Thursday, 11 December 2014

ISO22222 International Standards x6

BS ISO 22222

– the international quality standard for personal financial planners

I'm delighted to announce I have been awarded this charter mark again in 2014, having first obtained it in 2008.
 
This standard specifies requirements and provides a framework that applies to the ethical behaviour, competencies and experience of a professional personal financial planner.
 
As an Independent Financial Adviser providing personal financial services it is important to keep up to date with the latest best practice guidelines.
BS ISO 22222:2005 was created with the objective of achieving and promoting consumer confidence by providing an internationally agreed benchmark for a high global standard of personal financial advice.
 
 
 
 
The core six steps of the personal financial planning process are:
  • Establishing and defining the client and personal financial planner relationship
  • Gathering client data and determining goals and expectations
  • Analysing and evaluating the client's financial status
  • Developing and presenting the financial plan
  • Implementing the financial planning recommendations
  • Monitoring the financial plan and the financial planning relationship
To support the high level benchmark of best practice one needs to demonstrate the requirements of:
  • Ethical behaviour and financial planning
  • Information security, client confidentiality and data protection
  • Risk management
  • Continual improvement
By adhering to the requirements of BS ISO 22222 I am are able to demonstrate commitment and dedication to continual improvement  and ensure that client satisfaction is at the core of my business culture.
 
Pre-requisites of Certification to ISO22222
Qualifications
  • Hold an appropriate qualification that assesses Financial Planning knowledge at an advanced level.
Experience
  • At least three years experience [Ian Green: as at 2014 I have nineteen years experience] in each of the six steps of the personal financial planning process

.

BS8577 British Standards Accreditation x3

I'm delighted to announce that Green Financial has received its British Standards Accreditation for BS8577 for the third year running.

Green Financial was just the fifth firm in the UK to gain this charter mark.
What is BS 8577?

BS 8577 is the British Standard framework for the provision of financial advice and planning services for financial planning and advisory firms.
 
Rather than individual examination passes on subjects such as pensions or investments which all advisers have to have in order to practice, BS 8577 is the only professional quality standard within Financial Services to focus solely on the following key areas of business practice:
  • Operational management;
  • Objectives and policies;
  • Management responsibility;
  • Customer relationship management;
  • Recruitment, training, development and ongoing competence; and
  • Control of documents and records.

 
 
Developed by the British Standards Institution (BSI) with industry experts and consumer bodies, BS8577 is aimed at assisting firms and financial advisers operate efficient and transparent financial planning and advice services.
In today’s professional world thriving in business is about striving for and achieving ‘Best Practice’ and not just about delivering ‘Best Advice’.
 
The British Standards Institute (BSI) say they have "been successful in building a sustainable best practice operational framework for firms allowing them to create an environment their staff want to work in and a business their clients want to work with."

Monday, 8 December 2014

ISA IHT - Good but not great

the devil is in the detail...

As is so often the case, an announcement that seems BRILLIANT actually turns out to be less so.
So from the joy of ISAs being potentially outside of IHT, it is more a 'first death' benefit.

Still good, but not as great as I'd hoped it would be.

