Ask Money

Ask Money: will my idea for passing on a buy-to-let flat work?

June 17, 2019

I have a buy-to-let flat that will trigger a big capital gains tax bill if I sell it. Can I pass ownership in tranches to my daughter (10% a year) so that the gain on each tranche is within the CGT annual exemption. If I live for seven years after the final transfer, I assume there would also be no IHT to pay. The flat has no mortgage. The only downside I see is the legal fees for each transfer.
Eddie Montreaux, Brighton

Ask Money: how do I resolve my pension quandary?

May 31, 2019

I recently took up a job where I have become a member of the Local Government Pension Scheme. I’m trying to work out if it would be beneficial for me to transfer into the scheme two private pensions I hold, which have transfer values of £95,435 (Aegon) and £13,514 (Aviva).

Regarding the latter, I’ve been told by the LGPS that this amount “would enable [me] to count an amount of CARE pension of £1,117 per annum”. I’m awaiting a quote for the former. My normal pension age is 67 (I’m approaching 50), at which point the above would be payable.

Ask Money: who pays CGT on a designated account?

May 15, 2019

When our child was born, we set up a designated investment through Witan. Now he is approaching 18, we will shortly be transferring this investment across to him. Could you advise whether my partner or I need to declare anything on our tax returns when this is transferred, or will it all fall into his allowance for CGT?
David Griffiths, by email

Ask Money: estate planning or tax evasion?

May 13, 2019

My wife and I jointly own assets well over the inheritance threshold and wish to gift some of these to our children. Could we transfer these assets into my wife’s name, she being younger and in better health than me, and more likely to survive for seven years – or would HMRC view this as tax avoidance or evasion?
Raymond Dent, by email

Lindsell Train Investment Trust is on an 85% premium: why are investors buying?

Can you explain how Lindsell Train Investment Trust (LTI) can trade at a premium of 75% above net asset value (quoted on interactive investor’s website in mid-April)? Does this effectively mean investors believe the fundamental investments this trust has already made will be worth 75% more, within a reasonable timescale? Why would, or should, anyone pay such a premium?

Ask Money: can I use my investments as collateral?

May 7, 2019

I have £200,000 in different investment funds held with interactive investor. I am self-employed, so my income over the past 10 years has been in peaks and troughs. I would like to buy my first house. Is it possible to take out a mortgage using my investments as collateral, without having to cash them in? If not, could you recommend the best way for someone who is self-employed to get a mortgage?
Russell Cross, by email

Ask Money: how is pension tax relief calculated?

April 15, 2019

Is the tax relief on pension contributions based on earned income (salary/bonus), or is it based on total income including that from dividend and rental income? I end up paying higher-rate tax when rental income is included.
Satish Shah, by email

Ask Money: smitten by the Sleuth

April 8, 2019

I invest in funds and investment trusts and avoid shares. This reflects my lack of equity knowledge. But I look with envy at Share Sleuth’s results in Money Observer and wonder how to ‘buy the portfolio’ or parts of it. Is this something you would recommend?
Roland Waterhouse, by email

Ask Money: should I feather my NEST?

February 26, 2019

I am thinking of opening a pension fund, and I see the government has set up the National Employment Savings Trust (Nest) scheme. It looks quite good and it’s open to the self-employed, which is what I need. Could you tell me what the drawbacks of the Nest scheme are, compared with other traditional pension funds? For example, I see it doesn’t offer drawdown or the option of an in-house annuity.
Steven Little, by email

Ask Money: accumulation or income shares?

January 19, 2019

I have been checking my portfolio ready for the new year. I am 65 and currently reinvesting all my dividends. My largest holding is in Artemis Global Income shares. I wonder whether I would benefit by changing this holding from accumulation into income shares, as by doing so I would be purchasing extra shares twice a year instead of just adding dividends onto the current share price. Could you please advise me whether this would be prudent?
Stephen London, by email