Welcome to our first bulletin of
2006, our 25th year and one which promises to be as busy
and exciting as ever. If you have any comments
or financial items that you would like us to cover
please email us on TAM@charter-partnership.co.uk
The early months of each year are concentrated towards 5th
April, the end of the financial year and the planning opportunities
that this offers. The end of the ISA
season is always a busy time and you may wish to
take the opportunity to invest up to your maximum for 2005/6
if you haven’t already done so. This amounts to £7,000
(£14,000 per couple) into long term savings free of
any capital gains tax and of personal income tax (there is
no requirement to declare the income received on your self
assessment tax return). If you would like us to contact you
regarding ISA investment, please
click here to respond.
This year we have to concentrate our thoughts on pensions.
The current regime is to be simplified into one on 6 th April
2006 (referred to as “A Day”) and for more detail
please click here to be taken to our full Pensions
Simplification Bulletin. After April there will be opportunities for many
to contribute more to pensions, take higher tax free cash
sums including 25% from pension funds which currently offer
no cash and have more flexibility when it comes to taking
benefits.
You should consider action before April if:
- you have funds above or likely to be above £1.5
million, the new Lifetime Allowance for 2006/7. This
will increase each year but any funds in excess of
the lifetime allowance will be taxed. You can elect
to have these protected at A Day.
- you are thinking of taking benefits before
6 th April. You may be better deferring
in order to benefit from the different options available
and take tax free cash from plans such as protected
rights or Free Standing AVCs which currently do not
allow for cash.
- you are currently in a company scheme, typically
and Executive Pension and are entitled to more than
25% of the fund as tax free cash. This
is protected at A Day, but the protection is lost if
you then transfer your benefits elsewhere, except under
certain restricted conditions. It is therefore vital
that you are in the most appropriate scheme now. On
our advice many clients are now seeing the benefits
of having pension arrangements managed under the Tailored
Asset Management system using the Transact
platform.
If you haven’t already done so now may be the
time to act. Please contact us.
- you wish to maximise contributions
before A Day. Current
rules, particularly for Executive Pensions, may allow your
company to invest more now than after A Day, with full tax
relief. Please contact us if you would like to know more.
We have already contacted clients where the forthcoming
changes are particularly relevant but if you are unsure whether
or not you need further advice or would like more information,
please respond here.
