Delivering Professionalism with British Standards/ ISO22222

Yesterday, I undertook my third annual assessment for ISO22222 Personal Financial Planning. This is the British Standards for Personal Financial Planning and assessed by Standards International. I would like to thank Standards International for their support and guidance for yesterday and the past three years we have been working together. You have allowed our IFA business to grow.

The assessment went well and I look forward to the results in due course. So, why am I blogging about this? The reason is that, in my opinion, this is one of the most important qualifications that can be achieved in the financial advice industry. Sure, everyone can read an exam text book to understand the technical issues of pensions, investments, ISAs and annuities as examples, and having undertaken most of the financial advice exams available, I should know. The difference with the ISO22222 Personal Financial Planning assessment is that they look at the nitty gritty of what has actually been delivered, at the coal face if you like, to the clients you have seen and helped over the last year’s period. So the assessment is about what has been delivered, what the client receives, the structured format that they receive it, allowing full two way communication and not what you can remember from your text book studies.

The improvements that have been made to service over the last 3 years can be attributable in part to the processes that they recommend and implement to ensure that our clients, the most important individuals in any financial planning process, are served in an ethical, profession and timely fashion to make sure that their expectations are met and exceeded when planning their finances for their futures.

Thank you again to Alison, Michelle and the team at Standards International and I look forward to continuing the process in future years.

Keith Churchouse

Director of Churchouse Financial Planning Limited

Churchouse Financial Planning Limited is Authorised and Regulated by the Financial Services Authority.

Gifts out of Surplus Income and Saving Inheritance Tax (IHT)

Inheritance tax (IHT) is usually troubling to those that are affected by it. I know many who had hoped that the new administration in government would increase the current thresholds (£325,000 or £650,000 for a couple/ 2010) fixed by the last administration for a 5 year period.

The trouble with inheritance issues is that if you are thinking of gifting capital away, what will happen to you if your needs grow as you get older and need care as an example. Also, any significant gift of capital over £3,000 (the annual gift allowance) may well become subject to the 7 year survival requirements. You can still go back one year if you have not used the annual gift allowance and gift away £6,000 in total in the first year. It will be interesting to see if any of the above regulations change in the forthcoming budget on the 22^nd June 2010.

One allowance which is usually overlooked and can offer significant potential to provide inheritance savings is the gift out of surplus income rule. This is effectively a regulation that allows an individual to gift away surplus income without effecting their standard of living or using capital to subsidise their income after the gift is made. The HMRC website suggests that this is: ‘that after allowing for all gifts forming part of their normal expenditure the transferor must have been left with enough income to maintain their usual standard of living.’ Further details are available at their website, www.hmrc.gov.uk and add the further note that ‘The usual standard of living will generally be the standard prevailing at the time of the transfer. You may still apply the exemption if the transferor has had to lower their standard of living for some extraneous reason, such as the loss of employment or drop in income on retirement.’

In using this allowance, past test cases suggest that if the gift was made on a regular basis, almost a commitment to pay, that this will help demonstrate the objectives of the regular gifting.

This can be a complex allowance and each case needs to be calculated carefully, however, in some cases, this option can be highly valuable in allowing the value of an estate to be capped by giving away surplus income that might have otherwise been accrued and eventually subject to inheritance tax.

Contact Churchouse Financial Planning Limited for further information on 01483 578800 or at www.churchouse.com.

Churchouse Financial Planning Limited is authorised and regulated by the Financial Services Authority.

Economic Update Spring 2010

Now the election race is over and the new coalition is in place, it is clear looking back over the manifestos from all political parties that the UK economy is in need of a firm hand to guide it through the next years by reducing the national debt, whilst maintaining reasonable services. This is likely to mean higher taxation for most, cost cutting, and other change that I am sure will be announced in the new budget now set for 22 June. As we have also now entered a new financial year (2010/2011), now may be a timely reminder of some of the examples of the new tax allowances available to you and an opportunity to take advantage of these. This may include ISAs (now £10,200 for all eligible), the annual capital gains tax allowance (remaining at £10,100 thus far) and the gift allowance of £3,000 per person for inheritance tax purposes, to name a few.

Personal and business financial planning has always been affected by the political landscape that surrounds it and I am sure that we will begin to see the outline of change being introduced over the next few months, falling in line with the anticipated measures to vigorously control the economy. This may mean that areas such as pensions tax relief, inheritance tax thresholds, capital gains tax charge rates could be affected by the new administration.

It is clear that as we enter this new era, taking stock of your current financial position and reviewing where and if changes need to be made to your financial planning is going to be ever more important. The planning opportunities will change and change usually brings the need to review to secure any new opportunity. The team at Churchouse Financial Planning looks forward to continuing to help you with these changes over the course of the next years.

This newsletter is not intended as personalised investment advice. You should contact us for advice on your personal circumstances and if you would like to review your pension, investment or overall financial planning over the forthcoming summer, then please let me know and we can arrange a suitable time to meet and look at your individual circumstances, aspirations and requirements.

We look forward to speaking to you.

Keith Churchouse, Director of Churchouse Financial Planning Limited in Guildford, Surrey

Churchouse is a Trademark of Churchouse Financial Planning Limited

Churchouse Financial Planning Limited is authorised and regulated by the Financial Services Authority.

Whose hanging who? The hung parliament we feared!

