February 2022 Newsletter | Cylchlythyr Misol Chwefror 2022
A recent parliamentary report highlighted once again poor administration of state pensions. Google “Check your National Insurance Record”. The Gov.UK website will provide details of your contributions. If there are gaps in your record, contact the National Insurance office and you may secure a higher pension. If you have already started your pension, you may be able to claim a backdated pension payment.
Welsh language helpline - 0800 731 0453
English language helpline - 0800 731 0175
For those fortunate enough to have an income between £100,000 - £125,000, your marginal rate of tax is 60% due to the withdrawal of the personal allowance. You can save a significant level of tax by increasing your pension contributions. If you are in this position, please contact us as we can complete a tailored assessment of potential tax savings.
A summary of various scam alerts we have received this month:
- Individuals paying money “upfront” to buy a new car such as a Tesla to a “motor dealer” and losing their money.
- Letters received from a “Chinese Bank” stating that the individual had been traced as the sole surviving relative of a similar named person who died abroad in an accident, requesting your financial details and an “Administration fee”.
- Texts requesting payment of tax / delivery charges from the Post Office or delivery companies / fake police / fake bank requests to transfer money out of accounts.
- Be extremely wary of investments offering a return of say 8%-12% – these companies often end up in liquidation and you could lose some or all of the money invested. “If it looks too good to be true, it probably is”.
Ask Huw & Aled: I have read online that many celebrities have reduced their inheritance tax (IHT) exposure by using various tax planning strategies. Can you tell me a little about the different options available? (Last month we discussed “Deeds of Variation”)
This month we examine certain investments that can reduce your Inheritance Tax (IHT) liability if eligible criteria are met:
- Money invested in a portfolio of “AIM shares" becomes exempt from IHT if the shares are held for at least 2 years (The Jim Slater loophole named after a successful investor and businessman). There is risk involved as share prices can rise and fall.
- If funds are held in a drawdown pension and an individual dies before the age of 75, the fund is exempt from IHT.
- Business property relief and agricultural relief are also available to some individuals, depending on their circumstances.
