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May 2010 Well here we are with a 'new style of government' where former opponents have come together to give us our first coalition for 65 years. The great 'New Labour' era has ended, for better or worse, and we now have a two-party government sharing cabinet positions and promising to put the country rather than party politics first. This will inevitably lead to compromises over manifesto pledges and these will almost definitely have an effect on the financial affairs of all of us. There is to be an emergency budget with a date announced of June 22nd. It is expected that when it is delivered that it will contain both tax rises and spending cuts. Under the Labour government, tax receipts were considerably lower than government spending on the whole. It is probably therefore no surprise that the fiscal situation coupled with the global banking crisis means there will be pain to come. This is also sure to result in unpopular decisions effecting many. I dont intend to speculate heavily here but it is entirely likely that we will see a rise in VAT from 17.5% to 20%, a rise of Capital Gains Tax, currently at 18% to around 40% (althought some commentators are talking it up to around 50%). It is also probable that the rise in the inheritance tax threshold announced by the Conservatives will not happen. Turning back to the CGT situation and the probable increase in the rate. It appears that as of yet no decision has been made on the annual exemption. The Liberal Democrats went into the election proposing a £2000 exemption, whereas the Conservatives favour the current £10,100 figure. A £2000 annual exemption would not only drag many more people into the CGT net, it would also drastically increase the number of taxpayers having to detail gains and losses in their tax returns. The current requirement is that if total disposals exceed four times the annual exemption, then detailed calculations of gains and losses must be included as part of a tax return, even if the overall net gains falls within the annual exemption. A £2000 exemption would mean an increase in the number of tax returns HMRC will have to process. We will be contacting all clients with further information in this regard and with ideas for appropriate planning. We do note that it is likely that the use of single premium bonds will become more common to shield clients.
IQ Company News What a year we are having in terms of recognition! We would never be so bold as to claim that we are doing everything right but we have won three major awards this year so our industry appears to believe that we should be recognised for our efforts on behalf of clients. This year Spears Wealth has placed me in their Top 50 UK Wealth Managers listings, Private Client Practitioner Magazine have recognised Investment Quorum as one of the UK's top 25 independent financial advice companies and we have also won a 'Creme de la Creme' award for our general business activities. We were all very interested to see that Richard Branson is a past recipient of this particular award. We are truly humbled!
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Another New Addition to the Team As we continue to grow we are extremely keen to ensure that our service does not slip. We have therefore appointed another member to the client liaison team. Emma Duffield who did a degree in Human Geography at University of Manchester has now joined after completing her degree and spending the winter in Val d' Isere. We will have some more news in June in this regard as we will have another team member to let you know about.
Pensions and Retirement Income The 50 per cent tax rate is now impacting on higher earners and will further contribute to the complexity surrounding pensions savings. We are proving to be very busy this year assisting clients overcome the increasing difficulties involved in providing sensibly for their financial security in retirement. So much for the 'pensions simplification' that we were promised by the previous government! As ever, if you have any questions just give your usual relationship manager a shout and we will be happy to help but we intend to get some more detailed commentary out on this after the budget once we see the lay of the land.
Discretionary Investment Management As mentioned in the last statement, there are major improvements on the way from our chosen custody and trading partner, 7IM, in terms of the functionality of the platform and I will be bringing you more news as it becomes available but much of the improvements will centre around the style and quality of reporting to clients. Our Chief Invesment Officer, Peter Lowman, has been appointed to the board and we are extremely proud that an individual of his calibre and experience will bring more depth to the management of your chosen wealth manager. We are extremely pleased with how the performance figures look on clients' portfolios and your individual relationship managers will be discussing this with you at your review meetings. As ever, any questions on this topic feel free to ask. I will close for now but as always I would take this opportunity to thank you all for your continued support. As much as we have worked hard here for our recent successes we are totally aware that it is our clients that make us what we are. The responsibility of assisting you with your financial affairs is something we will never take for granted. With regards.
Lee Robertson p.s. news to follow next month about an important Investment Quorum client event in September.
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