Offshore 'cluster' bonds

According to budget documents HMRC will introduce measures to combat tax avoidance on insurance policies, capital redemption polices and annuity contracts.


No clients, who purchased their product via Green Financial, will be affected by this.
The measures apply to so-called cluster arrangements where tax charges are confined to just one segment of life assurance bond.

Green Financial have always considered this very aggressive tax planning and subject to threat of legislation or query by the authorities.


With the 'cluster policies' an example would be a bond holder who wants access to their cash before the end of the bond who then redeems nine segments of a ten segment bond while the taxable gains are applied only to the tenth.

It is still the case that with investment bonds we recommend due care and attention should be made to how withdrawals are taken, so as not to trigger unneccesary tax - but this is not to be confused with the type of plan and action the budget has outlawed.

If you are a Green Financial client and have any questions regarding this matter or your investment, please contact us.

Tax tables – March 2012

Please find below a link to our tax tables, outlining the key tax data in George Osborne’s Budget of 21 March. The Chancellor unveiled a range of measures that left no doubt that the ‘age of austerity’ is not yet over – though thanks to a steady stream of pre-Budget announcements and leaks, Mr Osborne had little to offer in the way of surprises.
The Budget highlights included:

• The personal allowance will be increased to £9,205 in 2013/14, but the higher rate threshold will be reduced by £1,025 to £41,450.

• There will be a limit on the maximum amount of income tax reliefs that can be claimed from 2013/14.

• As expected, from 2013/14 there will be a drop in the higher rate of income tax from 50% to 45%.

• The so-called ‘mansion tax’ has taken the form of higher stamp duty on house sales over £2 million.

• Child benefit is to be phased out where income is over £50,000.


The tax tables are available for download on the website at: www.iangreen.com/taxtables.pdf

or to view at www.facebook.com/GreenFinancial

These will be joined by budget summaries and other info in the days to come.


We trust that you find the enclosed tax rates useful, and that you find them to be a helpful basis for a discussion with us about your financial future.

Card £1.99, Flowers £10.99, Mum. Priceless.

With mothering Sunday this weekend, what is a mum actually worth?

The answer of course, is priceless.

But those actuarial types at a life insurance company have calculated a number.

And not just mum, but dad too. Legal & General (www.legalandgeneral.com) have been surveying the nation for over 30 years and the latest figures can be summarised as follows:

Value of a PARENT

Legal & General in their ‘Value of a parent survey’ state it could cost £30,000 a year to pay someone to replace a mum’s domestic work and £21,000 for a dad. The actual national calculated averages are £30,032 and £21,306.

These figures are calculated using the number of hours spent on household chores and childcare, then multiplied by the average hourly pay rate for equivalent jobs, as published by the Office of National Statistics (ONS). Finally the weekly numbers are multiplied by 52 to obtain the average value.

A mum is perceived to do, on average, 18 hours worth of work a week around the home. However, this is 53 hours less than the 71 hours of actual work they do [author’s note: My mum says she didn’t need a survey to tell her that!]

Dads are perceived to do an actual 15 hours worth of domestic work reckoned to be 35 hours less than the actual figure of 50 hours.

These figures were obtained by asking mum or dad what they thought the other one did. So the survey found a massive difference in the perception of what one parent thinks the other does compared to what they really do!

Mum’s do an average of £249 per week of childcare.

Value of a GRANDPARENT

In addition, over a quarter (27%) of households rely on grandparents for extra unpaid work.

For single parents this figure increased to 36%. Parents with younger children also relied more on grandparents with 34% obtaining regular assistance. On average, across the nation, grandparents are providing 7 hours of time a week to help out. If these parents were to pay for a childminder instead, the average cost would be £60 per week, or £3,120 a year.

Time

In terms of time to themselves, mum’s are averaging 6.5 hours a week. Quality time spent with partner averages just 3 hours per week.

From the L&G survey 49% of parents said they’d rather spend time with children than work. For parents with children between the ages of 0 & 5 this figure was almost 60%

The £30,000 figure was calculated using the hours of a non-working parent. Interestingly the value of household chores completed by a full-time working parent still came out at around £20,000!

Since the financial crisis [we can call it a recession even if the powers that be won’t!] in 2009 68% of parents said they had cut back on spending. In households earning over £70,000 this reduction was lower, but still there, at 51%

Full disclosure: Why the Green Financial interest in this?

As a financial adviser, I have seen claims pay out on insurance products to a family when a parent ‘is no longer there’, be it illness or disability that means household chores can’t be completed or in the worst case, the unfortunate and untimely death of a parent.

Most parents in the survey (57%) stated they didn’t know what state benefits would be available if their partner were to die. Over three quarters (77%) of parents think that if a partner was unable to work due to disability the government should be responsible for helping financially. That probably means a lot of disappointed, not to say hard up, people when they discover the actual level of state benefits payable.

Only half (53%) of families surveyed had any life insurance. For illness protection the number was nearer a quarter

In all cases, be it life insurance, health insurance or critical illness cover, mums had less protection than dads. And since the last survey in 2009, due to the financial crisis, the total cover in place has fallen across families. The upshot of this being that the global financial crisis may well be stretching further and causing a family financial crisis for those that suffer the illness or death of a parent and do not have any or sufficient cover.

In a similar fashion, only 34% of parents surveyed had a Will. The likelihood of having a Will does increase with age and more dads (40%) than mums (30%) had a will.

If you wish to read more on protecting your family or making a Will there is a free 28 page guide here: http://www.iangreen.com/downloads/protection.pdf
Life Insurance help is on page 4 and Wills on page 18. Do seek professional advice if you think your circumstances may require it.

And remember this Sunday, even if you don’t have the full £30,032 to give the mum in your life, a simple heartfelt thank you is also priceless.