Dear Client
Welcome to Issue 16 of our Tailored Asset Management bulletin. In this issue we highlight a limited offer three year investment offering a fixed annual interest payment of 4.25%, available as a direct investment, Cash ISA and for pension fund monies; we draw attention to the changes in Stamp Duty Reserve Tax which will affect clients who transfer investments into their ISAs; and we offer tax saving advice for students.
We would also like to announce a change to our process for issuing client review documentation. We hope that there is something of interest for all.
 NDF Administration in association with Ulster Bank, a wholly owned subsidiary of Royal Bank of Scotland, has launched the Royal Deposit Plan, which may be of interest to some of our clients. The key terms of the plan are:
- Three year investment
- A fixed annual 4.25% gross interest payment for the three year term
- A return of 100% of the capital invested provided the plan is held until maturity
- Your money will be deposited with Ulster Bank Limited a wholly owned subsidiary of Royal Bank of Scotland plc
- Available as a direct investment with interest paid net of tax
(currently 20%)*
- Available as a Cash ISA with interest paid free of any liability to tax under current legislation
- Available for SIPP and SSAS investments, again with interest currently paid free of tax
- Offer closes on 19th October 2009 unless fully subscribed when it may close earlier
This may be suitable for clients who are happy to tie up a proportion of capital for the three year period – it is not suitable for money where access may be needed within that time – and are concerned that interest rates and returns from other investments may remain relatively low during the investment term.
In the event that Ulster Bank Limited were to fail within the term, you may lose all or part of your initial investment, however Ulster Bank is a participant of the Financial Services Compensation Scheme (FSCS) which provides protection to depositors.
You can access the Key Facts brochure for this investment by visiting the web address
http://www.charter-partnership.co.uk/pdf_docs/Royal DEPOSIT Plan Brochure.pdf.
This bulletin does not constitute a recommendation. If you are interested, please email us and we will be happy to provide you with further advice.
* Basic rate tax payers would have no further liability. Higher rate tax payers would have to account for tax, currently a further 20%. The levels and bases of taxation could change at any time.
HMRC has recently issued guidance clarifying some points of detail with regard to Stamp Duty Reserve Tax (SDRT). This means that, with effect from no later than 22nd September, SDRT will have to be levied on certain investment transactions that do not involve the physical sale or purchase of funds such as unit trusts.
Amongst others, this will apply to transfers of assets on platforms such as Transact, most importantly transfers of assets made to maximise ISA allowances or transfers of assets by reregistration onto the platform.
The effect of this change will be that Transact, along with other platforms providing a similar service, will have to charge 1.0% of the value of the transfer as a tax and pass this on to HM Revenue and Customs (HMRC).
Transfers across from General Investment Accounts (GIAs) to ISAs will no longer be free of cost. Although there will still be no charges levied by ourselves or Transact, nor will there be any dealing costs as investments are not sold and repurchased, HMRC will now take their 1% cut! And speaking of ISAs...
Introduced in 1999, the Individual Savings Account (ISA) has become the primary savings vehicle with more than 17 million people – about one in every three adults – now owning one.
This tax year you are able to invest up to £7,200 into an ISA, up to £3,600 of which can be in cash. If you are over 50, then from October this can be increased further to £10,200, of which £5,100 can be in cash. From April 6th 2010, these higher limits apply to everyone.
Once invested, you have no further liability for income or capital gains tax on any profits that you receive – indeed, you do not have to tell the taxman that you have it.
We will be in contact with those of you who are over 50 and who regularly transfer funds held on the Transact platform into your ISAs. If you are unsure whether this applies to you or you have not made use of your full ISA allowance this year, please email us. Unfortunately any transfer of investments, rather than cash, made to utilise the additional allowance available from October will be caught by the 1% SDRT detailed above.
Full time students pay income tax just like everybody else but research from HMRC reveals that more than half of the UK’s 2.3 million university students don’t realise this. Many of those who have paid tax will be entitled to get it back if they have earned less than the £6,475 Personal Allowance during this year.
 Students can find all the information they need at www.direct.gov.uk/studenttaxadvice.
Any students who think they may have paid too much tax can use the student tax calculator on the HMRC website (http://www.hmrc.gov.uk/calcs/stc.htm) to find out if they are due a cash refund and HMRC plans to launch a tax fact Facebook application complete with a refund calculator.
Three out of every four students take paid work, and if they have worked over the summer vacation or intend to get part-time work during term-time, HMRC wants to help them to get the facts about tax right so that they don’t pay more tax than absolutely necessary on their hard-earned cash.
We are aware that there can be a huge paper chain in the financial services industry and that many of our clients would prefer to receive correspondence by email where possible. We are also conscious that this does not appeal to all our clients. Where clients have provided us with an email address, we intend to start issuing our annual Review Statements and Valuations by email. This will not, at first apply to everyone, but the intention will be to roll this out gradually. Those clients who have not provided us with an email address will continue to receive statements by post. If you would like to specify an email address, other than the one to which this Bulletin has been sent, please email us.
Finally, we have prepared a very brief client satisfaction survey – five questions only - which will help us to improve the services that we offer to you. If you would be willing to help us, please visit the web address - http://www.charter-partnership.co.uk/pdf_docs/Client_feedback_questionnaire_0909.doc.
We hope that you have enjoyed the summer, whether taking holidays abroad or staying at home. Although there is still some way to go before confidence among investors returns to the levels of 2007, there are indications that money is once again finding its way into the markets. As we move into the autumn, and summer holidays become a happy memory, we hope that things will continue to look gradually brighter. |
