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Happy New Tax Year to you all
Article 50, Nicola Sturgeon asking for Indy Ref 2 or Donald Trump sailing towards North Korea, none of these events seems to shake t stock market in the UK at the moment as our chart of the MSCI UK index shows.

Exeter Financial AdvisorMSCI UK IMI; source Thomson Reuters

Following the referendum

Following the referendum the UK’s leading index rose of the back of the fall in the price of sterling with many commentators saying that the pound would fall further against the Dollar after the triggering of Article 50. So far this has proved not to be the case. This week I read yet another headline about the possibility of Sterling rising towards the end of the year. We shall have to wait and see how things develop with the EU. The Easter break and elections in France are probably having an effect on negotiating our exit from the EU.

Exeter Financial Advisor
Pound v Dollar: Source Thomson Reuters

 

 

In the mean time we have entered a new tax year.

So, here is some good news. The annual ISA allowance has gone up to £20,000.00 per year or if you are saving monthly, £1666.66 per month. For a couple this means that they can now build a £200,000.00 tax efficient portfolio in five years. With our leading UK index yielding 3.8% at the time of writing this article you could receive a natural income of £7,640.00 per year income without paying tax.

The second piece of good news is that the Main Residence Nil-rate band came into play from the 6th of April. This means that if your estate is worth less than two million pounds that will now not only benefit from the standard Nil-rate band of £325,000.00 for any type of asset, you have a further £100,000.00 allowance for your main residence. This applies only to the residence of the deceased being left to direct descendants [Child, Step Child, adopted Child or foster child]. Buy to let property is excluded and the allowance will reduce by £1 for every £2 that the estate exceeds £2 million.

Applying for probate is going to be a different matter. Currently there is a flat fee of £155 for solicitors or £215 for an individual to apply for probate. There are proposal for a tiered system to come into existence from 1st May 2017. This could see estate with a value of less than £50,000 avoiding fees, but the tiered structure could see estates greater than £500,000 pay £4000 to apply for probate. This increases further to £8,000.00 for estates over £1 million rising to £12,000 for estates over £1.6 million and reaching £20,000 for estates over £2 million. These new rules still need to go through parliament after the Easter break and we may see some amendments put forward. There are some that are arguing that this is just an IHT stealth tax rather than a fee. We shall see if this becomes law in its current planned format.

We offer free initial consultations if you have any questions about these or any other matters.

 

     
 
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