Don’t let your legacy be inheritance tax for your grandchildren

The Government has rejected proposals to regulate will-writing, following a written request from the Legal Services Board. This means will-writing will remain unregulated and anybody can write a will, not just solicitors.

The Governments decision looks questionable after it has been revealed that many consumers using will-writing providers are getting a poor service. Often providers are more interested in selling additional services than tailoring the will to the customer’s needs. Many customers also cite a propensity for wills to get lost because 60% of independent will-writing firms close within their first four years of operation. Without regulation, many consumers are not being adequately protected at the point of their will being written or an estate being administered.

Properly trained will drafters know that wills must ensure the right people benefit from your estate in the right proportions at the right time, and your wishes are adhered to after your death. Wills should also make life easier for those you leave behind. Probate, the process of administering your estate, is hard enough with a will. In its absence the rule of intestacy applies, meaning the law determines who benefits from your estate. If children are involved, guardians should also be appointed.

I have spent a great deal of my time assisting clients to make sense of how they arrange their finances. This is particularly true when drafting a will because I have to ensure they understand the financial consequences of their plans. Wills are an exceptionally high consequence transaction.

When drafting a will clients need to consider:

  • Is will planning really the be all and end all in terms of proper financial planning?
  • Even if you have a will that is properly drafted and executed, what is the end result?

Let me tell you that normally the end result of having a properly drafted will is that your grandchildren will end up paying your Inheritance Tax!

If that is the legacy you wish to leave them then that is fine. If not, you need to see someone who can think outside of the box and draft a will that keeps your money in the family and out of the taxman’s pocket. Contact us to find out more.

Ray Best can help you protect your financial future. To find out more, simply click here!

Our blogs are getting attention, so we are increasing our website’s security

In the past 48 hours our website has received 1,000 login attempts from machines all over the world. This is a sophisticated attack on our website, and our brilliant web specialist says it is the largest non-DDoS attack in history. It seems someone wants to shut us down – but why?

It could be because of our crusading for a fairer tax system for UK based small business enterprises. Someone wants us to stop sharing information that keeps money in business owners’ pockets and out of reach from the tax man. It’s not that we’re against businesses paying tax, but rather we believe small business has an unfair share of the tax burden, while big business gets special treatment.

You may remember that we proposed an additional turnover tax in a previous blog to counter the rather creative tax management strategies of big business. Maybe this is what rattled someone’s cage and provoked them to take steps to stop us from speaking out.

But whoever tried to hack our website will be disappointed. We will continue to highlight the imbalances in our tax system, which allow big businesses to fail to pay their share while small businesses struggle to stay afloat.

Whatever the reason for the attack, we’re going to be increasing our security. So whoever is trying to shut us down will have to try much harder because our crusade for a fairer tax system that brings big business to account will never end.

Amazon pays less in tax than it receives in government grants

To give you a recent example of the smoke and mirrors used by big businesses, the UK arm of internet shopping giant Amazon paid £2.4m in corporation tax in 2012, but received almost the same amount (£2.5m) in government grants. The grant from Scottish Enterprise, part of the Scottish government, was to enable Amazon to develop its operations in Scotland and to create more jobs.

Amazon’s grasping for money while keeping its other hand in its pocket is even more outrageous when you consider that it generated more than £4.26bn in sales to British customers. How does it get away with this? By exploiting current loopholes in where money is generated and where it is taxed.

The Conservative MP Charlie Elphicke, who has led a campaign against the tax practices of large multi-nationals, condemned the Scottish Government inducements to Amazon. “It is a nonsense for the Scottish Government to be giving grants to Amazon to build a distribution centre that they would clearly have to build in the UK anyway,” he said, “The idea that Amazon is based in Luxemburg defies belief.”

With some arrogance, Amazon has informed MPs that the company earns its profits in Luxembourg, its European headquarters, and is therefore not obliged to pay any more tax than it already does. Amazon manages to pay only a tiny fraction of its profits in corporation tax because all sales to British customers are routed through aLuxembourgaffiliate, Amazon EU Sarl.

Amazon’s UK operations are funded by fees it receives from Amazon EU and, since these only just cover operating costs, little is left over for Her Majesty’s Revenue and Customs (HMRC) to tax. Amazon EU pays little tax in Luxembourg because it pays hundreds of millions of Euros each year in fees to a tax exempt affiliate, also registered in Luxembourg.

Liberal Democrat MP John Hemming said the figures showed the inadequacy of existing rules to tackle the problem of profit shifting by major corporations. While a spokeswoman for tax avoidance campaign group UK Uncut said, “It’s an absolute disgrace that Amazon is paying such tiny amounts in tax. The government should be clamping down on tax avoidance rather than slashing the welfare state, privatising the NHS and cutting legal aid for ordinary people. This shows us yet again that the Government is making a political choice rather than an economic necessity.”

Last night MPs from all parties attacked Amazon’s tax stance, which they warned was harmingUK-based high street retailers.

“Amazon’s behaviour is not only unfair, it is anti-competitive, putting British businesses that do pay their proper tax at a disadvantage,” said Margaret Hodge, chairman of the Public Accounts Committee (PAC). “Paying £2.4m in tax on £4.2bn of sales is just a joke. What people will find particularly galling is that the amount Amazon is paying in tax is actually less than they are taking fromUKtaxpayers’ pockets in the form of government grants.”

