Providing for your future

Wealth planning is not just about the long term. There are also short and medium-term challenges that you may need to review, including the recent changes to personal tax, residency tests and pensions provisions.

In this video Alison Hill explains some key financial issues to consider in the year ahead as you look to maximise your income, invest and provide for your future.

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Providing for your financial future can be a difficult and time-consuming process. This is not made any easier by tax changes and a volatile financial market.

We can help you navigate through these turbulent financial times and plan around ongoing tax changes: some of which I will highlight in this video.

April 2013 this year will see the introduction of a Statutory Residence Test. If you’re an internationally mobile individual spending time in the UK, or have left the UK but still spend time here and retain connections with the UK, you should review your position under the new rules. In many cases the new test will provide greater certainty, however , as always, the devil is in the detail and this is where we can help.

Pensions remain one of the most tax-efficient vehicles for providing for your future in the UK. Despite this, only 40% of working age men and 37% of women in the UK have a private pension.

The rules for pensions and the tax relief they offer are changing and you must act by 6 April 2013 in order to obtain tax relief at 50% and by 6 April 2014 before the annual contribution limit is reduced. In 2014 changes to the lifetime contribution limit will also come in to effect so there is a lot for you to consider in the year ahead. We can assist with maximising the benefits available and can help you navigate the rule changes.

Please speak to me or my colleagues if you wish to discuss these changes or have any other queries in regard to your tax affairs and financial future.

Changing tax rates

The 45% additional rate (over £150,000) now applies. 

New test for tax residence

A new statutory residence test came into effect on 6 April 2013.

If you are an internationally mobile employee, the new rules bring welcome certainty in how your UK residence is determined. But, the changes could have a less certain impact, therefore your residence position should be reviewed to see how it is affected by the new rules and whether steps can be taken to strengthen the position.

Key factors determining residence are:

  • day count
  • full-time working
  • location of family
  • location of accessible accommodation, and
  • residence position for previous tax years.

If you think these new rules will have an impact on your residence position, please contact us to discuss this.

Pensions

Pensions remain one of the most tax efficient investment vehicles available in the UK.

We can help you assess the benefits available from investing in a pension and provide tax and/or investment advice. 

Taking this kind of advice can be beneficial as the rules and allowances are changing and complications can arise. So it’s more important than ever to review your position and make sure that you are maximising the reliefs.

Key pensions considerations:

  • The annual allowance (the amount you can contribute to a pension and receive tax relief) is reducing from £50k to £40k from 6 April 2014. 
  • Acting quickly could maximise potential contributions as it is possible to carry forward unused annual allowance from the previous three tax years.
  • The lifetime allowance is reducing from £1.5m to £1.25m from 6 April 2014.
  • It is possible to retain a £1.5m lifetime allowance by registering for Fixed Protection 2014 with HMRC (and adhering to the required conditions) before 6 April 2014.
  • Those who have registered for Enhanced Protection, Fixed Protection or Fixed Protection 2014 with HMRC will need to watch for being auto-enrolled into a workplace pension (as this will jeopardise that protection unless they opt out within one month of being enrolled).

Child benefit

If you’re in the higher income bracket, your child benefit may be clawed back via your self-assessment tax payment or PAYE coding unless you elected not to receive child benefit before the beginning of the tax year – if one householder earns over £50k then it is clawed back from the higher earner. A parent earning between £50k and £60k, with two children, would suffer a 57.53% marginal tax rate (with four children this rises to 71.47%). A liability to this high income child benefit charge may mean you having to complete a tax return even if you have no other requirement to do so.

Investment advisory

Determining what the correct investment strategy is for you will depend upon your unique circumstances. Our priority is helping you preserve and grow your wealth through objectively and carefully considered investment strategies.

We can assist with each stage of the investment process including:

  • Modelling your future cashflow requirements;
  • Investment portfolio construction and monitoring;
  • Arranging and administering cash deposits;
  • Investment manager selection and ongoing performance monitoring;
  • Legal and trust issues;
  • Real estate investment; and
  • Pension planning

Please contact us  to learn more about how we can help you meet your investment goals.