We’re pleased to announce that we’ve been shortlisted for the Moneyfacts ‘Investment Adviser of the Year 2018’. Thank you to our team and clients for their support in achieving this recognition.
Meet the Team: Elliot Grant
Client Services Administrator Elliot tells us more about himself:
Q: What has been the journey that has led you to become a Client Services Administrator?
After leaving Sixth Form I decided to go back to college to train in Accounting & Finance. Whilst studying I was working as a Financial Administrator at a daycare nursery. After holding this position for 2 years I made the choice to seek another challenge; it was then that I found Citywide Financial Partners.
Q: What attracted you about working for Citywide Financial Partners?
The fresh challenge of diving into an industry that was new to me was exciting. From my own research I saw that Citywide were a company that focused on client care, and after the interview process I knew for sure that this was a company I would enjoy working for.
Q: We know you are a Client Services Administrator, but what does that mean on a day to day basis?
Day to day I work closely with the Financial Planners and Luke Beale, assisting within the Client Services team. The majority of my time is taken up with keeping our back office systems up-to-date and preparing the necessary documents for any client meetings.
Q: What do you find interesting about the work that you do?
For me, I find the fund analysis part of the role the most interesting, and also following our clients’ financial journeys through various stages of their lives.
Q: What are you saving for?
At this stage in my life, my focus is on taking the next step towards moving into a property with my partner.
Q: When you are not at Citywide Financial Partners, what keeps you busy?
Outside of Citywide I am a big fan of music, film and TV and a keen cinema-goer. Recently I have been putting a lot of time into my new favourite hobby, mountain biking.
Q: If you could give your younger self one piece of advice, what would it be?
I don’t feel I have any regrets, but if I was to meet my younger self I would probably tell him to not be so scared of failure.
Q: What is your proudest achievement in life so far?
My proudest achievement would have to be one of my most recent accomplishments – losing weight. I’ve found it incredibly tough, but at the same time very rewarding.
Q: And finally, what goals are you working towards now?
In my professional life, I am working towards my Certificate of Financial Planning and looking forward to continuing to develop within the team at Citywide Financial Partners. Personally, my goals are to continue with my weight loss and move in with my partner.
Planning ahead: How to maximise your tax allowance in the new 2018/19 financial year
The UK tax code is now more than 20,000 pages long, comprising over 1,000 tax reliefs and exemptions. At around 10 million words, it’s 12 times the length of the Bible.
It’s natural to be bewildered by tax planning, but it doesn’t have to be. When dealing with such a large body of rules and regulation, you simply need to know where to look.
We’ve just started a new UK tax year. That means there’s no better time to begin your tax allowance planning for 2018/19, with savings to be had for those who think ahead.
Here’s our guide to five key tax breaks you should consider over the next 12 months.
1. Maximise your ISA allowance
ISAs are a simple way to shelter your savings from taxes, allowing you to save up to £20,000-a-year for 2018/19.
This is what’s called the ISA allowance. You can put the full £20,000 into one ISA (like an investment ISA), or you can split it into different accounts.
Over time, this should mean you’ll accrue a large savings pot with many tax benefits. With an ISA, savers are charged no tax on profits, no capital gains tax, no tax on interest earned on bonds, and no tax on dividends.
Which ISA you choose depends on your appetite for risk. Cash ISAs and lifetime ISAs are straightforward, and you don’t pay tax on the interest you accrue.
The financial benefits of these first options could be substantially less than, for instance, an innovative finance ISA, which allows investors to lend to borrowers through regulated funding platforms, paying no tax on interest accrued.
The disadvantage of non-cash and non-lifetime ISAs? Greater risk for the investor. Which will you choose?
Further reading:
Full ISA Guide – Save without paying tax (via Money Saving Expert)
2. Review your pension arrangements
Pension schemes are another tax-efficient way to invest savings. The amount you can contribute to your pension annually while still receiving tax relief is capped, however.
The annual allowance, as it’s called, sits at £40,000-a-year. This applies across all the pension schemes you belong to. It’s not a ‘per scheme’ limit and includes all the contributions made by you and your employer.