So if you are planning to buy any books, I suggest that you vote with your feet and place orders with instead.

How Google pays just £6m on £2.6bn profits

The revelation about Amazon’s derisory tax bill emerged at the same time as the grilling of Google’s Vice President for Sales and Operations for the second time to answer accusations that he misled the PAC over his company’s tax affairs.

In November Matt Brittin claimed that all his company’s sales team were based inIrelandand that the job of itsUKstaff was merely to market Google as an advertising space. The distinction allowed the company to pay just £6m of tax on £2.6bn of profits derived in the UK in 2011. However, an investigation by the news agency Reuters has suggested many of Google’s UK staff have job descriptions that would contradict this.

Today Mr Brittin denied trying to “disguise” the way its business operated to minimise its tax bill in the UK. Instead he insisted that he stood by evidence he gave last year that all of the firm’s advertising in Europe was sold through its offices in Ireland.

Such practices are at the top of the UK Government’s agenda for its chairmanship of the G8 this year and will be discussed by world leaders when they meet in Northern Ireland next month.

Ministers promise to get tough, but will they succeed?

Ministers have promised to take action following the revelations about how little big name brands like Apple, Starbucks, Google and Microsoft pay in tax in markets where they reap billions in sales. The companies say they follow the rules but David Cameron and George Osborne say that they intend to impose tighter regulations that would prevent the out-sourcing of profits to low tax jurisdictions.

We’ve heard this talk on forcing big businesses and brands to pay their fair share of tax before. Politicians will have to find a way that chains brands and businesses to a system where tax is paid on where it is generated. But when you consider that opposing them are some of the best accountants money can buy, able to find loopholes as soon as authorities try to tie them down, you have to question whether the Government will succeed.

Whatever the outcome, you can rely on us to continue campaigning for a fairer system on our blog no matter how many hackers try to shut us down.

Ray L Best

PS Ray is an Alternative Financial Planner and published author. Published works include “How Much!” and “Inheritance Tax Simplified”, which both cover Inheritance Tax. He is also responsible for “Financial Reality”, a seminar that outlines the need to radically re-think current financial planning issues.

For wealth management, inheritance tax planning, capital gains or corporate tax planning, please e-mail or call 01189 347 920 to arrange a free consultation.

Take time out of your day and reflect on your core values, I love the following poem by Rudyard Kipling, it’s one of my favourites…….


IF you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:

If you can dream – and not make dreams your master;
If you can think – and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ’em up with worn-out tools:

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: ‘Hold on!’

If you can talk with crowds and keep your virtue,
‘ Or walk with Kings – nor lose the common touch,
if neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And – which is more – you’ll be a Man, my son!

Ray Best can help you protect your financial future. To find out more, simply click here!

Companies, tax and the global economy

Concerns have been raised that although global trading companies are involved in as much as 60% of the global economic activity but pay only 6% of all business taxes. This means that UK resident small businesses suffer the burden of having to pay the majority of tax despite having much lower turnover.

No wonder there is increasing concern and focus on the blatant tax avoidance of these global companies. Recently concerns have intensified leading to the formation of action groups and more attention from the media.

There is a great difference of opinion about the contribution that international business is making to the public finances There are those who argue that international business is undermining the international tax system and paying too little tax; the alternative view is that international business is sticking to the letter of the law and paying the amount of tax that is legally due.

There was a report published at the end of 2012 by the Public Accounts Committee published which covered Amazon, Google and Starbucks and accused these and other global trading companies of abusing the existing rules and not paying the tax that they should.

Investigative journalist and former tax-inspector Richard Brooks has published a book, exposing the shocking ways of how the richest individuals and companies deprive the UK state coffers of billions of tax money. The Great Tax Robbery: How Britain became tax haven for fat cats and big businesses shows how despite making millions in profit, a host of High Street names, including Vodafone, Barclays, Topshop and Boots as well as numerous rich individuals legally pay almost no tax and how HMRC turns a blind eye to billions of illegally unpaid taxes in secret Swiss bank accounts.

If you would like to buy a copy, it is available from our company at a discount to the normal retail price,

In nature, when a foreign body finds a host that provides it with nourishment and it provides it with little or nothing in return we term these parasites. Surely that is exactly what these global trading companies are.

The only way to deal with the global trading companies is to hit them in a way that hurts them and that is financially.

The way in which companies are currently taxed is on profits, since global trading companies are able to manipulate their accounts to reduce their profits in ways that UK small businesses cannot. Then why not introduce a tax on turnover at say 6 %, the payment of which could be reduced or offset by any corporation tax paid.

I understand that in California there is a similar system in operation only they call it a sales tax.

Why not go a step further and make the tax retrospective over the last 5 years. Think of the billions that could be raised, not only to reduce our structural debt but to fund reductions in tax and stimulate growth in our economy.

What do you think ?

Ray Best can help you protect your financial future. To find out more, simply click here!

Judge to rule on HMRC’s tax deal with Goldman Sachs

A judge is being asked to decide if HM Revenue and Customs (HMRC) acted illegally by letting investment bank Goldman Sachs off part of its tax bill. Campaign group UK Uncut Legal Action claims the taxpayer missed out on up to £20m as a result of what it calls a “sweetheart” deal.