ISA inheritability makes 'allowance' for spouse

Details have begun to emerge on how the new inheritable ISA rules will operate. And the good news is that it will be achieved by an increased ISA allowance for the surviving spouse rather than the actual ISA assets themselves. This means you won't have to revisit their wills.
How the rules will workIf an ISA holder dies after 3 December, their spouse or civil partner will be allowed to invest an amount equivalent to the deceased's ISA into their own ISA via an additional allowance. This is in addition to their normal annual ISA limit for the tax year and will be claimable from 6 April 2015.
This means the surviving spouse can continue to enjoy tax free investment returns on savings equal to the deceased ISA fund. But it doesn't have to be the same assets which came from the deceased's ISA which are paid into their spouses new or existing ISA. The surviving spouse can make contributions up to their increased allowance from any assets.
What it means for estate planning
By not linking the transferability to the actual ISA assets, it provides greater flexibility and doesn't have an adverse impact on estate planning that you may have already put in place.
For example, had it been the ISA itself which had to pass to the spouse to benefit from the continued tax privileged status, it could have meant many thousands of ISA holders having to amend their existing Wills. Where the spouse was not the intended beneficiary under the Will or where assets would have been held on trust for the spouse - a common scenario - the spouse would miss out on the tax savings on offer.
Instead it's the allowance which is inherited, not the asset. This means that the spouse can benefit by paying their own assets into their ISA and claiming the higher allowance. And the deceased's assets can be distributed in accordance with their wishes, as set out in their Will.
The tax implications
The tax benefits of an ISA are well documented. Funds remain free of income tax and capital gains when held within the ISA wrapper. And it's the continuity of this tax free growth for the surviving spouse where the new benefit lies. It's an opportunity to keep savings in a tax free environment.
But the new rules don't provide any additional inheritance tax benefits. The rules just entitle the survivor to an increased ISA allowance for a limited period after death. The actual ISA assets will be distributed in line with the terms of the Will (or the intestacy rules) and remain within the estate for IHT.
Where they pass to the spouse or civil partner, they'll be covered by the spousal exemption. Even then, ultimately the combined ISA funds may be subject to 40% IHT on the second death.
With ISA rules and pension rules getting ever closer, it may be worth even considering whether to take up an increased ISA allowance if the same amount could be paid into a SIPP. This would achieve the same tax free investment returns as the ISA and the same access for clients over age 55. But the benefit would be that the SIPP will be free of IHT and potentially tax free in the hands of the beneficiaries if death is before 75.
What's next?
The new allowance will be available from 6 April 2015 for deaths on or after 3 December. Draft legislation is expected before the end of the year and the final position will become clear after a short period of consultation.

The new inherited allowance will complement the new pension death rules - a welcome addition to the whole new world of tax planning opportunities from next April.

Thursday, 4 December 2014

Autumn Statement - a little more detail

This update based on content provided by the technical team at Standard Life:

There were no surprises in George Osborne's Autumn Statement to match the seismic pension changes in his last Budget. However, he did pull one rabbit out of the hat for savers in the shape of new inheritability of ISAs for married couples. He also confirmed how pension wealth can be cascaded down the generations.

ISA inheritabilityISA savers will benefit from two positive changes:

  • The annual allowance will increase to £15,240 from £15,000 from April 2015.
  • There was NO mention of a lifetime cap for savers.
  • From today, spouses and civil partners will be able to inherit their deceased partner's ISA fund and retain the tax advantages of the wrapper. There will be no impact on the spouse's/civil partner's own ISA annual allowance.

ISA accounts left to a spouse or civil partner will of course continue to pass IHT free as before - the transfer itself being covered by the spousal exemption. The big difference is that the continuing returns on a deceased partner's savings will be tax free.

The combined value of a surviving partner's ISA account will ultimately be included in their own estate for IHT. Those near to or already over age 55 may want to consider moving these savings into a pension, potentially allowing the pension fund to be passed on to their children and grandchildren tax free.

Pension freedoms confirmedToday's confirmation of the new DC (defined contribution) pension death benefit regime puts the final icing on the cake for next April's world of ‘freedom & choice'.

  • On death before 75, any death benefit will be paid tax free within the Lifetime Allowance (LTA). In a change from the original proposals, this will now apply to survivors' annuities and pension guarantee payments as well as inherited drawdown pots.
  • On death at 75+, death benefits will be taxed as the recipient's income, when they draw the funds. For 2015/16 only, non-drawdown lump sums will be taxed at a flat rate of 45% - but income tax will apply to all post-75 death benefits from 2016/17 onwards.
  • The old tax distinction between crystallised and uncrystallised pots is gone. Within the LTA, the sole determinant of tax treatment will be the deceased's age at death.
  • Any individual beneficiary of a flexible pension can choose to keep their inherited pension pot in the drawdown wrapper and decide when (or if) they draw down on it.

These changes transform the wealth transfer planning equation. This places flexible pensions at the heart of inheritance planning going forward, opening up exciting new planning opportunities.

