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Why are we still waiting for the child trust fund?

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 the tax credit on equity Isas. Nor was the threshold for inheritance tax lifted significantly, trapping more and more investors into paying this tax. In particular hitting those who are capital rich through their house but income poor.

The Child Trust Fund has long been trialed. So why, despite it being backdated, will it not be implemented until 2005 and still no detail in product specification, who can offer it, investor risk etc. Of course with a time span of 18 years the greatest danger is that investment risk will be too limiting, thus reducing potential returns. While it may help educate children in university when they are older (past 12) the amounts are too small to make a huge difference to low income families. At 6 percent growth a year it will be worth around £1,400 – inflation adjusted at 2.5 per cent, about £900 by age 18, with enough to pay a few weeks of university costs or an old banger car.


Removing the tax charge on certain group life policies

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 […]

Independent view

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 […]

It&#39s a family business

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&#39s priorities and personal character. It is probably fair to say, however, that an influencing factor will be the individual&#39s particular job.As a result it is likely that those […]


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 SIMPLIFICATION The Chancellor announced […]


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