It's ISA time again, but are they worth it?
In the space of two days (5/6 April) a couple can invest over £70,000 and have all the income and growth on the investment tax free with nothing to declare to the Revenue, by investing in an ISA. (Individual Savings Account)
There are two main types of ISA, Equity (Shares and Unit Trusts) and Cash. It is now possible to transfer (and the key word is transfer!) between the two.
With recent Tax Changes a question mark hangs over ISA accounts as it is possible to have £1,000 of interest a year tax free (£500 for high rate tax-payers) and £5,000 of dividends with no tax deducted, (that’s up to £2,000 of interest for a couple and £10,000 of dividends!) so why invest in an ISA?
In a word “Simplicity.”
Interest on bank, building society accounts and dividends not held in an ISA must be declared to the Revenue and could push you into higher rates of tax. If you invest in Shares or Unit Trusts outside of an ISA you could also be liable for Capital Gains Tax. (CGT)
Although you are each allowed £11,100 a year capital gain tax free, you must use the allowance every year or it is simply lost. This means buying and selling shares or Units for tax reasons, incurring costs and complications.
ISA accounts enable you to declare nothing; sell what you want when you want with no tax calculations to do and no danger of pushing you into higher rate tax brackets. Your accumulated ISA allowances are also transferrable between spouses on death maintaining the tax free status of the funds and income.
With the new pension rules, we are now using ISA accounts to provide tax free income to clients rather than run down their Inheritance Tax free pension funds.
Tax rules can change so use the allowances while they exist. See your IFA to ensure you use your full allowances and to arrange a transfer from Cash to an Equity ISA if it’s right for you. Contact Steve or Georgina on 01277 630873 .
Understanding for those with dementia
There are 850,000 people in the UK suffering from
dementia. Any reader who has been
diagnosed with dementia or has experienced it within their family, will know
that is a life changing and challenging condition.
Amanda Smallcombe, a solicitor at Birkett Long LLP, knows this from personal experience as her mother was diagnosed with dementia two years ago. Amanda heads the Court of Protection and Inheritance Disputes team at Birkett Long, which helps families of loved ones with dementia navigate the often complicated and confusing area of Deputyships and Court of Protection applications.
Those who have made a lasting power of attorney (LPA) will have already made a choice about who can look after their affairs and make decisions for them but if a loved one no longer has the capacity to make decisions, and they do not have an LPA in place, then someone has to apply to the Court of Protection to become their deputy.
There are two main types of application for a deputy, one for someone’s property and financial affairs and one for their personal welfare.
The order made by the court will set out what the deputy can do but, in general terms, a deputy for financial affairs can take care of paying bills, collecting pensions, making small gifts and operating bank accounts. The order may allow them to sell and purchaser property.
A deputy for personal welfare is allowed to make decisions in relation to care and health needs. However, it is rare for the court to agree to appoint a personal welfare deputy, and in the absence of a deputy, the local authority has a duty to ensure your loved one’s needs are met and will make decisions for them; it may not be your family. The process of applying to the court to appoint a deputy can take around three to six months, although in certain urgent circumstances a fast track application can be made.
If you would like professional and compassionate help with arranging the affairs of a relative who has dementia, or advice on any aspect of inheritance disputes, contact Amanda on 01206 217395 or email@example.com
Birkett Long LLP is authorised and regulated by the Financial Conduct Authority (No: 654458)