On the flip side, as widely expected, those accessing the new freedoms will pay the price of a reduced £10k ‘money purchase' Annual Allowance and no future carry forward.

  • This sends a clear message to maximise pension funding before accessing the new flexibility.
  • And the exemptions for existing capped drawdown users, and those only drawing tax-free cash after April, position advice as the map to navigate this tax minefield to keep options open.

Other pension news

  • State pensions: The new single-tier State pension from April 2016 will be at least £151.25, with the final figure being confirmed next Autumn. Meantime, the Basic State pension will be increased by 2.5% (to £115.95 for a single person) from April 2015 under the ‘triple-lock' guarantee.
  • Age 75: Following informal consultation, there will be no change to the 75 upper age limit for tax relief on pension contributions by individuals.
  • Means-testing: Fears that the new pension flexibility could lead to a lifetime's pension savings being deemed immediately available in means-testing assessments have been quashed. Assessments will be based on the annuity income the pot could provide, with higher income only being assessed if it's actually taken from the pot.

U-turn on IHT settlement nil rate bandsThe Government has confirmed that it has scrapped plans to introduce the IHT settlement nil rate band and replace it with new rules to be announced in next week's Finance Bill. The replacement rules will still seek to prevent tax avoidance through the use of multiple trusts.

The settlement nil rate band rules would have seen each settlor have just one nil rate band which they could allocate across all relevant property trusts that they've created. Trusts created before 7 June 2014 would have remained subject to the old relevant property rules, leaving two sets of complex rules operating in parallel.

The result could have saddled clients with trusts where the purpose is to accept the payment of death benefits, such as from life assurance contracts and pensions, with the burden of tax compliance and reporting, even where no inheritance tax is due.


Income taxMinor changes were made to allowances and thresholds for the new tax year:

  • The personal allowance will rise to £10,600 in 2015/16 for those born after 5 April 1938. This is an additional £100 on what had been previously announced. At the same time, the level at which income tax becomes payable at higher rates will rise in line with inflation to £42,385 (from £41,865), meaning that higher rate taxpayers with incomes below £100,000 will also be better off by £224 - a little less pressure on the ‘squeezed middles'.
  • Age related allowances will remain at £10,660 for those born before 6 April 1938.
  • From the 2015/16 tax year, a spouse or civil partner who doesn't have income to fully use up their personal allowance will be able to transfer up to £1,060 to their partner, provided that the partner is a basic rate taxpayer.

More charges, less choice for the non-domiciled
The charge to use the non-domicile basis of taxation is increasing.

Non-domiciles who choose to use the remittance basis and have been resident for at least 7 of the past 9 years, currently pay a charge of £30,000.

This will increase to £60,000 (from £50,000 in 2014/15) once they've been resident for 12 out of 14 years.

And a new charge of £90,000 will be brought in for those who've been resident 17 of the last 20 years in the UK.

The Government will also consult on making the choice to pay the remittance basis charge stick for a minimum of 3 years, so that non-domiciles are not easily able to chop and change the basis on which they're taxed.

Non-domiciles' taxation remains in the spotlight and this is unlikely to change. As offshore bonds are not taxed until a chargeable gain arises, they may offer another way for non-domiciled individuals to control when and how they pay their tax.

The Devil is in the Detail
We await the detail in the Finance Bill for all of the matters noted yesterday and above - and hope that it delivers on the promise of simplifying the taxation of trusts and IHT.

Wednesday, 3 December 2014

Autumn Statement News


I've trawled the news and reckon I have a great idea for a new business, making the best from today's announcements. It's at the end of this post.
 
For now, onto the financial planning stuff:
 
NISAs now outside Inheritance Tax

Super piece of Autumn Statement news today. ISAs (now actually called NISAs) will be tax free on inheritance from a spouse. An excellent piece of common sense policy making.

George Osborne said: “From today…when someone dies, their husband or wife will be able to inherit their ISA and keep its tax-free status.”

The Treasury estimates that 150,000 married ISA savers pass away each year, meaning their ISA tax break dies with them.

From today, if an ISA saver in a marriage or civil partnership dies, their spouse or civil partner will be able to transfer the ISA 'wrapper' and keep the ISA tax advantages.

