Finance Issue 4 / Spring 2018 Eastwood Financial Services Ltd
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Essential FINANCE ISSUE 4 / SPRING 2018 EASTWOOD FINANCIAL SERVICES LTD LIFETIME ALLOWANCE LANDLORDS STATE PENSION AGE Increased at last. How changes may affect you. What is yours? Contents 03 Inheritance tax Making the system less complicated. 04 Bloodstock Equine insurance when you need it most. 05 Global markets Turbulent ups and downs. 06–07 Allowance increases Invest more in your pension. 08-09 Landlord tax relief Changes to buy-to-let Welcome to the Spring edition of the investments. Eastwood Financial Services magazine. 10 Pension age increase Spring is a time of new beginnings in nature and often What age will you retire? an organic time to bring renewal to many facets of our lives. 11 Automatic enrolment The next stage for pensions. As you read this edition, we’ll be at the beginning of another new year… another tax year that is! All of your planning and actions for the 2017/18 12-13 Volunteers required tax year are behind you but now is a good time to plan for the year ahead The Yorkshire Air Ambulance and as always, we are on hand to assist. need you. The latest edition of our magazine covers a number of topics ranging from pensions to equine insurance – hopefully there will be something of 14-15 Life cover interest for everyone. Tax efficient assurance plans. Our avid readers will recall that in the last edition, we covered our efforts 16 News for Yorkshire Cancer Research. In this edition, we feature the Yorkshire A round up of events. Air Ambulance who are looking for volunteers to get involved with the Tour de Yorkshire weekend. Leaving the Lycra to the professionals, this article shows other ways in which the general public can get involved. To finish off with our news page, we are delighted to introduce you to our newest recruit and to also cover our attendance at the Kirklees Business Week. Wishing you all the joys of spring and we look forward to catching up with you in the summer. Karen Wynard Managing Director 2 ESSENTIAL FINANCE SPRING 2018 New focus on inheritance tax The government has requested a review of inheritance tax (IHT), focusing on making the system less complicated. The Chancellor, Philip Hammond, assessing their complexity and its previous recommendations on has asked the Office of Tax impact. Unsurprisingly, IHT ranked income tax and national insurance Simplification (OTS) for “proposals… close to the top for complexity – contributions have yet to be for simplification, to ensure that the coming third behind two sets of implemented. If you have not system is fit for purpose”. capital gains tax computation rules. reviewed your will since the RNRB IHT earned this position thanks to started in April 2017, now is the The OTS has been asked to “focus no fewer than 94 reliefs and nearly time to do so. The RNRB could on the technical and administrative 200 pages of legislation. save your estate up to £70,000 in issues within IHT” and also to tax (up to £140,000 for a couple) consider “whether the current If the OTS repeated the exercise by 2020/21 but, as Mr Tyrie made framework causes any distortions today, IHT could well come first clear, it is far from straightforward. to taxpayers’ decisions surrounding because of the extra complexity The end of the tax year offers also transfers, investments and other added by the residence nil rate opportunities to use your annual relevant transactions”. This band (RNRB) and its associated IHT exemptions, as covered in our means the OTS will be looking at downsizing rules. These rules led feature article. simplifying the rules, instead of the then head of the Treasury proposing radical reforms. The Select Committee, Andrew Tyrie, to Chancellor may not reduce IHT say, “The main beneficiaries of this revenue, as the tax is forecasted to [legislation] would be tax advisers The Financial Conduct Authority does not regulate tax advice. raise £5.4bn in 2018/19. and lawyers”. Levels and bases of taxation and tax reliefs are subject to change and their value depends on individual Appropriately, the OTS did look at You should not defer your estate circumstances. IHT when developing its ‘Complexity planning because of the impending Tax laws can change. Index’ in 2015. The Index examined OTS review – there is no timetable The Financial Conduct Authority does not regulate will over 100 aspects of UK taxation, for the OTS to respond, and their writing, trusts and some forms of estate planning. SPRING 2018 ESSENTIAL FINANCE 3 EASTWOOD PRIVATE CLIENTS It’s in the blood... Essential equine insurance for owners and trainers. With the National Hunt Spring Eastwood Private Clients hold an Festivals upon us and the new enviable position in this arena For more information Flat season on the horizon the having arranged the insurance eyes of the sporting