HMRC admits that it should recovered at least another £5-8M, and that it has since changed the way it negotiates tax deals with big companies. HMRC admits that over a period of years in the 1990s, Goldman Sachs had avoided tax by routing bonus payments through a subsidiary in the British Virgin Islands saving a fortune by non payment of National Insurance (NI) contributions.

Instead of going through a legal process to recover the money that they believed was owed to the taxpayer, Dave Hartnett, formerly in charge of HMRC decided to come to an arrangement with Goldman Sachs directly, in what is known as a “bespoke settlement”.

Although Goldman Sachs has since paid the missing NI, they failed to pay the interest which was due.

HMRC admitted it had made a mistake, and said it should have collected up to £8m that was owed by the bank. However a whistle-blower has informed the Public Accounts Committee that the amount may have been nearer to £20m.

UK Uncut Legal Action’s costs are being funded by public donations, which have amounted to £20,000.

“We want to show HMRC that doing these tax deals is not politically, legally or morally acceptable.” If you want to make a donation to UK Uncut you can follow this link.

Ray Best can help you protect your financial future. To find out more, simply click here!

Some thoughts for those who do work hard to accumulate capital ……

Some thoughts for those who do work hard to accumulate capital ……

At least you know that after a lifetime of graft that your accumulated assets (including your pension will pass to your wife and children……or will they?

Do your wills hold only two nil rate bands?

Do you understand your will anyway? Even if it is one of the 10% of wills that is up to date……

As a business owner have you incorporated a fail-safe device to ensure your business keeps running even though one of your key owner directors is unable to?

All answers on a postcard to Pareto Lawrence Ltd Pantheon House, Beech Court, Hurst, Berkshire RG10 0RQ.

For Entrepreneurs Only (everyone else look away)

To dramatically boost your earnings work less not more……

Take more time off…..

Eliminate “stuff”….

“One does not accumulate but eliminate.

It is not a daily increase but daily decrease.

The height of cultivation always runs to simplicity.”


To give your business a” karate kick” in the right direction …….

Goal setting is the core skill for all individuals and business owners

Often neglected or incompetently addressed and “taught” goal setting is the core skill that has the power to change one’s life significantly. Yet few bother to take the time, for those that do, the rewards are immense.

For those that don’t…..

“Would you tell me, please, which way I ought to go from here?”

“That depends a good deal on where you want to get to,” said the Cat.

“I don’t care much where…” said Alice.

“Then it doesn’t matter which way you go” said the Cat.

–          LEWIS CARROLL, Alice in Wonderland.

Ray Best can help you protect your financial future. To find out more, simply click here!

A tribute to Alice Pyne

Alice Pyne recently died following a long battle with cancer.

Alice and her sister raised more than £100,000 for charity and founded Alice’s Escapes, a charity that provides holidays for families with seriously ill children and were both awarded the British Empire Medal.

Despite suffering from cancer Alice not only raised a great deal of money for charity but also succeeded in completing most items on her “bucket list”, including whale watching, swimming with sharks, travelling to Kenya and meeting Take That.

So please take a moment to link to Alice’s website and pay tribute to this wonderful young lady –

Employee Benefit Trusts Settlements with HMRC

HMRC’s ‘Employee Benefit Trust (EBT) Settlement Opportunity’ is intended to encourage employers and companies who had used EBTs and similar structures to settle early any outstanding tax and NICs without the need for HMRC to consider litigation.

The principle behind the Settlement Opportunity is that HMRC will seek to settle outstanding enquiries on the basis that payments and allocations made to individuals out of EBTs prior to 6 April 2011 will be treated as earnings from an employment and the income taxed once and for all on that basis.

In addition, and depending on the way in which any individual schemes may have been set up and implemented, to achieve clarity and closure for customers in respect of their use of EBTs prior to 6 April 2011, any such settlements might also encompass :

  • Income tax (PAYE)
  • National Insurance Contributions
  • Corporation Tax
  • Inheritance tax, and/or
  • Other taxation charges on the EBTs and beneficiaries

Once the detail of any settlement is agreed it:

  • allows customers to pay the tax and NICs they owe to the Exchequer
  • avoids the high costs associated with complex enquiries and possibly expensive litigation
  • provides certainty on the interaction of different tax provisions and regimes that if litigated, may result in additional charges

This update provides an overview of developments since April 2011 to help explain to customers more fully how their liabilities will be calculated. Taken together, HMRC believe that this will help more people to engage in open discussions with HMRC about their individual circumstances and help to achieve early closure to their EBT past affairs.

Customers with EBTs or similar arrangements which they think might be within the Settlement Opportunity should contact their professional advisor in the first instance or their HMRC caseworker or Customer Relationship Manager to discuss the position further.

New legislation enacted

Following the launch of the Settlement Opportunity the ‘disguised remuneration’ legislation was enacted in July 2011 and applies to EBTs from 6 April 2011 onwards (with certain transactions also being brought within the new legislation if they were carried out between 9 December 2010 and 5 April 2011 inclusive).

Regulations also came into force on 6 December 2011 to charge Class 1 NICs on amounts chargeable to tax under the disguised remuneration measure.

See our page on EBT’s

Litigation involving EBTs

HMRC has been successful in litigating cases which have involved EBTs as part of the arrangement(s) entered into by a company/employer.  The most significant of these cases is HMRC Commissioners v PA Holdings Ltd [2011] EWCA Civ. 1414 where the Court of Appeal decision upheld HMRC’s arguments that an arrangement intended to deliver a bonus through an EBT was subject to tax and NICs as earnings.