DEC 8 ADDITION TO THIS POST. MORE DETAIL: http://greenfinancial.blogspot.co.uk/2014/12/isa-iht-good-but-not-great.html
 

Another sensible update is that surviving spouses will be able to invest as much into their own ISA as their spouse used to have, on top of their usual allowance from 6 April 2015.

The ISA allowance will rise to £15,240 which for monthly savers is a new maximum of £1,270

Pension death tax Cut confirmed

Previously announced as an aim, it was confirmed the cut to the 55% the death tax on pensions will happen.

Changes to starting rate of higher rate tax

The higher rate tax threshold will increase to £42,385 (from £41,865) as the personal allowance will rise to £10,600 next year (£100 more than had been previously announced).

Changes to starting rate of savings tax

Those earning under £15,600 need pay no tax on any of their savings income.

Stamp Duty

A big change ahead, with the Chancellor announcing reforms to stamp duty to “make it fairer”. He described the current system as one of the country's 'worst designed and most damaging of all taxes'.

The residential so called 'slab' system (I've also heard it called cliff-edge) will be replaced by tax bands, which will come into effect from midnight tonight.

There will be no tax paid on the first £125,000,
2% on the amount above that up to £250,000
then 5% on the next amount up to £925,000
and then 10% on amounts above that up to £1.5 million
then 12% on everything above that.
The ‘slab’ system meant that someone buying a house worth over £250,000 would pay 3% of the whole price of the property, rather than 3% of the amount over £250,000

For better: Under the new system, buying a house worth £275,000 would mean paying £4,500 less than under the old system.

For worse: However a property worth £5 million would see its tax increase from £350,000 to £514,000.

Currently stamp duty starts at 1% on houses worth between £125,000 and £250,000, rising to 3% above £500,000 and 4% for a home worth up to £1 million.

And finally... I note there will be a new tax credit for children's TV producers and also a £45m package of support for exporters
So I’m delighted to announce crowdfunding is available for my new business, exporting children's TV producers

Thur 4 Dec Update
More posted here: http://greenfinancial.blogspot.co.uk/2014/12/autumn-statement-little-more-detail.html
Final Finance Bill blog will be posted when available.

Friday, 14 November 2014

2014 Carbon Replacement


2014 Carbon Replacement

Flying for business is an important part of the continuing professional development I undertake for Green Financial. I attend a number of overseas conferences each year, I share my knowledge with other advisers around the world and I volunteer on a number of global best practice committees to 'give back' to my profession and increase my own knowledge to benefit clients of Green Financial.
Whilst video conferencing is used where possible and practical it is usually the case I travel abroad a number of times each year.

A flight to New York is about 3,500 miles and according to the Woodland trust that generates about 0.9 tonnes of CO2.



This year I have flown more than usual, staying in the air for 51,000 miles.
Based on that 13 tonnes of CO2 removed, we have made a donation to the Woodland Trust* to replace that CO2. By planting trees our donation will create 325m2 of woodland (around 3,500 sq ft)

Tree planting has a positive impact on the removal of carbon from the atmosphere - and woodland provides vital new places to help people and wildlife, in the UK, deal with climate change.

We donated via the Woodland Carbon charity. It is independently audited every five years. Their carbon projects are managed to the highest standard and are registered to the Government's new accreditation scheme, the Woodland Carbon Code http://www.forestry.gov.uk/carboncode

* The Woodland Trust is a charity registered in England (No. 294344) and in Scotland (No. SC038885). A non-profit making company limited by guarantee. Registered in England No. 1982873.
Registered office: Kempton Way, Grantham, Lincolnshire, NG31 6LL. Telephone 0800 026 9650


Friday, 3 October 2014

Award winning technology


This week I attended the Aberdeen Platform Awards.



This is not proof I am a railway enthusiast(!), more that I care about the technology Green Financial use to manage, monitor and assist with client portfolios.

At Green Financial we use 'Standard Life' as one of our 'platform' providers and many clients, including me personally, have assets registered on the Standard Life platform.

