Thursday, March 31, 2011
QROPS: More compelling reasons to look at QROPS
QROPS: More compelling reasons to look at QROPS: "There are an estimated 5.5 million British expatriates around the globe, which equates to roughly one tenth of the British population. ..."
Tuesday, March 29, 2011
2011 UK Budget
Friends Provident have provided us with a summary of the salient points relating to our clients.
Pensions
The Government announced last year that it would consult with employers and the pensions industry with a view to reducing the 2010/11 annual allowance of £255,000. Today’s budget confirmed the annual allowance from 6 April 2011 will be £50,000
The Lifetime allowance will be reduced to £1,500,000 from April 2012.
The effective requirement to annuitise by age 75 is removed from April 2011.
Disguised remuneration – anti avoidance measures
New legislation effective from 6 April 2011 will introduce an income tax charge on members of third party arrangements designed to avoid, reduce or defer tax in respect of employee remuneration. The charge to income tax will be payable on the contribution amount being paid to the arrangement or if the reward is by way of an earmarked asset allocation, on the higher of the cost or market value. The new rules will particularly affect individuals in the UK who are or would have considered membership of an Employer Financed Retirement Benefits Scheme (EFRBS).
EFRBS have previously been attractive to high earners affected by the restrictions on pension tax relief enabling them to make retirement provision in a tax effective manner. Whilst no relief was available on contributions being paid into an EFRBS, tax was deferred until benefits were taken.
These new rules make offshore bonds an excellent alternative for funding future retirement provision for high earners. Tax is deferred until benefits are drawn and unlike the third party arrangements, is only payable on any chargeable gain as opposed to the whole of the proceeds. The bond is portable, enabling the investor to move around the world without having to change the arrangement.
IHT
The IHT nil rate band will remain frozen at £325,000 until 2014/15. There are no changes to the 40% IHT rate for the 2011/12 tax year. However from April 2012, a reduced rate of IHT of 36% will be introduced where 10 per cent or more of a deceased’s net estate is left to charity. The new rate will apply where death occurs on or after 6 April 2012. The Government will be consulting on the detailed implementation of this measure and will issue a consultation document before the summer.
Review of Non-Domicile Taxation
Following on from an announcement in the June Budget 2010, of its intention to review the tax treatment of non-UK domiciled individuals resident in the UK, the Government has announced the following proposed tax changes:
• Increase the existing £30,000 annual charge to £50,000 for non-domiciles who have been UK resident for 12 or more years and who wish to continue to benefit from the remittance basis of taxation. The £30,000 charge will be retained for those who have been resident for at least seven of the past nine years and fewer than 12 years.
• Remove the tax charge when non-domiciles remit foreign income or capital gains to the UK for the purpose of commercial investment in UK businesses.
• Simplify some aspects of the current tax rules for non-domiciles to remove undue administrative burdens.
A consultation document on the detailed proposals will be issued in June, with a view to implementation from April 2012. The Government has also announced that there will be no other substantive changes to these rules for the remainder of this Parliament.
Statutory Residence Test
The current rules that determine tax residence for individuals are unclear and complicated, and practitioners have long called for the introduction of a statutory residence test. The Government intends to issue a consultation document in June with a view to implementation from April 2012.
OTS review of reliefs and Government response
The Government has listed a selection of reliefs, identified by the Office of Tax Simplification, which it intends to abolish. In respect of insurance policies, 2 reliefs will be abolished with effect from April 2012 - life assurance premium relief and relief for life assurance premiums paid by employers under EFRBS.
Entrepreneurs’ relief
Budget 2011 announced that the entrepreneurs’ relief lifetime limit of gains will increase from £5 million to £10 million from 6 April 2011.
Enterprise Investment Scheme and Venture Capital Trusts
The rate of income tax relief given under EIS will be increased from 20 per cent to 30 per cent from 6 April 2011, subject to EU State Aid approval.
From April 2012, subject to EU State Aid approval, legislation will be introduced in Finance Bill 2012 to increase:
• the employee limit to fewer than 250 employees;
• the size threshold to gross assets of no more than £15 million before investment;
• the maximum annual amount that can be invested in an individual company to £10 million;
• the annual amount that an individual can invest under the EIS to £1million.