Recent Case Law – Rangers Football Club

Two out of three judges sitting as the First-Tier Tax Tribunal ruled that Murray International Holdings (MIH), the then owner of the club, had made the £47.65 million of payments in dispute as loans rather than earnings. It concluded that the company’s tax liability as assessed by HM Revenue and Customs (HMRC) should therefore be “reduced substantially”, with only some payments subject to tax.

HMRC said that it was considering an appeal.

Since the payments had been made as loans rather than earnings, as set out in the terms of each EBT, they could therefore be recovered from the member of staff or that person’s estate, the tribunal said.

An EBT is a legal structure which can be used to deliver various benefits to employees.

They were previously used to enable companies to minimise the income tax and national insurance charges on pay to high-earning employees and directors, as well as allow those companies to claim corporation tax deductions on payments into the trust. However, many of the previous tax advantages of that particular arrangement were removed as part of the 2011 Finance Act.

“HMRC has made it clear that it objects to EBTs being used to provide loans to employees and its desire to recover what it sees as unpaid tax from this structure will not go away,” he said. “It must therefore be likely that HMRC will appeal, despite this not being the first time it has failed to persuade a Tribunal that PAYE and NIC should be paid.”

Need for taking action

Clients with Employee Benefit Trusts face an uncertain future, what is certain is that if the EBT has assets and they attempt to extract them then they will suffer personal taxation consequences.

If their EBT is pregnant with loans then they will either pay interest on those loans every year OR a benefit in kind charge.

How much could you end up paying with an EBT with loans or assets of £400,000 :-

Loans – a minimum of £6400 per annum in real money (assuming a government loan rate of 4%).

Assets – a minimum of £160,000 in PAYE plus further monies payable for NIC. [As a very rough guide almost £300,000 in tax].

Off the Shelf Extraction Schemes 

The tax houses that promoted EBT’s are now promoting EBT extraction schemes. We have carried out a full analysis on these schemes and taken advice from a leading tax barrister – who has advised that most of these schemes are likely to fail. So clients who pay substantial fees out could lose a considerable sum of money if they partake in these schemes for the full amount of loans or assets held by an EBT.

Bespoke Extraction Methods

In our opinion – it is essential to use bespoke strategies, rather than a one size fits all approach. We have had remarkable success in extracting clients from EBT’s.

Ray Best can help you protect your financial future. To find out more, simply click here!

Annual allowance cut ‘will punish’ catch-up pension savers

A cut to the annual allowance in the Autumn Statement would hit middle-class savers who increase contributions to their pension pot later in life.

Yet this is what the Financial Times has reported as a distinct possibility as we understand George Osborne is considering raiding higher-rate tax relief for the rich by lowering the threshold of the tax-free annual allowance from £50,000 to £40,000 or £30,000.

This is rumoured to have been instigated by  the Liberal Democrats, who want to cut to higher-rate tax relief and could mean an extra £600m to £1.8bn each year for the Treasury.

Our concern is that this could penalise  the middle-class and accelerate the closures of defined benefit schemes.

Ray Best can help you protect your financial future. To find out more, simply click here!

Employee Benefit Trusts – formerly a Blessing, now a Curse!

We have heard that many clients with EBT’s are sitting tight and taking no action, but is this really sensible?

Stop procrastinating – it is widely rumoured that HMRC are intending to go after existing EBT’s and seek settlement for tax not paid (so it is likely that they will assess the tax missed as what should have been paid as a bonus distribution on the whole £400,000 – plus of course the NIC).

So for an EBT with loans of £400,000, HMRC may be seeking a settlement of up to £271,200 (for missed PAYE and NIC).

Doing nothing is not really an option as not only is a potential settlement hanging over you but also there are the annual trustee fees and Benefit in Kind charges. These could amount to £104,000 over the next 10 years.

An existing EBT of £400,000 will often pay annual trustee fees of circa £4000 plus annual BIK charges on notional interest of £16,000. Therefore this will provide for an annual payments or actual costs of £10,400 pa.

Total “real” costs over 10 years would amount to = £104,000*

Total “real” costs over 15 years would amount to = £156,000*

(assuming no increase in HMRC interest rates).

So for clients the choices are either to :-

(a)   Do nothing and pay up £104,000 over the next 10 years PLUS HMRC may request a settlement and potentially have to settle a further amount of up to £271,200 to HMRC. That makes a total possible indicative payment of £375,200.

(b)   Or take action to exit the EBT completely.


There are a number of extraction strategies available with counsel opinion. The most credible of which will cost circa £50,000. There is no guarantee that they will work!

So clients can pay this and hope that it works, but HMRC may challenge it and the tax may have to be paid as well as the fees!

We wonder whether this is a sensible course of action?

We provide bespoke strategies for EBT clients (either with loans or with cash or other assets) and we believe that we can extricate most clients from EBT’s.

We prefer to negotiate directly with The EBT trustees in resolving issues with EBT’s and we can extract clients from their EBT’s and for best results we also provide additional advice on their business and OR personal tax planning issues.

There is a clear benefit for EBT clients to be pro-active to resolve EBT issues now to resolve matters as their EBT’s will only cost more as time proceeds

Ray Best can help you protect your financial future. To find out more, simply click here!