Therefore I was delighted when Standard Life won the overall 'Best Platform' award. This is not a "paid for bauble" like so many trophies seem to be these days, but a hard won award from a diverse and discerning judging panel. The picture above is of me with the award and David Tiller, Head of adviser platform propositions at Standard Life.

Here is what David emailed after the event:
"Last night we were absolutely delighted that Standard Life Wrap was named Platform of the Year at the Aberdeen Platform Awards, the culmination of two incredibly eventful years working with you to become the first major '2016 ready' platform.

While it is fantastic to be recognised by the industry's experts, in many ways the endorsement of the adviser community means more.

So to also be voted Best Large Platform Provider (AUM over £12.5 billion) by advisers is an enormous honour - thank you for your support


All of these accolades say as much about the success of your business as they do about ours.   Throughout the Leading Platform Programme, from the bulk conversion and discounted share classes, through to the launch of the new Discretionary Investment Hub and CGT scenario tool, we've only been able to move the platform forward with the insight, support and patience of the adviser businesses we work with.

In particular, we've only been able to take a progressive approach to RDR and the new platform rules because your business was willing to put long-term sustainability ahead of short-term convenience."


Kind and thoughtful words indeed.

Below is a long time friend of Green Financial, Steve Purdie, my Regional Manager at Standard Life.
 
In the interests of full disclosure I did not pay to attend, I was a guest of Standard Life. However, I have attended the event before as the guest of other firms and another platform & technology provider that Green Financial use, True Potential also won an award for their 'impulse saving' technology.
The Bribery Act & Inducements in full effect
 
In addition, other than a bottle of beer on arrival, I did not drink at the event, and had excellent discussions with senior figures at Standard Life over operating problems and platform improvements, so in that sense I treated the event as a working function, not a 'booze-up' or 'jolly'. The gift bag from the sponsors Aberdeen consisted of a tartan scarf, which has been pressed into action as a 'dolly blanket' for my daughter (see above!), 2 fingers of shortbread which my daughter scoffed, and a 'burns book' which has found its way to the local British Heart Foundation bookshelf. In addition, I made a personal donation on the night to the charity collection (Mind, for mental health)
 
In closing, the obligatory selfie!
 

Thursday, 2 October 2014

Me interviewing Dr Condoleezza Rice

I was recently at a conference in San Francisco
and had the honour of interviewing Dr Condoleezza Rice
live on stage for 15 minutes.
What an experience!



 
And finally...
afterwards, there was a photo opportunity:
my wife, Melissa, approved of the caption
;-)
 
 

Friday, 12 September 2014

Estate and Inheritance Tax Planning info & downloads

It was recently reported (The Times, The Telegraph, amongst others) that growing numbers of families are being hit by inheritance tax (IHT) due to rising house prices and the recovering economy.

Treasury forecasts show that the number of people paying IHT will rise by a third this year, from around 35,000 families to 44,000 families. Tens of thousands more will be pushed over the £325,000 threshold the following year.
Inheritance tax is paid at 40% on the value of an estate over the threshold (or two thresholds, £650,000, for a couple)

The £325,000 figure had steadily risen up until 2009 and at the moment, has been frozen until at least 2018.
If you’d like to read more about how you could approach estate planning and Inheritance tax planning, please have a look at my website and/or read my guides.

 
Website info: http://www.iangreen.com/taxandestate.php

 
The Green Financial Guide to Trust Planning



 The Green Financial Guide to Inheritance Tax
http://www.iangreen.com/downloads/iht14.pdf

 
Please remember this area of tax and law is subject to almost constant change, so please don’t take the information here, or in the guides as personalised advice.
If you’d like to consider personalised advice, please get in touch.

Thursday, 28 August 2014

50 tax tips 2014/15


50 tax tips 2014/15
 
Taxes, as we know, are one of the two great inevitables in life, but we can manage our financial affairs to minimise the impact of tax on ourselves, our family and our business.
 
In fact, the Government actually encourages us to make the most of the reliefs and allowances available.

While aggressive tax avoidance is now being targeted by HM Revenue & Customs, you can still ensure your own financial well-being by saving tax wherever possible.