world will for many well-known horses about bloodstock descend upon the hallowed turf of and unfortunately having had to insurance, visit www. Cheltenham, Aintree et al. negotiate claims for subsequent eastwoodprivateclients. losses. Whether you are involved first co.uk /bespoke/ hand in the sport of Horse Director Wayne Johnson is a bloodstock or call racehorse enthusiast who will Racing, an avid follower or once a member of the know your horse’s insurance a year Grand National viewer the requirements and will be aware Eastwood Private Clients excitement at this time of year of when they are due to run. team on 01484 820022. reaches fever pitch. He will talk with you about their For owners and trainers alike performances and will be on hand sourcing the correct insurance whenever required. for our equine heroes is of Racehorses are fragile and paramount importance. The unpredictable by nature hence danger and high octane nature it is essential for any owner to Eastwood Private Clients is the new name for of the sport mean that accidents be represented by a Broker the high-net worth division of Eastwood & Partners and is based at Northumberland House, are inevitable and when the who understands the industry, Northumberland Street, Huddersfield. worst happens comprehensive has a passion for the sport and Eastwood Private Clients Ltd is an appointed insurance cover and specialist is available to react to every representative of Eastwood & Partners Ltd which is authorised and regulated by the Financial claims advice is imperative. situation. Conduct Authority. 4 ESSENTIAL FINANCE SPRING 2018 Shaky start to 2018 for global stock markets Global markets were hitting new all-time highs repeatedly in 2017 before encountering some turbulence in 2018. If you were invested in world stock Index closing at a new high 70 guaranteeing a post-inflation loss. markets last year, you should times in the year, itself a record. A compromise for fresh investment have enjoyed some healthy could be to drip feed sums into returns, although markets have UNPREDICTABLE FUTURES funds regularly, rather than make a experienced a much bumpier ride Despite this performance, markets single purchase. of late. have proven their unpredictability Please get in touch if you would like at the start of 2018. In 2017, the benchmark for to discuss your investment options. developed markets, the MSCI If you are a long-term investor, it’s The value of your investment can go down as well World Index, was up nearly generally unwise to suddenly turn as up and you may not get back the full amount 10% in sterling terms, while the into a short-term trader because you invested. corresponding emerging markets of market volatility. In any case, Past performance is not a reliable indicator of future performance. index rose by over 20%. The US holding cash is an unattractive option when base rate is 0.5% and Investing in shares should be regarded as a long- epitomised the strength of global term investment and should fit in with your overall share markets, with the Dow Jones inflation is running at around 3%, attitude to risk and financial circumstances. SPRING 2018 ESSENTIAL FINANCE 5 The lifetime allowance increases – at last Investors can save more into allowance is now moving in the opposite direction — although £1.03 million remains significantly less than pensions from 6 April 2018, the £1.8 million permitted in 2012. The government when the lifetime allowance (LTA) has also announced the LTA will rise annually in line with inflation. The increase at the start of the tax year increases from £1 million to is based on the previous September’s CPI figure, in £1.03 million. this case 3%. The LTA is a critical part of pension planning. A HOLISTIC APPROACH It is the total value of payouts from pension savings, Investors need to be aware of the impact of the LTA on as a lump sum or income, before additional tax their total potential pension savings. This can include charges apply. such assets as former or current workplace pensions, so it’s important to get up-to-date valuations for your After reductions to the LTA in recent years, the LTA calculations. 6 ESSENTIAL FINANCE SPRING 2018 If you think you may breach the LTA when taking • Fixed protection lets you fix your LTA at £1.25 retirement benefits, depending on your personal million, but only if no pension contributions have circumstances and how much of your pension been made after April 2016, including relevant benefits you intend to take, you may want to consider accruals made under DB schemes. alternative retirement provision, which could include • Individual protection may apply even if there have other investments or maximising your ISA allowances. been contributions. This provides a personalised DEFINED BENEFIT TRANSFERS LTA equivalent to the value of your pension on 6 April 2016, which cannot exceed £1.25 million.