General guidance - Intelligent Money Private Clients

[Intelligent Money]

Understanding your investment options and how an ISA, Pension or GIA work is only part of the story.

To complete the story you need to understand how these financial tools (together with other options, such as mortgage overpayments) can work to help you achieve what you want to achieve and support your lifestyle and future life plans.

To help you with this we offer full financial and tax guidance. This provides you with all the support you need to fully understand your financial options and make informed decisions about the best solutions for you.

We aim to remove jargon and speak in plain English so you can be confident in the decisions you make.

We will also use our professional expertise and experience to make sure you are aware of tax considerations and the vagaries of the financial world that you may not be aware you should consider.

With the help of our Private Client service we hope that you will be confident and happy to make your own informed decisions about the right way forward for you, which may or may not include IM investment solutions.

This thread is wholly related to answering any questions you may have about financial & tax guidance and the information and guidance that goes behind this.

If your post is not related to general financial guidance, we have four other threads:

• General investments
• Individual Saving Accounts (ISAs)
• Pensions & SIPPs
• Tax (including IHT) Planning

Intelligent Money

[Intelligent Money]

Jockman said:

Would be useful to get a perspective from Nik.

I would normally add the Corp tax rate to the dividend tax rate before comparing.

Hi Jockman

It will defiantly require closer attention following the new Corporation Tax rate in 2023.

Assuming that Income Tax, NI and Dividend Tax rates are as they are now or remain in proportion it will be very heavily dependent in the income that you draw.

Income with the basic rate band:
Taken as Income effective tax rate : 45.80%
Taken as Dividend effective tax rate : 32.50%
Income with the higher rate band:
Taken as Income effective tax rate : 55.80%
Taken as Dividend effective tax rate : 57.50%

Income with the additional rate band:
Taken as Income effective tax rate : 60.80%
Taken as Dividend effective tax rate : 63.10%


The other consideration is who pays the tax, in the case of drawings taken as income the business obviously carries the cost while in the case of dividend income the business will pay the Corporation Tax while the Individual carries the liability for the tax on dividends.
There are instances where the business may prefer to carry the costs and others where the individual may prefer to carry the Tax liability.

A typical financial answer of “it depends” I guess but the new rate will defiantly mean it’s worth reviewing the way you take income from your business

Cheers

Nik

[Intelligent Money]

SpunkyGlory said:

I have been thinking about seeking out an FA for financial guidance, primarily around investments and pensions and ensuring I'm maximising opportunities and tax breaks etc. But my minimum investment is significantly(!) less than £100k, is this guidance that I would still be able to get from IM?

Hi,

As Mr P has said very happy to help if we can, wether you become a client or not, and there is not minimum for PH'rs.

Drop me an e-mail at [e-mail] if you want to get in touch

Cheers

Nik

[Intelligent Money]

PabloEscortCar said:

I have asked this on another thread, but assuming it is allowed:

I have recently sold a house and have ended up with a lot of money (by our standards) sitting in the bank, around £800k.

I am retired (65) but my wife still wants to work, we don’t owe anyone any money, have a nice roof over our heads, have the cars I want and we don’t have any kids/grandkids to worry about. We can afford to pay our bills with the bits and pieces that come in and I dare say with some careful planning we could probably live the rest of our lives well just by eating up all the capital, but I would rather not do that.

So what I am looking for is an investment plan that makes a reasonable return for a reasonable risk. I would like reasonable access to at least half the money in case we come across a bargain bolt hole somewhere nice, unlikely to happen but just in case something turned up.

Had I wanted to put it into property and do the renting thing I could have just kept the house I had and done that, I don’t want to do that. As much as I like cars I have no space for any extras so not looking to invest in classics.

The simplest/safest thing would obviously be to split it up and stick it in banks and get whatever I can in the way of interest, but even with interest rates almost certainly creeping up in the near future the returns would still be grim. Not interested in Crypto, don't get it, not doing it.

Any suggestions welcomed.

Hi PabloEscortCar

The difficulty is that one mans reasonable risk is another mans too safe and the other mans big punt!

The first consideration is usually "what do you want the money to do for you?" i.e. do you need some income from it? If so how much and when?
Is it a lump of money to be used "adhoc" over the coming years to fund one offs? Things such as a bolthole as you mention, or holidays, presents for family, home improvements etc.

Then you need to consider the "tax wrapper" i.e. use of ISA allowances both now and in future years, use of a General Investment Account
(GIA) to make use of your CGT allowance and any Pension options that may be available to you.

Then it is down to the investment options themselves.

The risk you are happy to take is often driven by two things, your fear of either losing some of the value of your investment or losing out on potential growth, and the level of understanding you have about the investment you make. Something you don't understand will often feel higher risk than something you do.

Having some flexibility about when you need to access the funds is also a good way to reduce the risk with stocks and shares based investments. Often if you are able to chose when you exit you can pick a time when your valuation is good.

With so many variables a conversation is often easier than e-mail or forum posts, I'm very happy to set up a call, no charge or obligation, to chat through the things you may want to consider. Just drop me an e-mail at [e-mail] if a call would be useful.

Regards

Nik

[Intelligent Money]

twokcc said:

ISA rules. Can I transfer a cash from an old stocks and shares ISA to a new cash ISA.
Details hers
https://www.pistonheads.com/gassing/topic.asp?h=0&...

Transfer info seems to say yes I can but as this would require opening a second cash ISA (to be funded by cash from old S& S Isa) from existing others say cannot due this.

IF - any advise appreciated.

Hi twokcc

I have copied this answer to your question in another thread below, so you have both answers in one place.

For this tax year 23/24 you can only contribute to one S&S ISA and one Cash ISA per tax year, so if you have made contributions to a Cash ISA already this year you won't be able to open another one until April 6th 2024. Ironically from that point the new ISA rules will be in-place which will allow multiple ISA to be contributed to in a tax year.

Your current provide may have a money market option within the S&S ISA that may offer you an option that is similar to cash in the meantime.

To answer this question, if you haven't contributed to a Cash ISA this tax year then you should still be able to open a Cash ISA and transfer funds over from a S&S ISA. This will be subject to the provider allowing you to do so, but nothing in legislation prevents it.

Hope that helps

Cheers

Nik