I need a financial advisor
Discussion
So, some reasonably complex issues here.
1) I am working for a listed company for the first time and have been granted share options, some of which have vested now that I am three years in. I am able to exercise these options. I need to know what the tax implications of doing so are - I obviously want to minimise tax but have no idea how to do so.
2) I am married to an American, so need very specific advice on implications (she has double taxation issues from the US Federal Government should
3) I need specific advice on pension saving, given that I am in a band where what you can put in tax free is highly restricted. For example, do I have some backdated allowance I can use, and can I put some of these shares in there and minimise tax?
4) I need someone who can advise on the implications of renting out a flat that I kept when we bought our house, as the new tax treatment is less forgiving of higher earners. I have built my own spreadsheet of implications, but really need it sense checked by someone who knows what they are doing, so I can save adequate amounts to pay the tax at tax return date next year.
We have had real issues finding advisors. Most of the folk here in London who Lady F has found (to deal with her US issues as well) say we need about £1m in unencumbered liquid assets to interest them - which we do not. However, we both earn six figure salaries and have share options etc, and really need to know what to do with what we do have. Even paying down the mortgage would be great - but I want to make sure we do this in the most efficient way.
Do any of you guys know a reliable, responsive and competent advisor? I have been shocked when asking my friends, many of whom do better than I do, that no-one really seems to engage in any financial planning short of using the ISA allowance and paying down the mortgage.
I know the USA issue is very specific and technical - but I would be happy with some advice just for me at this point!
Primary goals are really to set up an education fund for any kids we do have, pay down mortgage as early as possible, and keep my flat as a future source of retirement income/nest egg We can survive and pay mortgage OK on one salary if one of us loses a job, at least for a while.
1) I am working for a listed company for the first time and have been granted share options, some of which have vested now that I am three years in. I am able to exercise these options. I need to know what the tax implications of doing so are - I obviously want to minimise tax but have no idea how to do so.
2) I am married to an American, so need very specific advice on implications (she has double taxation issues from the US Federal Government should
3) I need specific advice on pension saving, given that I am in a band where what you can put in tax free is highly restricted. For example, do I have some backdated allowance I can use, and can I put some of these shares in there and minimise tax?
4) I need someone who can advise on the implications of renting out a flat that I kept when we bought our house, as the new tax treatment is less forgiving of higher earners. I have built my own spreadsheet of implications, but really need it sense checked by someone who knows what they are doing, so I can save adequate amounts to pay the tax at tax return date next year.
We have had real issues finding advisors. Most of the folk here in London who Lady F has found (to deal with her US issues as well) say we need about £1m in unencumbered liquid assets to interest them - which we do not. However, we both earn six figure salaries and have share options etc, and really need to know what to do with what we do have. Even paying down the mortgage would be great - but I want to make sure we do this in the most efficient way.
Do any of you guys know a reliable, responsive and competent advisor? I have been shocked when asking my friends, many of whom do better than I do, that no-one really seems to engage in any financial planning short of using the ISA allowance and paying down the mortgage.
I know the USA issue is very specific and technical - but I would be happy with some advice just for me at this point!
Primary goals are really to set up an education fund for any kids we do have, pay down mortgage as early as possible, and keep my flat as a future source of retirement income/nest egg We can survive and pay mortgage OK on one salary if one of us loses a job, at least for a while.
gibbon said:
Firstly, i do not work in this sector, so this is purely my amateur musings, however our situations sound fairly similar, though my better half is canadian!
If your income, including your flat income exceeds £210k then you will be capped at £10k for tax relief eligible pension contributions. As long as you have been a member of a pension scheme or SIPP of some kind for the last three years, even if you have not contributed over those years, you will have claw back available of up to £40k per year.
I decided to put enough into my pension to mitigate the tax liability of my flat income, essentially just stick your flat income straight into your pension, and use the clawback to claim the extra over the £10k limit, this depending on flat income, should work for a few years.
You should also think about if you ever want to sell your investment flat, as increasing in value will be taxable whilst the flat is rented out. If you have seen large increases over the recent past, and now start to rent it out, the price increase is simply averaged per year of ownership, not marked to how the market actually performed, so you may end up with a tax bill on sale, on a property that hasnt actually increased over the period of rental, i hope that makes some sense. Again, there is some mitigation to this, in the form of renters relief and cap gains allowances, but its something once should consider. My conclusion was my rental flat either became something i kept for around 3 yrs rented out, or very long term hold, the worst period seemed to me a medium term hold in terms of tax liability.
So yes, I have the capped pension at £10k. I will look to use the clawback.If your income, including your flat income exceeds £210k then you will be capped at £10k for tax relief eligible pension contributions. As long as you have been a member of a pension scheme or SIPP of some kind for the last three years, even if you have not contributed over those years, you will have claw back available of up to £40k per year.
I decided to put enough into my pension to mitigate the tax liability of my flat income, essentially just stick your flat income straight into your pension, and use the clawback to claim the extra over the £10k limit, this depending on flat income, should work for a few years.
You should also think about if you ever want to sell your investment flat, as increasing in value will be taxable whilst the flat is rented out. If you have seen large increases over the recent past, and now start to rent it out, the price increase is simply averaged per year of ownership, not marked to how the market actually performed, so you may end up with a tax bill on sale, on a property that hasnt actually increased over the period of rental, i hope that makes some sense. Again, there is some mitigation to this, in the form of renters relief and cap gains allowances, but its something once should consider. My conclusion was my rental flat either became something i kept for around 3 yrs rented out, or very long term hold, the worst period seemed to me a medium term hold in terms of tax liability.
Edited by gibbon on Monday 22 May 12:07
In terms of my flat, I have owned it since 2004, started renting it in December last year. I really don't want to have a CGT bill on sale dating back to when I bought it, as being a London property it probably tripled in value from purchase to when I started renting it. I had assumed that CGT charge would only apply from its market value when it ceased to be my primary residence.
I definitely need some advice - muddling along as I have been is going to get me in trouble...
garyhun said:
When I was married to an American citizen we used these guys in London - http://www.buzzacott.co.uk/services.
It's been over 10 years since I've dealt with them but they were very good.
Thanks! Have sent them an e-mail.It's been over 10 years since I've dealt with them but they were very good.
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