It has been a long night for us all. I was in a radio station in Guildford at 12.30 this morning chatting through the beginings of a historic night, with the exit polls now apperaing to be reasonably correct, although it was hard to believe at their release at 10.00 pm.

The slide on the American stock markets almost went un-noticed and this seems to have been a part reaction to the euro-zone situation as it deepens (and a possible error on a placed deal of Billions rather than the correct millions!/ OPPS!), with other markets, such as Asia following. Unusually, the UK Bond markets opened at 1.00 am this morning (07/05/2010) and this was designed to cope with this anticipated election situation. However, early readings show that sterling has weakened slightly, with the FTSE 100 slightly down on early trading. The rest of the day will see where this takes us.

Although most of the UK results (over 600 are now in), it appears that a long day and possibly weekend of negotiations will follow to form a coallition government. Watch this space.

Keith Churchouse/ www.churchouse.com

Churchouse Financial Planning Limited is authorised and regulated by the Financial Services Authority.

Which Election will affect your financial planning?

We are just over a week away from the day that we cast our votes and make the decision as to which party or parties are going to lead our nation into the future. Sadly, apathy to the choices available due to expenses scandals may be the overall winner.

Not since the 1970’s has the race been so close and the prospect of a hung parliament seems to be an ever more real prospect. As is currently being muted, and based on the polls, the prospect of a coalition government is realistic and it appears that other than Germany, many of this partnerships do not last long, requiring a further general election soon after. Just Google 1974 and politics and you will see what I mean.

Whoever sits in Number 10 (and Number 11), the reality is that the UK has some significant financial issues to face and this will require a firm hand to steer us through what is likely to be a tricky few years. All political parties are clear on this, it’s just the way they wish to dress the issues that change. This is likely to mean that the ‘tax take’ required from individuals will rise, as it will for business. And this will have an effect on personal financial planning as it will for business planning, with the real possibility of changing income, capital gains and IHT tax rates, allowances and reliefs, such as pensions, being changed.

This is likely to make 2010 a year of change with proposed emergency budgets and changes in legislation which is likely to make financial planning ever more crucial over the coming year and years. Reviewing your finances and financial planning regularly during the year will be important in ensuring that any new requirements for increased taxation are planned for accordingly.

Finally, is it me, or have the Chancellor and prospective Tory Chancellor been moved out of the limelight with only Vince Cable making regular public appearances? We don’t see or hear them much.

Be ready for your planning in 2010 and for financial planning advice, contact Churchouse Financial Planning Limited on 01483 578800 or at info@churchouse.com.

Churchouse Financial Planning is authorised and regulated by the Financial Services Authority

Pensions Contracting in or out? Have you made your decision?

Pensions Contracting in or out?

This is a subject that comes up quite regularly and involves your second state pension. Nearly everyone can expect to get a basic State Pension when they reach State Pension age, currently around 65, but this age is rising. You qualify for the State Second Pension (S2P, although it was known as SERPS) if you are or have been employed and earning above a certain amount on which you have paid National Insurance contributions (NICs). The government currently allows people to leave S2P by contracting out. If you contract out, the government will pay some of your National Insurance contributions (called a rebate) and income tax relief into a personal or stakeholder pension of your choice.

This money is invested to provide benefits at retirement instead of the benefits you would have received from S2P had you remained in the state scheme.

The government is expected to remove the option to contract out of S2P from 2012, but final salary occupational schemes will keep the option.

If you are contracted out through a personal or stakeholder pension, you should review your decision now.

Your decision about whether to stay contracted out will depend on, among other things:

• your personal circumstances
• how you wish to receive your benefits at retirement
• your attitude to investment risk

Although each client is different, we would normally recommend that you contract back into the State system and if you would like to achieve this change then we would recommend this is undertaken before the end of the tax year. We look forward to hearing from you if this is of interest to you.

This may also provide a great opportunity to review your pension planning at the same time.

Churchouse Financial Planning Limited is authorised and regulated by the Financial Services Authority.

Newsletter Notes March 2010/ End of tax year planning

End of Tax Year Planning Issues 2009/2010

Having just finished our march 2010 client Newsletter, I did not think it would be prudent to not provide you with a reminder of the tax year end issues which are coming a bit earlier this year because of the Easter break. Some institutions will only accept applications and changes up to Thursday 01^st April because of this.

A quick reminder of the issues that you may want to consider with your financial planning are:

• ISA investment 2009/2010, up to £10,200 for those over the age of 50.
• New ISA allowance 2010/2011 of £10,200 for all from 06^th April 2010.
• Capital Gains Tax allowance available up to £10,100 in the tax year 2009/2010.
• Gift allowance of £3,000 per donor for inheritance tax purposes (you can also go back 1 year if not used).
• Tax changes due for those earning over £100,000 pa with a phased reduction in the personal allowance and over £150,000 pa (50% income tax) from 06^th April 2010.
• Pension contributions allowances for 2009/2010.
• Minimum Pension age increases to 55 from 06^th April 2010.

This is not an exhaustive list and your planning may involve one or more of these allowances. If you have not completed your planning for this tax year then please let us know how we can help to maximise the potential that may be available to you.

With a general election due in the next few months, you may be reminded that donations to political parties are an allowable business expense.

Contact Churchouse Financial Planning Limited at info@churchouse.com for further information.

Churchouse Financial Planning Limited is Authorised and Regulated by the Financial Services Authority