Brian Radbone and Robert Noble-Warren, CTA, FCSI spoke to the theme of fine tuning the portfolio for tax, raising some surprising results.
Brian - whose updated slides from Transact are below - started by explaining that far fewer assets now paid interest with deduction of tax, and therefore the impact of tax upon customers would be that much more obvious. He took us through the seven stage process of the income tax computation, and then into the personal allowance, the savings allowance, the savings rate, the dividend allowance and the pension annual allowance charge. Demonstrating that more income tended to reduce allowances, he showed that the tax burden for higher rate taxpayers was moving up.
Download Brian's presentation file
Robert commenced with a review of recent Ombudsman complaints in connection with tax and suggested that there was good reason to be explicit about which analyses were not being undertaken, and that a blanket "we are not acting as your tax adviser" might well be insufficient. He then applied a cost benefit analysis to three different tax saving techniques. The first was the annual bed and ISA tactic to pick up the annual CGT allowance, usually recommended as always useful. But since the extra charges would lower the future value of the portfolio, Robert explained that in practice, for many individual situations, the Bed and ISA was not worthwhile. He then applied the same cost/benefit to rearranging sectors of the portfolio between the ISA and the dealing account for less tax, using computer algorithms, showing that a swift answer was possible.
Our next talk is on 24 April and looks at attempting to define which sectors of the UK economy are likely to grow faster than others, by looking at the Bank of England's recent data for investment by sector, and productivity by sector. Once again, we welcome Dona Kehoe from the Bank of England to open, and Phil Robotham to talk about how to interpret the figures we have just heard.
[ Please note! The next event is in Plymouth, Boringdon Hall.
Click here to book your place for our 24 April event. ]