View more on these topics

Capital idea to restore pensions

At least one obstacle to pension provision for shareholding directors was removed by Chancellor Gordon Brown&#39s 1998 Budget.

Because of the withdrawal of a concession on writing down allowance in his July 1997 Budget, many directors were planning to spend as much money as possible on capital items – business equipment such as photocopiers, printers, plant and machinery – before July 1, 1998. This could have had a detrimental effect on other short-term expenditure plans such as contributions to directors&#39 pension schemes.

The July 1997 Budget increased capital allowances to 50 per cent in the first year, but only until July 1998, at which point it was assumed they would fall back to 25 per cent. But the Chancellor has surprised us all by announcing capital allowances from July 1998 of 40 per cent in the first year – a very positive move.

Nevertheless, for those more expensive capital purchases, a director will still wish to benefit from the 50 per cent allowance by making the purchase prior to July 1, 1998.

Interestingly, creative use of pension loan facilities on executive personal pensions or small self-administered schemes would enable the company to make a pension contribution and make their capital purchase while also claiming 150 per cent of the purchase price without impacting on short-term cashflows.

Recommended

Big guns&#39 price war blasted us out

Britannia Life managing director Des Hudson is sticking to his guns – he has no doubts that the decision to quit the IFA market was the right one. No amount of retrospective and encouraging figures, such as those above, can change the fact that cut-throat competition had squeezed the life office&#39s margins to unsustainable levels, […]

Newsline

Newsline reported the humiliating public dressing down given to Prudential by the Financial Services Authority over failings in its management and direct salesforce. Press *News# for the latest industry news.

IFAs leading the way on high-net-worth business

IFAs are winning the battle to dominate the market for personal financial advice in the high-net-worth sector, according to an NOP survey. The survey of 1,000 people, commissioned by Radio 4, shows that over half of consumers in the higher-income brackets favour going to an IFA to help with their financial decisions. IFAs outscore banks, […]

Act to remedy this sorry state of pension affairs

At least three out of five people face the prospect of relying on just the state pension in their retirement because they do not have a personal or company pension. Researchduring the course of last year on behalf of the LIA also indicates that over 40 per cent of the public have no investments or […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com