When considering any tax planning there are four important points to bear in mind:

1. If a scheme sounds too good to be true, it probably is.In particular, do not get involved in a tax scheme that relies on the non-declaration of income or capital gains, as that would be illegal. A general anti-abuse rule counteracts tax advantages arising from abusive tax avoidance arrangements.

2. Bear in mind that the tax effect of a decision is only one element to consider.The commercial, practical and financial implications of the decision should always be taken into account. For example, you should not let the tax tail wag the investment dog.

3. Tax planning can be undone by not submitting the correct tax information on time, or not paying your tax liabilities by the due date.In either case HMRC will levy penalties which could exceed the tax due, or wipe out any tax savings made. You could also find HMRC pays closer attention to your tax affairs in the future.

4. Tax rules and rates change regularly.The tax regime is subject to frequent changes, so you need to review your financial situation regularly. Last year’s tax saving idea could be counter-productive this year.
 
 
Green Financial do not get involved in any tax planning 'schemes' that are not fully endorsed by HMRC. If you want speculative, close to the line tax planning, we are not the right company for you.
 
If you'd like 50 tried and tested tax tips, please download our free guide:
 

Friday, 11 July 2014

Pension 25% TFC won't be abolished?

Pensions minister Steve Webb has said the 25% tax free cash lump sum from pensions will not be scrapped.
This was in conversation with professional publication 'New Model Adviser'

The government has recently faced calls to abolish the 25% tax free cash lump sum to make up for lost taxes resulting from this year’s Budget announcement, that post retirement pension fund withdrawals would be taxed at a person’s marginal rate rather than 55%.

Labour leader Ed Miliband has called for the lump sum to be limited to £36,000.

Some Green Financial clients (over the age of 55)  have requested their 25% 'just in case' the lump sum does go.
Green Financial have never been ones to advise on financial planning based on speculation. Almost every year in my almost 2 decades in this profession, I've heard the 'rumour' that 40% tax relief on pension contributions will go!

So it's a personal decision for each client.

And if a politician is saying "it won't be scrapped" then surely that's enough?

After all, when has any politician, from any party, ever gone back on their word...?
Chortle.


UPDATE - 22 JULY 2014

Yesterday, the Government gave a clear green light to the radical rewriting of the pension rule book. The Government response to the 2015 ‘freedom & choice' consultation delivers on the Chancellor's Budget promise of much more DC pension flexibility and provides further detail on some of the changes in store from next April. Advisers can now start planning in earnest to ensure clients make the most of this new pension freedom when it comes.

Today's announcement confirmed:

  • DC flexibility will go ahead from April 2015.
  • A £10k AA will apply after a client accesses flexibility, to counter abuse of the new freedom.
  • The guidance guarantee will be delivered by a range of independent providers, including MAS and TPAS.
  • Tax-free cash will stay at 25%. [IG - there it is]
  • DB transfers will still be allowed - but only after professional advice.
  • Death benefit tax will come down from 55% - new tax rate to be confirmed in Autumn Statement.
  • Normal minimum pension age is going up to 57 from 2028.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/294795/freedom_and_choice_in_pensions_web_210314.pdf

Tuesday, 1 July 2014

ISA allowance raised to £15,000

The much publicised changes to the ISA rules take effect from today. Anyone who has already maxed out their ISA will be able to pay an extra £3,120 this tax year.
The total one can invest has increased from £11,880 before next April, to £15,000.
 
Despite the flexibility around taking money out of pensions, ISAs remain a valuable tax incentivised savings vehicle especially for those who have already paid the maximum to their pension.



Here is my blog post from 2012 (it still stands) on cash ISAs for people with investment portfolios
http://greenfinancial.blogspot.co.uk/2012/04/cash-isas-for-investment-clients-of.html
The high street institutions may be attempting to tempt people with advertisements for cash ISAs but is a cash ISA worth having?

