Ask Money

Ask Money: what counts as income?

October 16, 2019

There have been many questions and answers in recent months regarding gifts in relation to IHT planning. While it is easy to understand the tax rates & reliefs/inheritance tax table printed in Money Observer, could I ask for clarification as to what constitutes ‘income’.

We receive a monthly return from an estate planning bond, and while speaking of this loosely as ‘income’, I would like to know if this income is allowable for the ‘gifts out of income’ option within the HMRC estate planning rules?

Ask Money: where do I stand on paying savings into a pension?

October 2, 2019

I retired a few years ago and immediately started drawing a defined benefit pension. My only forms of income now are the pension, company dividends and savings interest. When I came to fill out my tax return using the HMRC website, I wondered if it might be advantageous to invest my savings into a new pension. 

Playing with the tax return form, it showed I could reduce my tax liability. However, it seems you can only use “relevant earnings” to be able to get tax relief. Pension payments, dividends and savings are not relevant earnings. I’m not getting any other monies.

Ask Money: How can I remedy my pension income headache?

September 19, 2019

Two articles on the lifetime allowance (LTA) in your excellent July issue impelled me to undertake research into what gross and net pay I can expect when I fully retire at the age of 60 in three years’ time. While there is a wealth of research available, I have come away more confused than I was before.

Ask Money: how many Isa millionaires are active?

September 16, 2019

The article on Isa millionaires states that the average number of trades a year is 46, which sounds like a very active trading approach rather than a ‘buy and hold’ one. I would be interested to know how many of those trades are in fact just reinvestments of dividends in more shares, which is the way many ‘buy and hold’ investors build up their wealth. 
Alistair Elliott, by email

Ask Money: where do I pay tax on dividends?

September 12, 2019

I am resident in Scotland, so I’m subject to Scottish tax rates. I have a state pension, an armed forces pension and dividend income. Can you please advise me whether, as a taxpayer in Scotland, I must pay Scottish rates on my total income or – as a friend suggested – Scottish rates on my pension income and English rates on my dividends?
Garry Barnett, by email

Ask Money: how can I transfer a property portfolio?

September 2, 2019

Is it possible to transfer a commercial property portfolio from a partnership into a limited company and then transfer the shares to our children, thereby avoiding inheritance tax – assuming I survive for seven years? I would welcome any suggestions on how best to transfer a property portfolio to children.
Manu Patel, by email

Ask Money: where can I find out more about a Vanguard challenger?

August 27, 2019

You mention BlackRock/iShares MyMap in a recent article. Although MyMap was announced in March, I haven’t found a platform that offers this investment. There is very little information available about MyMap – neither BlackRock nor Morningstar has information about its sectors, geography, yield and so on.

Are you going to cover MyMap in a future issue? It does seem to be a Vanguard challenger, although it has a different approach to risk.
Jeremy Burgum, by email

Ask Money: where do I stand on pension contribution limits?

August 9, 2019

Reaching age 55 was a rude awakening in terms of pension planning and provision. Since then I have been able to pay the maximum £40,000 annually into my self-invested personal pension and to use carryover from previous years. My plan is to pay in the maximum £40,000 during the first six months of the next financial year and then take early retirement in October 2020. I can access a small number of final salary schemes for both taxable and tax-free income, leaving the Sipp invested for a few years before taking it.

Ask Money: can we use our wives’ CGT allowances?

July 29, 2019

My brother and I own equal shares in a house valued at £120,000 that we need to sell soon. The original cost was approximately £60,000. It is registered in our two names only. For capital gains purposes, are we able to use each of our wives’ £12,000 allowance as well as our own to minimise the impact of capital gains tax, or would we have to register our wives as co-owners to be able to do this?
Allan Johnston, by email