Savings & Investments
There is a wealth of products available to use as a savings or investment vehicle for your spare income, windfall or inheritance. MacRobins Ltd Ltd will supply you with truly independent advice across the full range of products available in the marketplace. We have highlighted the most common collective products available below.
Individual Savings Accounts (ISAs)
These are tax efficient savings accounts and the resultant income and capital gains do not have to be declared. Not surprisingly, there are limits on the contribution levels that each individual is permitted to make each tax year. There is a choice of where monies can be invested ranging from low to high risk sectors.
Unit Trusts, Open-Ended Investment Companies (OEICs) and Investment Trusts
These investments work by pooling funds of investor’s money, which is then used to buy a range of shares, gilts, bonds or cash deposits. The main difference between Unit Trusts and OEICS is the way your money is invested. When you invest in a Unit Trust you are purchasing a unit (a proportion of the total fund) whereas with OEICs you are purchasing the shares themselves. When you invest in an Investment Trust you buy a share in a company that is set up for the purpose of holding investments. An investment Trust is also permitted to borrow money (gearing), which can increase the volatility of the investment.
Life Assurance Bonds
These are investments offered by life assurance companies where the actual life protection element of the policy is very small (often no more than 1% of the amount invested). They are single premium whole of life investments where the investment has no term attached to it – it can therefore be continued for as long as you wish. Investments can be made into various funds held under the main policy or alternatively a single fund. The tax structure is complicated but, for basic rate taxpayers, it is tax-paid within the fund.
Alternative investment vehicles are available dependent upon individual’s specific requirements including investments in: individual shares; property; Venture Capital Trusts (VCT); and Enterprise Investment Schemes (EIS). Investments in VCT’s and EIS’s also attract tax relief.
Inheritance Tax Planning
Property prices have been escalating above and beyond the inheritance tax threshold in recent years. Inheritance Tax (IHT) strategies can be set up to lessen the financial impact of your death upon your beneficiaries. This is a complex area of finance and the team at MacRobins Ltd has years of experience dealing with the issues surrounding IHT. It is important to know that gifts to certain trusts may give rise to a Chargable Lifetime Transfer tax and therefore advice should be sought before making any such transfers.
This applies to transfers of assets during life and on death above a set threshold. Any excess is subject to a tax charge. Both the threshold and the tax rate are reviewed annually and are subject to change. A transfer is not normally subject to tax if the donor survives seven years after the initial transfer took place. On death, the value of the remaining estate is added to the total of chargeable lifetime transfers in the previous seven years in order to find the tax due.
Tax Exempt Transfers
There are a number of transfers that are exempt from this taxation. The most common being transfers between spouses. Our financial team would be more than happy to discuss other tax-exempt transfers and see if you can utilise these as part of your overall strategy.
Tax Relieved Transfers
There are also a number of transfers that qualify for tax relief status. An example of which is ‘Business Property Relief’ whereby a business is transferred during lifetime or on death.
Without a will the intestacy laws apply on death. To ensure your wishes are met, it is imperative that a valid will is drawn up.
There is a wide range of trusts available for IHT Planning. To be effective the correct trust must be used.
School Fees Planning
The decision to provide your children with independent or further education can be an important but costly one, often placing stress on a family’s financial situation. There are several options available for parents wishing to save for their children’s education ranging from lump sum investments through to regular savings plans. MacRobins Ltd will offer rounded advice incorporating ways of reducing risk and protecting your saving’s intentions against unforeseen circumstances.
Asset Allocaton & Portfolio Management
It is vital that your asset and investment portfolio continues to match your attitude to risk. Your circumstances will change throughout life and MacRobins Ltd can help to establish the right investment portfolio for you. Maintenance of this match can be achieved through yearly statements and reviews as necessary. One area of increasing need for investment advice is to trustees who are responsible for ensuring assets match their beneficiaries’ needs.