Facing a Sky fall Future (3) – I can’t afford it !

We really posted a blog on why people do not fund pensions. The point that really required making was why do so many fail to postpone their immediate “wants” and instead use their money now to create a portfolio of investments that will sustain an income later on in life.

There are situations when you may not be able to afford basic life necessities, that’s unfortunate, I know, as in my past I have been at that point myself on more than one occasion.

Too often though this type of excuse requires closer examination and instead the terms  “chooses not to afford” or “need to make some changes” would be more appropriate.

After all you are in control of what you do with your money. So you need to think about what changes you need to make to your spending habits and move toward making these changes or face a bleaker financial future.

Assess how you allocate limited resources, like time and money, as this will lead to more prudent planning and allocation of these resources.

I am not passing judgment on how you live your life or how you spend your money – so think of this as a challenge to think and plan more deeply about where you want to go, what we want to do, and what it’s going to take to get there. One less lunch or dinner out, or one less impulse purchase each week adds up quickly. Small changes can mean the difference between forward advancement, and the “I can’t afford” blues.

In my opinion the info graphic posted a few blogs ago based on HMSO research insufficiently takes into account the people who really can afford to but are mis-allocating their resources.

“I spent a lot of my money on booze, birds and fast cars – the rest I just squandered.
George Best”

Insurance company Liverpool & Victoria recently carried out a survey which concluded that we as a nation are spending over £158bn on “lifestyle essentials” including holidays and satellite TV subscriptions, and that people would rather cut back on other spending by shopping in cheaper stores.

I spent an hour yesterday in discussion with two of my business owner clients, the time was mainly taken up with me putting forward strategies that would assist them accumulate wealth and their responses which were reasons why they said they could not afford to do anything personally and that their business had no cash.

It was a late appointment, so I passed them in the car park later, they did not seem overly impressed with the cars that either I or my staff had, and later drove off in their newly plated massive 4X4 vehicles. Nuff said!

“Skyfall” financial future for you (2) ?

Many people fail to accumulate sufficient funds during their lifetime and will never be financially free, consider the following chart demonstrating just how many people will still need to work later on in life, ask yourself this question NOW – is this what I want for my future?

Which excuse do you plan to use?

Ray Best can help you protect those you love -to find out more, simply click here!

Skyfall financial future for you?

You should consider yourself the most important person in the universe, you are unique and you are special.

Accepting that, we presume that you would wish to organise your financial affairs to reflect this. Hopefully therefore you won’t (like almost everyone) spend more time on planning your holiday than on planning for your future.

Also you won’t allow yourself to be drawn into the same planning habits as (almost) everyone else.

Why is it that so many people tend to follow the herd and “bond” themselves to follow have similar saving and spending habits as others?

“Insanity: doing the same thing over and over again and expecting different results”.
Albert Einstein

If “diamonds are forever”, so are people’s dream; both are precious but unfortunately dreams seldom turn into reality unless you take action that is directed to improve your financial future.

After all having an ambivalent or live and let die attitude is all very well but you don’t only live twice – “you only live onc”. So this life, (your life), is not a dress rehearsal and therefore you need to take care that you do not follow the financial planning of the herd – unless you want a financial “thunderball” to impact your finances at some point in the future.

Of course if you have suffered a disappointment in the past with a financial product you may be inclined to “never say never” about all financial products or planning in the future.

However consider this – when you get to age at which you hope to stop work – will you be able to? Or will the sky fall in on you when you find out what a small amount of financial reserves you have accumulated?

To avoid a “skyfall” future you need to plan regularly, consider getting help and assistance to avoid all (or most) of the financial mistakes that can dramatically affect your future well being.Scimple!

Ray Best can help you protect those you love -to find out more, simply click here!

We need to talk about Kevin….

In a recent blog post we stressed the importance of planned savings for children to help them build towards a brighter future. It is just as important to consider their welfare as they are growing up…

We live in the technological era, children and teenagers have more freedom and access to more information than we ever had. Given the type of unrestricted information available on the internet, is it any wonder so many teenagers go astray?

Teenage years can be a dangerous time. The internet exposes teenagers to the temptations of drugs and underage sex at a time when they are most impressionable. Rather than educate them on the risks, the internet has simply added to the lure of risky behavior. A survey by The National Center on Addiction and Substance Abuse found out just how much, and those that are most vulnerable.

The survey found that teenagers who are highly stressed, bored or have too much money to spend are twice as likely to succumb to the allures of tobacco, alcohol or illegal drugs. What’s worse, the study assessed that more than half of 12 to 17 year olds fall into at least one of these categories!

If you have teenagers yourself, these findings might either sound alarming or not too surprising. After all, how many times have you heard teenagers complaining of being bored with nothing to do? Resolving the problem of teenagers having too much money is easy – put it into an inaccessible savings account! But dealing with boredom or stress may need a more radical solution.

Teenagers need more than financial planning

Do you have problems coping with the demands of teenage children?

The view of a judge who regularly deals with youth was this,  “ Always, we hear the cry from teenagers, “what can we do , where can we go?”

His answer was this – “You should go home, mow the lawn, wash the windows, learn to cook, get a job, build a raft, visit the sick, study your lessons and after you have finished read a book”.

