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More than expected: Richard Leeson, Scottish Equitable

IFAs have more to consider than expected from this year&#39s budget. The incentives to small business owners in the form of reduced CGT will generate even more high-net-worth investors as those entrepeneurs sell businesses at or before retirement with consequent inheritance tax liabilities.
The announcement of a review of the rules on residence and domicile is potentially far reaching and a welcome opportunity to recognise the mobility of individuals. A lot will depend on the detail but it is possible the remittance rules will be withdrawn allowing non-domiciles to avoid income tax and capital gains tax on non-UK assets. This would increase the attraction of offshore bonds which currently do not benefit from this favourable treatment. There is the possibility of wholesale change to the basis of assessing an individual&#39s liability to tax – in most other countries individuals are charged to tax based on residence only. – This would mean that if they were physically present in the UK for say 183 days in a tax year then they would be liable for tax on worldwide assets. At present non-domiciles avoid IHT on non-UK assets until they have lived here for 17 of the last 20 years there are opportunities for advisers to recommend avoidance strategies including excluded property trusts.
The uncertainty caused by the “Melville” case has been clarified putting minds at rest on the subject of trust powers having a value for IHT purposes. This was a tax avoidance case heard in the court of appeal which suggested the inclusion in a trust of powers retained by the settlor would render the settlor liable to IHT. The IR has clarified this is not its understanding but confirmed anti-avoidance rules will apply to the offensive aspects of the case.


FSA probes pension projections

The FSA is to examine contracting-out projection rates and the rules surrounding the state second pension in a consultation paper to be issued this month.The move follows the imm-inent changes being brought in by the Department for Work and Pensions to introduce new combined benefit statements for money-purchase pensions.The DWP is expected to issue its […]

Corporation tax breaks for large companies

Chancellor Gordon Brown is promising to legislate for a 25 per cent corporation tax relief on volume for large companies, aiming to give them a £400m boost for research and development. Corporation tax is to be scrapped for small firms and there is to be a 20 per cent cut in capital gains tax if […]

MGM and Pavilion in fund management deal

MGM Assurance has penned a deal with Pavilion Asset Management which will see Pavilion managing MGM&#39s £1.4bn in assets.The agreement also sees MGM&#39s investment director Gregor Logan joining the Pavilion Board as chief investment officer. The new combined fund management team will operate out of MGM&#39s City offices and comprise the majority of both existing […]

Investlife bond splits across 10 sectors

Investlife Luxembourg has unveiled the higher income and growth bond, an offshore bond that is linked to the performance of 10 sectors across Europe, including the UK.The bond has a four-year term and is linked to banks, en ergy, healthcare, chemical, media, insurance, technology, telecommunications, automobiles and food & beverage sectors. It offers investors the […]

The savvy consumer

In last year’s FCA thematic review of the mortgage market, one of the key things highlighted was the “savvy consumer”. That’s the client who comes in the door with a very clear idea of what they need and expect you to get them it. They don’t think they need advice, they have after all consulted […]


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