NIC
The Government has announced that it will consult on the integration of income tax and National Insurance contributions (NICs). The aim is to remove distortions created by the tax system, reduce burdens on business and improve fairness for individuals. The consultation document is due to be published later this year. The Chancellor stated that the integration wouldn’t extend NICs to individuals above State Pension age or to other forms of income such as pensions, savings and dividends.
From 2012 -13 the Consumer Prices Index (CPI) is to replace the Retail Prices Index (RPI) as the default indexation for all National Insurance contributions rates, limits and thresholds:
Junior ISAs
The Government will introduce a new Junior ISA product which will be available for UK resident children who do not have a CTF account. Junior ISAs will be tax-relieved and will have many features in common with existing ISA products. They will be available as a cash or stocks and shares product. It is expected that Junior ISAs will be available from autumn 2011
Corporation Tax
In addition to the reductions announced in the June Budget, the main rate of corporation tax will be reduced by a further 1%. This will take the main rate from 28% to 26% in April 2011. This rate will be reduced further over the next 3 years. The small profits rate from April 2011 will be 20%, as announced in June.
Tackling Tax Avoidance
A progress report has been published today outlining the Government’s strategy on countering tax avoidance, including:
• Identifying new generic defences against avoidance, including considering the case for a General Anti-Avoidance Rule (GAAR). A study Group on the GAAR will report in October 2011
• A programme for reviewing areas of the tax system that have repeatedly been subject to avoidance attack. Initially 2 areas have been identified for review – income tax losses and unauthorised unit trusts
• A new proposal to reduce the cash flow benefits that taxpayers can gain from using high risk avoidance schemes
• Several targeted tax measures aimed at specific avoidance risk
The above information is based on the 2011 Budget released on 23 March 2011 and is not guaranteed to become law
Pensions
The Government announced last year that it would consult with employers and the pensions industry with a view to reducing the 2010/11 annual allowance of £255,000. Today’s budget confirmed the annual allowance from 6 April 2011 will be £50,000
The Lifetime allowance will be reduced to £1,500,000 from April 2012.
The effective requirement to annuitise by age 75 is removed from April 2011.
Disguised remuneration – anti avoidance measures
New legislation effective from 6 April 2011 will introduce an income tax charge on members of third party arrangements designed to avoid, reduce or defer tax in respect of employee remuneration. The charge to income tax will be payable on the contribution amount being paid to the arrangement or if the reward is by way of an earmarked asset allocation, on the higher of the cost or market value. The new rules will particularly affect individuals in the UK who are or would have considered membership of an Employer Financed Retirement Benefits Scheme (EFRBS).
EFRBS have previously been attractive to high earners affected by the restrictions on pension tax relief enabling them to make retirement provision in a tax effective manner. Whilst no relief was available on contributions being paid into an EFRBS, tax was deferred until benefits were taken.
These new rules make offshore bonds an excellent alternative for funding future retirement provision for high earners. Tax is deferred until benefits are drawn and unlike the third party arrangements, is only payable on any chargeable gain as opposed to the whole of the proceeds. The bond is portable, enabling the investor to move around the world without having to change the arrangement.
IHT
The IHT nil rate band will remain frozen at £325,000 until 2014/15. There are no changes to the 40% IHT rate for the 2011/12 tax year. However from April 2012, a reduced rate of IHT of 36% will be introduced where 10 per cent or more of a deceased’s net estate is left to charity. The new rate will apply where death occurs on or after 6 April 2012. The Government will be consulting on the detailed implementation of this measure and will issue a consultation document before the summer.
Review of Non-Domicile Taxation
Following on from an announcement in the June Budget 2010, of its intention to review the tax treatment of non-UK domiciled individuals resident in the UK, the Government has announced the following proposed tax changes:
• Increase the existing £30,000 annual charge to £50,000 for non-domiciles who have been UK resident for 12 or more years and who wish to continue to benefit from the remittance basis of taxation. The £30,000 charge will be retained for those who have been resident for at least seven of the past nine years and fewer than 12 years.
