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Read moreMonday Musings 05/06/2023
05/06/2023
Its not often I get to ask a client something that will leave them truly stumped. But I managed it last week and if I’m honest I kind of enjoyed myself. The client in question was a young (by my standards) man who plans to invest in property rather than a pension. Even though he already has a pension that he could increase his contributions to.
Why was he talking to me? Well, I was speaking to him in my capacity as a Will writer. He wanted me to write him a Will that would ensure that he would pass his assets efficiently for inheritance tax purposes. Sounds like a good idea, right?
Here’s the thing. If you do have an inheritance tax (IHT) problem, leaving it till you’ve passed away to sort it is a bit too late. It’s a bit like worrying about the temperature of the pool after you’ve jumped off the diving board. I can write Wills with Trusts that can stop your assets contributing to your children’s estate and their IHT problem, but that’s a long and complicated musings for another Monday…
You’re far better off IHT planning wise to leave your assets in good order during your lifetime.
And here’s the other thing. Its very hard to manage an IHT situation if your assets are tied up in property. I know we have a number of clients who will be nodding their heads at this point.
But assets held in your pension, for example, pass free of IHT. The receiver of your pension might get taxed at their income tax rate, but not inheritance tax.
The question I asked him was ‘Why do you want to invest in property?’ No one had ever asked him before, and he’d certainly not asked himself. He’d simply always had a firm idea that property was the way to go. And maybe it is. Rental income from a tangible bricks and mortar asset that doesn’t often loose value (but it does happen and when it happens it’s totally out of your control) is an attractive proposition. But there are drawbacks and you should go into investment in property with as much thought as with any other investment. Remember property is not very liquid as an investment. Selling a property takes time, properties must be maintained to preserve their value, properties need insuring, properties need quality tenants, and you can’t sell a ‘chunk’ of property if you need to release a small part of your investment (pension 25% tax free cash, anyone?)
I’m not slating property (see what I did there?) but do consider all your options before investing, just as you would with anything else, and let us help you make sure you’ve considered all the angles before you take the plunge.
So, to the markets:
30.12.2022 | 06.05.2023 | % Change | % Change on week | |
FTSE 100 | 7451 | 7612 | Up 2.16 | Up 0.17 |
Dow Jones | 33147 | 33575 | Up 1.29 | Up 0.04 |
Nasdaq | 10466 | 13234 | Up 26.44 | Up 0.03 |
S&P | 3839 | 4278 | Up 11.43 | Up 0.11 |
NIKKEI | 26094 | 32506 | Up 24.57 | Up 0.90 |
Hang Seng | 19781 | 19099 | Down 3.44 | Down 0.05 |
Shanghai | 3089 | 3195 | Up 3.43 | Down 1.15 |
CAC 40 | 6473 | 7205 | Up 11.30 | Up 0.06 |
DAX | 13923 | 15986 | Up 14.81 | Up 0.14 |
I had a strange encounter on Facebook this week (sounds silly, bear with me…). A new mum put a post up on a local group asking for help. She said.
Read moreAs I’m sure is the case for you, I’ve been watching the coverage of the Israel – Hamas war with horror. The loss of innocent civilian lives, the impact of.
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