally thin on announcements this year, many of us will thank God for that!But it shows that the Chancellor has little room for grand gestures. His "modest" increase in borrowing works only if growth picks up. Not breaching so-called borrowing limits over the cycle was amusing, bearing in mind that according to the Chancellor he has abolished the economic cycle!!There was little for the finance industry with the Chancellor ignoring pleas to maintain ...

  • Why stop at banks when societies are also to blame?

    10 Apr 2003

    What an interesting letters section last week. First, concerning the letter headlined, Call banks to account, I totally agree with Julian Stevens' comments but why stop at banks? Building societies, national and local, are only concerned in "selling" financial products and no regulator, going back to Nasdim (remember?) days has had the balls to address the problem. Any good business should give its salesforce targets but it should not be at the cost of giving proper advice to ...

  • Yielding to FSA on bond fund ad campaigns

    10 Apr 2003

    There was a barrage of advertisements in the Isa season that has just closed extolling the virtues of equity income and bond funds. The latter appears to have been more successful. According to figures from the Investment Management Association, corporate bond funds outsold equity income funds by six to one in February. But following a guidance note issued by the FSA last week, fund firms will no longer be able to market their bond funds in the same way as they have for many years. As ...

  • ZAN picks sub-prime lender

    10 Apr 2003

    Zurich Advice Network is entering the sub-prime market by appointing Enterprise Homeloans to its mortgage lending panel. Enterprise Homeloans, a trading arm of Enterprise Broker Services will be ZAN's exclusive packager of sub-prime mortgages. Enterprise will place and package schemes for ZAN using its own specialists lender panel consisting of GMAC Residential Funding, Kensington, igroup, Platform, Preferred and SPML. ZAN says the move follows calls from advisers for more specialist ...

  • Zurich Financial Services - Zurich Guaranteed Account

    11 Apr 2003

    Friday, 11 April 2003 Type: Capital protected bondAim: Growth linked to the performance of the FTSE 100 indexMinimum-maximum investment: £2,500-£250,000Term: Five years six monthsGuarantee: Original capital returned in full regardless of performance in the indexReturn: Up to 100% growth at end of the term or 30% growth at end of three years if index grows by 30% or more by the third anniversaryClosing date: May 19, 2003 ...

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