• Remove the tax charge when non-domiciles remit foreign income or capital gains to the UK for the purpose of commercial investment in UK businesses.
• Simplify some aspects of the current tax rules for non-domiciles to remove undue administrative burdens.
A consultation document on the detailed proposals will be issued in June, with a view to implementation from April 2012. The Government has also announced that there will be no other substantive changes to these rules for the remainder of this Parliament.
Statutory Residence Test
The current rules that determine tax residence for individuals are unclear and complicated, and practitioners have long called for the introduction of a statutory residence test. The Government intends to issue a consultation document in June with a view to implementation from April 2012.
OTS review of reliefs and Government response
The Government has listed a selection of reliefs, identified by the Office of Tax Simplification, which it intends to abolish. In respect of insurance policies, 2 reliefs will be abolished with effect from April 2012 - life assurance premium relief and relief for life assurance premiums paid by employers under EFRBS.
Entrepreneurs’ relief
Budget 2011 announced that the entrepreneurs’ relief lifetime limit of gains will increase from £5 million to £10 million from 6 April 2011.
Enterprise Investment Scheme and Venture Capital Trusts
The rate of income tax relief given under EIS will be increased from 20 per cent to 30 per cent from 6 April 2011, subject to EU State Aid approval.
From April 2012, subject to EU State Aid approval, legislation will be introduced in Finance Bill 2012 to increase:
• the employee limit to fewer than 250 employees;
• the size threshold to gross assets of no more than £15 million before investment;
• the maximum annual amount that can be invested in an individual company to £10 million;
• the annual amount that an individual can invest under the EIS to £1million.
NIC
The Government has announced that it will consult on the integration of income tax and National Insurance contributions (NICs). The aim is to remove distortions created by the tax system, reduce burdens on business and improve fairness for individuals. The consultation document is due to be published later this year. The Chancellor stated that the integration wouldn’t extend NICs to individuals above State Pension age or to other forms of income such as pensions, savings and dividends.
From 2012 -13 the Consumer Prices Index (CPI) is to replace the Retail Prices Index (RPI) as the default indexation for all National Insurance contributions rates, limits and thresholds:
Junior ISAs
The Government will introduce a new Junior ISA product which will be available for UK resident children who do not have a CTF account. Junior ISAs will be tax-relieved and will have many features in common with existing ISA products. They will be available as a cash or stocks and shares product. It is expected that Junior ISAs will be available from autumn 2011
Corporation Tax
In addition to the reductions announced in the June Budget, the main rate of corporation tax will be reduced by a further 1%. This will take the main rate from 28% to 26% in April 2011. This rate will be reduced further over the next 3 years. The small profits rate from April 2011 will be 20%, as announced in June.
Tackling Tax Avoidance
A progress report has been published today outlining the Government’s strategy on countering tax avoidance, including:
• Identifying new generic defences against avoidance, including considering the case for a General Anti-Avoidance Rule (GAAR). A study Group on the GAAR will report in October 2011
• A programme for reviewing areas of the tax system that have repeatedly been subject to avoidance attack. Initially 2 areas have been identified for review – income tax losses and unauthorised unit trusts
• A new proposal to reduce the cash flow benefits that taxpayers can gain from using high risk avoidance schemes
• Several targeted tax measures aimed at specific avoidance risk
The above information is based on the 2011 Budget released on 23 March 2011 and is not guaranteed to become law
Sunday, March 20, 2011
Friday, March 18, 2011
Wednesday, March 16, 2011
Japanese Disaster, effect on markets
Mark Paine, Managing Director of Meyado Private Wealth Management Singapore, comments on recent events in Japan.
Firstly we need to acknowledge the extent of the devastation and effect on human lives this terrible event has had, our hearts and thoughts go out to those affected by the disaster.
Since events started to emerge on Friday stock markets have been in steady decline. News in Europe has not been good either and this has compounded market falls in the region.
We have been advocating a more conservative balance in portfolios since Q4 of 2010, using gold and precious metals to underpin most portfolios, as well as utilising alternative asset classes to protect capital and enhance growth over and above low interest rates.
With smaller exposure to equities we are now waiting to see buying opportunities as the market has generally over-reacted and value creation could potentially be around the corner, although not just yet.
