In this article Paul Howson, Chartered Financial Planner at Kreston Reeves Financial Planning answers a question regarding the pension annual allowance and the significant and unexpected tax bill which can arise for some as a result of the taper system within it…
Whilst the title of this well-known song resonates with us, few actually push themselves to the limits in life. That doesn’t mean that we prefer a sedentary life over excitement; it just means that life has a habit of bringing us back to earth. We work to pay the mortgage, to feed the family and to hopefully have enough time left to enjoy ourselves when we retire.
For many small businesses it is a perennial issue. Where can you place your cash reserves to keep the funds accessible in the short term, yet receive a rate of interest that may offset the negative effects of inflation?
If the ongoing Brexit saga is leading you to defer investment of surplus cash into your business in the short term, a safe yet more productive home for your cash may be needed more than ever.
Could the emergence of Cash Management Services and Cash Savings Platforms be the answer to this problem?
In this article Tim Maakestad, Partner and Director of Kreston Reeves Financial Planning sets out his tenets for investment…
Life is about risk and reward. Some people are happy to lead a quiet life, avoiding if they can the physical or emotional extremes that present themselves from time to time. Whereas, some others crave these extremes both good and bad as they make life worth living.
You can put in place a tax efficient life insurance policy, set up by your business, which pays out a tax free lump sum on your death (or diagnosis of a terminal illness). These proceeds will be paid to your family or financial dependants.
Inheritance tax (IHT) is becoming a feature of more and more individual estates as asset values rise but the threshold beyond which this tax is paid remains static. Even with the reasonably recent introduction of the Residence Nil Rate Band affording certain qualifying individuals the opportunity to leave more to beneficiaries before IHT is charged, the Treasury is still set for a “bumper bonus” as the years go by.
We still come across cases where taxpayers, particularly those coming to us as new clients, haven’t received all the tax relief they are due on pension contributions – which isn’t entirely surprising considering the different ways these can be paid.
Financial planning can be thought of as a game of two halves. During our 20’s, 30’s and 40’s, we are making our way in life. We borrow and buy a house, we start long-term relationships and have a family. We make pension contributions and pave the way for the second half where in our 50’s, 60’s and 70’s, we enjoy the fruits of our labours. The mortgage is paid off, kids are through university and we have sufficient pension income to retire. The second half requires a good first half as a death or long-term illness will affect how much we have to live on. Similarly, lack of pension provision during the first will not give the rewards in the second.