Nationally, Only 26% of individuals earning between £100k - £150k maxed out their ISAs. Over 85% of Clients of Green Financial have, for the most part, already used the new allowance. The funds were ready to invest, in the non-ISA part of their portfolio and will be moved in to the tax free element today, thus maximising the time their investments are tax free. And we do all of this as part of our service. There remains no charge for new or existing clients to add to their ISAs.


2012/13 subscriptions Cash: £40 billion, Non-cash: £16billion

£443 billion was held in ISAs (as at April 2013) split almost 50:50 between cash and non-cash

Wednesday, 26 March 2014

Budget 2014


Budget 2014

Also viewable as a video at http://youtu.be/J6LDrh2k4bU

One wag commented that settling down to watch the budget is now a bit like the FA Cup Final: A once great national event no longer quite so relevant.

As ever, my comments below are not political, so I’m not commentating on the team in blue and yellow who kicked off, or the reds, but on the game itself.

Pleasingly for me, I called #TieWatch correctly (almost) for the fourth year running. I went for ‘light blue’ and I sartorially I’d have to concede that George’s tie was bright blue. But I was close enough.

Like many people I saw the picture of the new pound coin in the morning before the budget and realised this was going to cost me money.  I’d now have to pay for a new stock library image on the front of the attached tax tables in 2017. A printed copy is available to clients.
Coin factoid. The new £1 coin is not though, the first 12 sided coin since the ‘thrupenny bit’ was withdrawn when I was born in 1971. A silver threepence is still manufactured in very small numbers by the Royal Mint for inclusion in sets of Maundy Money.

But onto the serious stuff (so not the beer and bingo, hardworking folks)

Looking at the dry numbers first, rather than the savings and pensions comment still to come, the Chancellor offered little in the way of surprises because his Autumn Statement was little more than three months ago. Nevertheless, the 2014/15 tax data cards (see link below) have had to cope with a range of tax changes, including:
 
·         The increased personal allowance of £10,000 and the £145 reduction in the basic rate band.

·         Another round of increases to company car tax.

·         Various changes to capital allowances, including the doubling of the annual investment allowance (AIA) to £500,000.

·         A further limited one year extension of CGT reinvestment relief for seed enterprise investment schemes (SEIS).

 
Tax Tables
I trust that you find the tax rates useful, and that you find them to be a helpful basis for a discussion with us about your financial future.  As ever, there is a download on the homepage of my website

Income
Good to see the basic rate band increasing and for the first time in a while, an increase (albeit tiny) in the higher rate band. Call me a cynic but I suspect this was simply to ensure there wasn’t outcry over even more people being dragged into higher rate, as has happened over the last few years.

A nicer ISA?
Just the month before the budget we at Green Financial were lamenting the ridiculous numbers for ISAs, suggesting that rather than increase the allowance each year by a tiny amount (£11,520 to £11,880 this tax year) they should just make it £12,000 and leave it for a few years. So we were delighted to hear the news it will be £15,000 from 01/07/2014 and that much of the faffing about and silly rules regarding differences between cash and non-cash ISAs will go. The Treasury said “From 1 July 2014 ISAs will be reformed into a simpler product, the ‘New ISA’ (NISA) [IG: Geddit!?] , with an overall limit of £15,000 per year.”

It was also good to see the Junior ISA (JISA) amount will increase to £4,000 (from £3,720) and we look forward to the removal of silly rules around the old Child Trust Funds (CTFs)  and JISAs too, so the time when those two are merged and all children have access to the same product can’t come too soon.

As you know, I am all in favour of ‘Simplifying Your Finances’


Savings

Good that the 10p rate for savers has gone. For me, that was always just a trick part of an exam question. A needless piece of tax complexity. Good riddance.
https://www.gov.uk/government/publications/abolishing-the-10-rate-of-tax-on-savings-income-a-fact-sheet

National Savings

Excellent to see the return of competitive and safe products in the form of pensioner bonds but disappointing premium bond news.

I used to be a huge fan of premium bonds, they were a ‘must have’ component of many financial plans but the gradual erosion of the interest rate return and the change in prizes (basically more lower prizes more often, meaning you feel you win more times but the actual amount you win is less) means these just don’t represent good value and the fact you could now have more invested is not as good as it sounds. Don’t get me wrong, there is still a place for premium bonds but it’s the powers that be, not the holders that are the real winners at the moment.