“Your town does not owe you recreational facilities and your parents are not there to provide you with fun.”

“The world does not owe you a living, you owe the world something, such as your time, energy and  talent”

In other words, grow up, get out of your dream world and learn to develop a backbone rather than a wishbone. Start behaving like a responsible person. You are important and are needed. Don’t wait for somebody else to do something. Take the initiative and do something now!

I wonder though do these words apply only to teenagers or are they more universal, what are your thoughts?

Advising teenagers of how they can relieve their boredom is one thing. Seeing them actually take action is another matter. This is where parents need to help, parents should be sensitive to the stresses their teenagers are under; help them relieve their boredom; limit the amount of money they have to spend and, ultimately, be more engaged in their lives.

Part of being a teenager is learning how to behave like a responsible person. This is something they have to learn on their own; other people can’t organize their entire lives for them. But parents should be there to pull them back on the right path should they wander astray. Just like they need parental guidance to avoid the risks of drink, drugs and tobacco, they need you to spend an appropriate amount of time with them.

If you have no children of your own, consider offering support for others through voluntary work and helping an impressionable teenager choose the right path through life.

Alternatively you could consider sponsorship. I have sponsored Kathy from the Dominican Republic for over eight years now, she was living with grandparents who gave her the love and care she badly needed but had no money. Kathy had a medical problem and a dental health problem (her teeth were malformed). Sponsorship often means more than sending a few pounds a month for the child, you often have to provide more widespread financial support for the family.

Sponsorship was a big step for me, largely because for most of my life I had been fairly selfish, supporting Kathy has made me a better person. The financial cost is small in comparison to the benefit I have gained.

Kathy is now like a daughter to me. Being partly responsible for her upbringing has brought me tremendous joy and fulfillment. Nowadays I cannot imagine life without her.

Ray Best can help you protect your financial future. To find out more, simply click here!

A tip on when and how to start saving for children …

Parents with a young child face a dilemma: When is the right time to start saving for an educational fund or a savings scheme for their child?

Most parents want to provide a financial sum for their children at some point in the future. But many are confused as to how best to go about this, while some will have little in the way of financial resources.

Whatever the financial situation of the parents, there are crucial factors to consider before you implement any savings plans.

Firstly, the best way to ensure your child’s welfare is not to establish a savings plan of any kind. Instead, you should ensure that you have made proper life insurance planning arrangements that provide for a very substantial sum to be paid out tax free in the event of your death or disability.

  1. Only when these arrangements are made should you consider making arrangements for savings.
  2. You may be persuaded to make regular monthly payments into some form of savings scheme for your children. Think twice before you do so, as often the charges on these plans are very high. In addition, if in the future you experience financial problems you may have to miss a payment which could subject you to penalties.

Consider potential financial consequences of a future failed relationship.

If you have low financial resources then, rather than be tempted into saving regular monthly amounts you cannot afford, ask yourself who do you know who has money and loves your children? The answer is normally your own parents.

Grandparents are often delighted to make a contribution to their grandchildren’s welfare, particularly if this involves no ongoing commitment.

So here are some suggestions:-

Allow the grandparents to establish a bare trust for your children, or to make a one off payment into a pension for them.

Making sure no-one else get’s their hands on your Grandchilden’s money

A bare trust is a very simple form of trust, and is often used to hold shares for children under the age of 18. The trust can be created with minimal paperwork and expense, and can offer tax advantages.

While this can be a very simple and cost-effective way of passing shares to a child, it does have disadvantages. In particular, the child has the right to take possession of the shares at the age of 18 and deal with them as he or she sees fit.

If they put assets into a bare trust for their grandchildren, the income and capital gains are taxed as the beneficiary’s income and gains. This can be very advantageous. For example, a child’s income may be less than the annual personal allowance, and so tax-free. Similarly, any capital gains taken in a particular year might be less than the annual capital gains tax allowance – also tax-free.

Pension savings for Grandchildren

It is not widely known, but anyone can contribute to a pension scheme (without proof of earnings) so long as they contribute a maximum of £3,600 gross per annum.

What that means is that a net payment of £2880 can be paid into a pension account (yes, even for children) and the government will top this up to £3600. This can be a one off payment or it can be continued for as long as this tax perk is available.

This means that the government will top up the grandparents contributions of £2880 by adding a further £720.

You may be thinking why put monies into a pension for young children, when they have their whole lives to save?  Pensions accumulate gross and saving a small sum at an early age can roll up into a considerable sum by age 55.

As I have said, the payment of £2880 can be a one off, or you can make repeat payments if you can afford to do so. Even making just three payments of £2880 (from the age of one) can accumulate to a sum of around £175,000 to £250,000 by age 55.

Parents saving for children

How much do the parents have available?

If only small capital amounts are possible then the parents should consider either a Junior ISA or making a pension contribution for their child.

A Junior ISA is a tax efficient way to save for your children’s future. The money you accumulate can be used to pay their university fees, a car, a wedding or simply to give them a head start in life.

Tax-efficient – Investment growth is free of income or capital gains tax

Works like a normal ISA – There is an annual limit and you can invest in stocks & shares or cash

Long term saving – Your child can access the savings when they reach 18 years of age

If the parents are wealthy they might consider placing a reasonable level of funds into a discretionary trust, particularly if this is wrapped around an offshore bond. This type of arrangement defers tax and can be exceptionally tax efficient if arranged properly. Take care with the trust wording and ensure it is flexible. The amount placed into the trust or “settled” would also be useful in potentially in making Inheritance Tax Savings as it would be a “potentially exempt transfer”. I intend to cover this more fully in another blog post.