For clients creating capital by building up assets on a cost averaging basis, saving each month or quarter, the strategies of buying into volatile equities over time works well. We continue to see longer term value in established and emerging markets and will continue to drip feed in over time to achieve value.
As is always the case, everyone has individual circumstances and would be best advised to discuss with their financial adviser as to the best course of action for them individually, but in the main with proper portfolio construction it is more a case of looking for buy in opportunities rather than panic selling. To contact an adviser at Meyado contact us at singapore@meyado.com
Firstly we need to acknowledge the extent of the devastation and effect on human lives this terrible event has had, our hearts and thoughts go out to those affected by the disaster.
Since events started to emerge on Friday stock markets have been in steady decline. News in Europe has not been good either and this has compounded market falls in the region.
We have been advocating a more conservative balance in portfolios since Q4 of 2010, using gold and precious metals to underpin most portfolios, as well as utilising alternative asset classes to protect capital and enhance growth over and above low interest rates.
With smaller exposure to equities we are now waiting to see buying opportunities as the market has generally over-reacted and value creation could potentially be around the corner, although not just yet.
For clients creating capital by building up assets on a cost averaging basis, saving each month or quarter, the strategies of buying into volatile equities over time works well. We continue to see longer term value in established and emerging markets and will continue to drip feed in over time to achieve value.
As is always the case, everyone has individual circumstances and would be best advised to discuss with their financial adviser as to the best course of action for them individually, but in the main with proper portfolio construction it is more a case of looking for buy in opportunities rather than panic selling. To contact an adviser at Meyado contact us at singapore@meyado.com
Tuesday, March 15, 2011
Wednesday, March 9, 2011
Great Story from Sky News
A comic featuring the first ever appearance of Spiderman in a comic sells for $1.1 million
Here
That's a 38% per annum compounded retrun from the original 12 cents
Here
That's a 38% per annum compounded retrun from the original 12 cents
Sunday, March 6, 2011
Private Banking Asia 2011
16.00 Tuesday 15th March
IWM Panel: How are independent wealth managers capturing clients, assets and market share in Asia’s growing private wealth markets
•Overcoming the challenges in transitioning from a private bank to an independent wealth management firm
•Assessing how to effectively reduce operational and technology costs for cost-efficient servicing
•Examining how IWMs is taking advantage of the new competitive landscape by enhancing risk management capabilities
•How to extend full balance sheet management solutions to maximise client acquisition and retention
› Mr Maikel Sajangbati,President Director, PT. MaeSa Consulting Indonesia› Mr Urs Brutsch,Managing Partner & Founder, HP Wealth Management› Mr Mark Paine,Chief Executive Officer, Meyado Private Wealth Management› Mr Mahadevan Veeramony,Chief Executive Officer, Wealth Advisors (India) Pvt Ltd
Full link here
IWM Panel: How are independent wealth managers capturing clients, assets and market share in Asia’s growing private wealth markets
•Overcoming the challenges in transitioning from a private bank to an independent wealth management firm
•Assessing how to effectively reduce operational and technology costs for cost-efficient servicing
•Examining how IWMs is taking advantage of the new competitive landscape by enhancing risk management capabilities
•How to extend full balance sheet management solutions to maximise client acquisition and retention
› Mr Maikel Sajangbati,President Director, PT. MaeSa Consulting Indonesia› Mr Urs Brutsch,Managing Partner & Founder, HP Wealth Management› Mr Mark Paine,Chief Executive Officer, Meyado Private Wealth Management› Mr Mahadevan Veeramony,Chief Executive Officer, Wealth Advisors (India) Pvt Ltd
Full link here
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About Me
- Mark Paine
- I joined Meyado Private Wealth Management as an international financial adviser in 1993. I have lived and worked in the USA, Europe, the Middle East and currently reside in Singapore in South East Asia where I am Managing Director of Meyado Pte. I am a qualified Financial Representative in Singapore under the MAS Financial Advisers Act as well as holding UK FSA CFP and FPC examinations and a BSc in Business and Law from the University of Hertfordshire in the UK. You can contact me at markpaine@meyado.com