While the exact details of the bonds for people aged 65 or over will be finalised in the autumn, the government’s current assumption is that NS&I will offer products which would pay rates of 2.8% gross/annual equivalent rate (AER) on a one year bond and 4.0% gross/AER on a three year bond under current market conditions, with an investment limit of £10,000 per product. These will be taxed in line with all other savings income.

Pensions

This was the big one wasn’t it? The day before the budget I was speaking with a client and said, I can’t see them fiddling around with pensions AGAIN. I was right in so much that it wasn’t a fiddle but a bombshell. And a good news bombshell at first sight.HM Treasury themselves no less were quick to tweet “Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, anytime they want”

I just hope it is true. So many times over the last decade plus, there have been headline grabbing pension announcements in the budget and then when the small print is devoured it transpires it wasn’t quite the deal we thought.

The Chancellor’s stated view was that by removing the effective requirement to buy an annuity, people will have greater flexibility in accessing their pensions.

This means that people can choose how they access their defined contribution pension savings; for example they could take all their pension savings as a lump sum, draw them down over time, or buy an annuity.


We’ve seen much fiddling with pensions recently, the backdoor stealth of lowering the lifetime allowance to essentially restrict upfront tax relief being one. Yet the pension announcements all seemed benign. Removing the 55% tax charge so one just pays one’s marginal rate of tax is fair and just and how it should have been to start with.

Annuities still have a place in planning for some people. A guaranteed income for life is not to be sniffed at. Remember my blog about the last survivor of world war one who had an annuity that paid him an index linked pension for 58 years? But annuities are not right for everyone and exceedingly poor value for most at the moment. At Green Financial we rarely recommend an annuity where an alternative exists. So it was great that the need to buy one has been completely removed but to restate what I said at the start of this section, I just hope the promised flexibility actually comes to pass.

Alongside this, the government is introducing a new requirement for pension providers to make sure that everyone retiring with a defined contribution pension pot receives free and impartial face-to-face guidance on the choices they face when deciding how to use their retirement savings. Surely good news for me!

In the meantime, as a first step towards the reform, the Chancellor announced a number of changes to the current rules that will come into effect from 27 March 2014. This will allow people to have greater freedom and choice now over accessing their defined contribution pension savings at retirement. These are:

  • reducing the amount of guaranteed income people need in retirement to access their savings flexibly, from £20,000 to 12,000
  • increasing the amount of total pension savings that can be taken as a lump sum, from £18,000 to £30,000
  • increasing the capped drawdown withdrawal limit from 120% to 150% of an equivalent annuity
  • increasing the maximum size of a small pension pot which can be taken as a lump sum (regardless of total pension wealth) from £2,000 to £10,000 and increasing the number of personal pots that can be taken under these rules from two to three

The linked graphic is how HM Treasury summarise the ‘budget for savers’
http://www.flickr.com/photos/hmtreasury/13263282243/

Summary and other stuff

I’ll produce further literature with all the other bits and bobs over the next few days. I’ll email it out to clients and put it on the website at www.iangreen.com and facebook at www.facebook.com/GreenFinancial
 

The Chancellor said this was a budget “for makers, doers and savers”.

I’m off now to address all of those:

DOING my job

MAKING clients finances simpler and

SAVING them time, money and tax.

Local Award Billboard



Dear Clients and Blog Readers

A quick note to say thank you to those of you who left me a review on http://www.vouchedfor.co.uk/rate-review/709
 
As a result of your support Green Financial won the accolade of Best Rated Firm in South West London.  Something we’re really proud of and couldn’t have achieved without your help.  Thank you again.
 
 

The team at VouchedFor have twisted my arm and we’re shouting about our success through a billboard around the corner from the office, outside East Putney Tube station.  We’ll also be taking a press advert out in SW Resident magazine.
 
 
 

If you are passing or reading, we hope they catch your eye!

Thanks again,

Ian
 
PS
My teenage son uses the tube station in question. He's not impressed...
;-)