News and blog

Britons are set to waste £1.3 billion in inheritance tax

  • Inheritance tax is Britain’s second biggest tax waste area making up 10% of the overall tax wasted in the UK
  • So called ’death tax’ makes it into the top five of taxes Brits most want to abolish
  • Almost nine out of ten people have done nothing in the past 12 months to reduce the amount of tax they pay

Unbiased.co.uk’s annual Tax Action Report reveals that UK taxpayers will waste nearly £1.3 billion this year due to poor inheritance tax (IHT) planning.  This tax wastage is only set to increase further in the future after the chancellor announced in 2010 that the threshold would remain frozen for four years at £325,000 rather than rising in line with inflation.

Pensioner Inflation

Inflation is a deadly enemy for pensioners, who often have fixed incomes or rely on interest from savings to make ends meet. So there is no surprise that the fall in the CPI (consumer price index) inflation rate to 4% announced yesterday (12 April 2011), will not have them jumping for joy.

Tax Table 2011/12

At Retirement and Investment Solutions we are always striving to improve our website.

To help with all your tax queries please download our 2011/12 Tax table here

Individual savings accounts allowance (ISA limit 2011).

Just a quick note to keep everyone up to date on the new ISA allowance, which in our opinion is not the easiest of numbers to remember!

The new 2011/2012 cash ISA limit is £5,340 and the limit for a Stocks & Shares ISA is £10,680.  You can invest up to £10,680 into a stocks a shares ISA if you don't take the cash ISA allowance.

Both Cash ISAs and Stocks & Shares ISAs are open to anyone over 18, resident and ordinarily resident in the UK. Anyone over 16 can have a cash ISA.

Real Retirement Report

It has been over a year since Aviva started tracking the UK retirees through it's Real Retirement Report series.  The fifth report provides not only the opportunity to do a quarterly analysis of the fears and concerns of the over 55's but also looks at the annual picture from these three distinctive ages of retirement.

I think the report does highlight some important concerns and financial planning considerations for the older generation, but it is important to remember that individual circumstance vary somewhat.

As advisers dedicted to the over 50's I think most of our clients have found their experiences of the recession and subsequent economic environment less problematic than the figures in this report suggest - but is that just a case of what good financial planning can achieve??

Read the full report here ://www.retirementis.co.uk/images/stories/pdfs/090311_Aviva_Real_Retirement_Report_issue_five_March_2011.pdf

2011 Budget – What was all the fuss about?

There were no surprises in the Budget and very little of anything for the majority of individuals to get excited about.

The usual suspects – alcohol and tobacco – got hammered but that had already been announced previously.

Fuel duty down by 1p and an inflation rise in fuel prices in April 2011 has now been put back to 2012 – when you’re paying £1.40 for a litre of diesel a 1p reduction is nothing to get excited about.

Previously announced increases in Personal Allowances were confirmed as was the reduction in the band of income on which you pay basic rate Income Tax – if you’re under 65 and your income is less than £42,775 you will pay a little less tax than last year (about £200).

Inheritance Tax reduced (or has it) – a new Inheritance Tax rate of 36% will be introduced for estates where a minimum of 10% of the net estate is left to a registered charity. The current Inheritance Tax rate is 40% so this is a welcome reduction you might think.

However, as is often the case, nothing is as it seems – for example, if you leave a taxable estate of £100,000 and leave £10,000 of it to charity the new Inheritance Tax rate of 36% would be applied to the remaining £90,000 meaning that your beneficiaries receive a net amount of £57,600

Had you left to whole £100,000 to your beneficiaries and nothing to charity the Inheritance Tax rate might be higher at 40% but they are still left with a net amount of £60,000.

Market Update from Brooks Macdonald

Events such as Friday's devastating earthquake in Japan put many things into perspective and at a time of great human tragedy our thoughts are with those that have been, and continue to be, affected.

The earthquake, which was the sixth strongest on record (measuring 9.0 on the Richter scale), and the resulting tsunami caused devastation to a vast area in the rural north east of Japan. Whilst aftershocks are still being experienced, the waters have receded and the recovery process has now begun however, the risks around the nuclear plants are still unfolding. At the time of writing, it was confirmed by the Japanese government that the radiation from the Fukushima Daiichi nuclear plant had reached harmful levels following a third blast which appeared to have damaged one of the reactor’s containment systems.

News travels fast...

We have all been horrified this week at the images from Japan following the huge earthquake and subsequent Tsunami. Our thoughts go out too all those affected by this disaster and we can only hope that things do not get much worse for them with the problems they are having with their nuclear reactors.

We were having a discussion about the alarming regularity with which we hear about these types of things. Natural disasters, wars, unrest in the Middle East. Are things really so different now or are we truly in the age of information overload. With 24 hour rolling news we are subject to the full wonder and horror of the world and sometimes it feels as if it could be too much to bear. So many people have access to cameras on mobile phones, the internet, and sites like Facebook and Twitter that it could be said that everybody is now a journalist. In years gone by it could days or even weeks for the full picture to emerge following a disaster like the one we have just witnessed in Japan. And yet within hours we were able to see graphic images of the unfolding horror from amateur sources.

Death Wish List

Having recently had to organise a funeral, I have come to the decision that it should be compulsory for everyone to prepare a Wish List for their funeral, whilst they are still alive.

Losing someone close is distressing enough, but to have to sit in front of the funeral director to chose a coffin, for example, makes it so much harder.   They have a brochure from which you can choose anything from an eco friendly coffin to the more traditional coffin and anything in between and beyond (see www.crazycoffins.co.uk).

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