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Tinkering will boost the need for advice

The continual increase in tax complexity by a Chancellor who is an inveterate tinkerer will continue to drive demand by clients for tax and financial planning advice from IFAs.

The Chancellor has confirmed his intention to introduce a new retrospective income tax charge on the benefit that people get by having free enjoyment of assets they previously owned.

This is aimed principally at residential property schemes promoted by many solicitors but it was feared that it might apply to lump-sum insurance-based planning arrangements. How-ever, the Budget press notice confirms this fear is unfounded, “where the client&#39s continuing claims are limited to particular retained benefits”, the structure used by many life office schemes.

The proposals for change to taxation of the income and gains of trusts move on to the next stage. The rate applicable to trusts will increase from 34 per cent to 40 per cent from 2004/05. The likely outcome of the consultation continues to be the introduction in 2005/06 of a basic-rate band of £500 – an amount that some bel-ieve may create more compliance costs than benefits – and an increase in the number of trusts where the settlor will be taxed on the income and gains of the trust.

These changes are likely to increase significantly the demand from trustees for insurance wrappers, issued by onshore and offshore life offices, given the tax-deferral opportunities inherent in these structures.


Norwich Union offers PMI solution to smaller companies

Norwich Union Healthcare has made its solutions group private medical insurance available to smaller companies. The product was originally established in May 2002 for businesses with between 50 and 249 employees but is now caters for firms with between 10 and 249 staff. Solutions provides core cover and a range of options that allow companies […]

Templeton looks for hidden treasures

Franklin Templeton Investments has unveiled the Templeton Global Emerging Markets fund, an Oeic that invests in emerging markets such as China, India, Brazil and Turkey. The fund will be managed by the same team as the Templeton Emerging Markets investment trust and will hold between 100 and 150 stocks. The team is headed by Mark […]

Howard hammers borrow now tax later Chancellor

Leader of the Opposition Michael Howard has hammered the Chancellor&#39s Budget describing it as a borrow now tax later budget from a borrow now tax later Chancellor. Howard slammed the party&#39s savings record revealing that the number of people saving has fallen by 5 per cent from 10 per cent to 5 per cent.

Keydata Investment Services – Innovative Growth Plan

Type: Guaranteed equity bond Aim: Growth linked to the performance of the FTSE 100 index Minimum-maximum investment: £3,000-no maximum, Isa £7,000 Term: Six years Guarantee: Original capital returned in full regardless of performance of index Return: Up to 80% growth if index rises, up to 30% growth if index falls Closing date: April 23, 2004, […]

Is volatility dead? No, sell credit

There are several arguments that one could currently make for why credit markets look unattractive. These include signals that the US economy is in late cycle, the fact that corporate leverage has been increasing (with 2016 setting a record for the amount of global bond issuance), and that US high-yield default rates have risen considerably […]


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