Ray Best can help you protect your financial future. To find out more, simply click here!



A tip on how to provide more protection for your loved ones, for less

How would you like to protect your family and your business for less money than you are currently paying out? I thought so. Read on to find out how…

Getting more for less – sounds like a bit of a trick doesn’t it?

There is a trick involved, but it’s not about getting more for less – it’s about getting less for more!

This is the trick played out by life insurance companies when they ask people to pay far more in premiums than they need to.

I have known about this trick for over 30 years. During all this time, I’ve refused to be fooled by it and refused to allow my clients to overpay for insurance policies.

But this “trick” continues to be implemented by incompetent or lazy salespeople, rather than explain the realities of proper protection.  Would you be happy to find out that your hard earned money is being wasted in this way and that the life insurance companies are effectively “stealing” extra money from people who place faith in such respectable institutions – people like you, your family and friends.

It is decent hard working people who are its victims; people who could do with a bit of extra money every month rather than boost the coffers of the life insurance companies. Well, I think it’s time these decent hard working people are told the truth about making proper provision for their family or business.

Many people are paying almost double for their protection policies

Take a couple who are both 39 and want to provide £350,000 of protection for their family over the next 20 years. They need to provide this amount as they have a large mortgage and two young children.

There are a variety of ways to create these protection arrangements. If you go to a life insurance company they will ask you to pay something like £45.28 per month (assuming you are both in good health). You might naively assume that when you pay for insurance you are paying a fair amount of premium for a given level of risk. Often however the life insurance companies rig the deck and ensure that the way in which the policy is sold favours them not you.

Protection arrangements should always be for YOUR benefit. Not the life insurance company’s benefit. To ensure this is the case, you should consider a range of options. You could arrange for your total protection values to equal £350,000 on a minimal cost basis. This would mean that you would both only pay a combined amount of around £25 per month. Or you could double the amount of protection for your family for a little less than £4 per month extra of the £45.28 quoted by the life insurance company.

(For the avoidance of doubt my comparison of the different costs are all from one life insurance company.)

As you can see if you are interested in protecting your family then surely you would be interested in such a large increase of additional protection for such a small extra cost.

However the costs and benefits are only one factor to consider when arranging protection, the other factor is speed with which monies can be paid out.

As the cost of protection has fallen by around 30% over the past 3 years, what action have you taken, did you increase your level of cover by 30% and pay the same money or did you maintain the level of protection and save money?

Many people are unaware that the costs of protection has dropped in recent years, it is possible for you to review your existing protection arrangements and take out new policies for less than your currently paying. It may mean moving to a new company (as some companies have reduced premiums more than others).

In addition there are some innovative offerings by some of the companies, a few now offer free critical illness for children if the parent takes out a critical illness policy. That means a great deal for some people – it is not very often that a life insurance company gives something away!

It does pay to review your arrangements on a regular basis to take advantage of reduced costs and special offers.

If you were to die, would you want your loved ones to have to wait six months or more for the benefits from your policy? Or would you like them to receive the benefits almost immediately?

Asking how long you’d like your loved ones to wait to get your money after your death might sound like a silly question. Yet life insurance companies, rather than use plain English, write policies in all manner of complex jargon and technical terms that confuse the hell out of people. For example, they will often state that they need to admit age, when what they actually mean is you must prove your ownership of the policy by providing an original birth certificate before they pay money out. This is a term that can cause all manner of confusion.

Let me ask you another silly question, would you rather find birth certificates at the time the policy is arranged or would you prefer to leave this until death occurs (leaving your family to scrabble around looking for it at a time when you are attempting to cope with your loss)?

Taking care of this simple administration procedure now means you are leaving the life insurance companies with no excuse to hang onto the money any longer than they have to (unless the policy falls into the probate of your estate) …

Bonus tip – how to avoid the probate trap AND enable policy proceeds to be paid out tax free

If you write your protection policy in trust it will not be liable to tax. That means you can be assured that you won’t be caught up in the estate administration process and your family will receive the full amount of the life insurance value.

In conclusion almost every client that I see has inadequate (or simply wrong) protection arrangements. Protection should be first and foremost in people’s minds – particularly when it is possible to often dramatically improve protection for the family for so little.

Ray Best can help you protect your financial future. To find out more, simply click here!


A will is a cornerstone of sound financial planning and peace of mind

Many people have an aversion to writing a will. It’s understandable; nobody likes facing their own mortality. But what I have found is that clients are happier to confront and discuss about it when they have more information, as this provides them with more confidence in their decision making.

It is helpful to pre-plan your will with someone who has knowledge of the legal and financial consequences. It also helps if they understand and sympathise with what the client is going through. In this regard, a sense of humour can go a long way.

A few light hearted jokes can soften the mood of what can be a sombre discussion. However, what is not a laughing matter are the widespread sharp sales practices and poorly drafted wills people rely on to pass on their wealth to loved ones after they’ve gone.

In fact, as many as one in five wills (written by both will-writing companies and solicitors) have been flagged as being inadequate and poorly written. This has led to calls for will-writing services to be regulated.

