Case study: getting benefit crystallisation events in order

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MON, 12 JUL 2021

Each benefit crystallisation event (BCE), normally uses up a portion of an individual’s lifetime allowance (LTA). Where individuals with uncrystallised rights held under multiple registered pension schemes don’t have enough LTA to cover these rights, they may find themselves faced with a choice as to the order in which the benefits are taken. The question …

The break-down of CGT on divorce and separation

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MON, 05 JUL 2021

The Office of Tax Simplification (OTS) issued a second report on the 20 May 2021, titled ‘Capital Gains Tax Review; Simplifying practical, technical and administration issues’, in which they take the view that the current treatment of capital gains on separation and divorce is totally unsatisfactory and needs to change. In his blog, Neil MacGillivray, …

Retirement: New NMPA, a Trojan Horse?

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MON, 10 MAY 2021

The Treasury consultation on the implementation of the increase in the normal minimum pension age (NMPA) closed for comments on 22 April. We now wait, with somewhat bated breath, to learn what form the legislation will take in respect of the increase from 55 to 57 as of 6 April 2028. Rumblings have surfaced about …

Tax Planning: Cutting through the complexity of additional permitted subscriptions

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TUE, 27 APR 2021

Most will be familiar with the tax planning opportunity that arises when one spouse or civil partner dies, and the surviving partner (the survivor) can make an additional permitted individual savings account (ISA) subscription. That said, it’s clear from many of the enquiries I receive, particularly where there has been significant stock market movement up …

Dealing with a lifetime allowance charge on death

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MON, 12 APR 2021

In a previous article I looked at the situation where individuals exceed their lifetime allowance (LTA) during their lifetime, and how the resultant LTA charge is calculated and accounted for. However, if a LTA charge is generated on the death of an individual, it’s dealt with in a different way. A test against an individual’s …

Supporting Vulnerable Clients

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MON, 15 FEB 2021

The 2020 Financial Lives Survey indicated that 46% of UK adults could be considered vulnerable, and even more so since the pandemic took hold in March last year. Vulnerability is consequently a key area of focus for the FCA and they’re understandably insistent that advisers treat their clients right. So is your business prepared? In …

Pension Freedoms nearly 6 years on: advisers’ jobs more important than ever

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FRI, 12 FEB 2021

From the outset SIPPs were considered as a means of making it easier for people to manage their own pension arrangements. But their true potential in wealth management arguably took a further 26 years to develop, through the introduction of pension freedoms in 2015. Many feared that it would quickly go downhill from there, with …

Quantifying the impact of a lifetime allowance charge

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MON, 21 DEC 2020

Every individual has a lifetime allowance (LTA) which sets the total capital value of pension savings that they can draw as tax privileged benefits. There’s no limit to the amount of pension savings an individual can have. However, tax privileges are recouped through the LTA charge where the LTA is exceeded. In this technical article …

Business owners beware of potential CGT changes

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FRI, 18 DEC 2020

The recommendations that the Office of Tax Simplification (OTS) put forward in its review of capital gains tax (CGT), published on 11 November, has created quite a stir, and rightfully so. Neil MacGillivray warns that if the key proposals are adopted, then current CGT planning opportunities may be lost, particularly for owner managed businesses. The …

Covid-19 vs Tax

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WED, 16 DEC 2020

“The level of spending is unprecedented in ANY peace-time period in this country. In October, the Institute of Fiscal Studies forecast that government borrowing was set to climb to £350 billion this tax year. That’s 17 percent of GDP. Now, in normal times, borrowing is about 2% of GDP. So, we’re looking at more than …