What to consider before writing a will

BEFORE engaging a specialist to write your will, you need to understand the financial decisions you will have to make. You also need to identify what the will needs to achieve and to assess the options available to you. Otherwise you may not get a will that suits your unique circumstances and family situation.

The first step is to compile an up-to-date list of your assets (including values and ownership). This includes checking the validity of life insurance policies and whether they are written in trust.

In my opinion, without good preparation it is not possible to draft a will with any confidence. ‘Prior Preparation Precedes Perfect Planning’, as the saying goes.

Will writing is a profitable business (in the long run)

Unfortunately, there are many will drafting firms that don’t share my view. They will happily draft a will without a firm understanding of their client’s circumstances or what the will needs to achieve. If they are not putting the client’s needs first, you have to question why so many firms are keen to draft wills.

There is little money to be made from drafting the will itself. All the real money is made on the backend from selling associated services AND from a firm putting themselves forward as professional executors for dealing with the administration of the estate.

Dealing with estate administration is very profitable, particularly for estates valued at more than £500,000. Solicitors are allowed to charge up to 6 percent on estate administration without reference to the Law Society.

Now that’s a lot of money.

Firms can also add to the pot through fixing poorly drafted wills.

So when you consider that all the money is made from follow up services and very little from writing the will itself, is it any wonder there are so many poorly written wills out there?

In the past I have been shocked by the poor quality of many wills. Often they are not only poorly drafted but also the sloppy wording of such legally binding documents can be hilarious.

Here are some of the worst offenders:-

  • One will, drafted by a solicitor and a family friend, excluded a married couple as beneficiaries of their own will.
  • A solicitor practice “lost” over 200 wills.
  • A married couple were advised to take out an inheritance tax policy on a second death basis despite them being the only trustees on the policy. This meant that the policy only paid out when they both had died. I suggested they could hold a séance to distribute their assets!
  • A couple appointed their poorest relatives to look after their children, in the event of their demise, but failed to address their financial needs. When you appoint people to care for your children as guardians, is it fair they should go broke in the process?  Fortunately there is a very low cost solution…
  • A married couple who were advised to witness each other’s will.
  • Clients who were accosted in the street and agreed an appointment based on a price quoted of £35 per will but paid over £2500.

One of the most important documents to get right

Dealing with the succession of your estate is probably the most important planning you will ever do as a family. It is, however, a high consequence transaction. Getting it wrong can cause untold emotional and financial anguish.

Boiled, Fried or Roasted?

Somebody once asked me what aspect of this type of advisory planning I find most rewarding.

When advising independent clients the most interesting and rewarding aspect was drawing up their Wills. That’s because the interviews with couples, on making arrangements for the handling of their estate, were full of drama and tension. Often the topics were new to them, and hadn’t been properly discussed due to unresolved family issues.

When writing a will, you remind clients of their mortality. You also trigger sensitive memories of their parents or other relatives who have died. So naturally, meetings can be sombre.

I found the best way to lighten the mood was to tell jokes. Humour is always a great way of relieving tension, and it helped couples to cope with their emotions. As a result, meetings could be a cathartic experience that formed a stronger emotional bond between them.  Naturally, you have to empathise but I always found the meetings great fun. At the end, the couple would appear to have had a great weight lifted off them.

Strangely the worse the jokes (even about burial wishes) the more relaxed the clients became.

Getting wills right is deadly serious

I have to repeat that Wills are a high consequence transaction. Poorly written Wills can cost your family thousands of pounds to correct and may harm those you love most. They can also leave your family open to claims from HMRC for Inheritance Tax.

Carried out properly, Will drafting can be an uplifting experience. Properly written Wills (with accompanying advice) are also, in my opinion, the bedrock of all financial planning.

Ray Best can help you protect your financial future. To find out more, simply click here!

Your pension – is it really?

Many clients seem to believe that they have a pension fund, that all the cash and investments belong to them 100%, and that if they die the pension will pass to their partner or children. I beg to differ…

When I see a client I who wants advice on “their” pension the first thing I tell them is that it isn’t, – that normally gets their attention.

So whose pension is it?

As everyone knows, under normal circumstances you are entitled to 25% of the pension fund tax free, but that is only a quarter of the pension fund value, – what about the other 75%?

With current interest rates (and annuity rates) being exceptionally low a lot of people approaching retirement are taking the tax free cash out of the pension but delaying taking any income from pension.

Many people are unaware that in doing so they are “crystallising” benefits and although they are not taking any income, they are “technically” regarded as if they are. Should you die any remaining monies may be subject to a 55% tax charge on death!

To put this into perspective, let’s say you worked very hard and made sacrifices over the years and have ended up with a pension fund worth £ 400,000.

You decide to take out tax free cash of £100,000 and not to take income for now.

Two years later, you die unexpectedly.

Out of the remaining fund of £300,000, the government takes £165,000. The remaining £135,000 is available for your family…

Would you be happy with this situation?

If not what are you planning to do about it?

There are two possibilities :-

  1. you need to find the secret of immortality.
  2. take steps to ensure that in the event of your premature death your family does not have to  suffer financial hardship.

What you may not want to do, is to do nothing and allow the government to take most of your residual pension. After all doesn’t the government get quite enough of our money?

Ray Best can help you protect your financial future. To find out more, simply click here!