If you exceed this limit, you won’t receive any tax relief, and you’ll pay an ‘annual allowance charge’ on any contributions exceeding £40,000. The excess is added to your taxable income for the year.
Further reading:
Guidance on the annual allowance limit (via The Pensions Advisory Service)
3. Beat the Dividend Allowance cut
The Dividend Allowance means you don’t have to pay tax on the first £2,000 of your dividend income. It is available to all taxpayers, no matter what amount of income you earn.
The allowance was reduced from £5,000 in April this year, and will mean a higher tax bill for directors of small businesses, investors, and others who earn dividends outside of stocks and shares ISAs.
However, holding dividend producing investments within a stocks and shares ISA can help to lessen the impact of these changes.
Up to £20,000 can be invested in a stocks and shares ISA this tax year by each individual aged 18 and above, and all income and gains are free of tax.
Further reading:
Dividend tax calculator 2018/19 (via Which)
How to beat the dividend allowance cut (via Your Money)
4. Think charitably
Charitable contributions mean a reduction in the amount of tax you pay because each is subject to tax relief.
To take advantage, you’ll need to keep a record of how much you’ve given to charity throughout the tax year. You can donate multiple ways, with cash being the most common. This way, higher-rate taxpayers can claim effective tax relief of 25%.
An often overlooked alternative to cash donation is offering shares, land or buildings to registered charities. Gifting assets directly – rather than selling first and then offering the sum raised – will incur no capital gains tax. What’s more, you can claim a deduction against your income for the value of the assets donated.
For a higher rate taxpayer, this means an effective income tax relief of 40%.
Further reading:
Tax implications on charitable donations (via Taxation)
5. Give to your family
The standard inheritance tax rate is 40% of anything over the £325,000 threshold. You might also reduce your tax bill by gifting money to your loved ones.
As long as you make the gift more than seven years before death, doing so will prove tax-free. The relief is tapered, too. Gifts made three to seven years before your death are taxed on a sliding scale.
There’s also a gift allowance of £3,000 per year. This is the maximum you can gift tax-free to your heirs while you’re still alive.
Further reading:
Gifts and exemptions from inheritance tax (via Money Advice Service)
The UK tax system is complex and ever-changing. But for individuals who plan ahead, there’s plenty of tax efficiency savings to benefit from.
It’s never too early to start. Tax efficiency and maximising the tax breaks on offer is vital to your family’s financial future. And remember: while some tax breaks can be carried over from year-to-year, others – like your ISA allowance – aren’t transferable. To make the most of them, consider your tax strategy today.
Meet the Team: David Smith
Financial Planner David tells us more about himself:
Q: What has been the journey that led you to becoming a Financial Planner?
My journey began in the early 90s working for an Italian insurance company in London. I gained experience over the years working in back office support roles with different firms while I gained my qualifications, eventually becoming a financial planner in 2004.
Q: What attracted you about working for Citywide Financial Partners?
I joined Citywide because I was attracted by the exceptional level of service and support that is provided to clients.
Q: We know you are a Financial Planner but what will that mean day to day?
The majority of my time is spent getting to know clients. Identifying their goals and aspirations, helping them to achieve these through building an effective financial planning strategy. Also, speaking to prospective new clients and professional connections about the services that Citywide offer.
Q: What do you find interesting about the work that you do?
I enjoy meeting clients and understanding more about their goals and aspirations. I also enjoy the analytical aspects of the role, including reviewing portfolio investment strategies.
Q: What are you saving for?
With a young family and a house extension project under way, my ability to save is compromised to some degree, although I am beginning to focus back on repaying the mortgage and saving towards retirement.
Q: When you are not at Citywide, what keeps you busy?
Outside of Citywide, the majority of my spare time is spent with my family. I make various attempts at keeping fit, usually running, and when I can find some spare time, I also enjoy flying light aircraft around the south east.
Q: If you could give your younger self one piece of advice, what would it be?
Don’t be afraid to fail.
Q: What is your proudest achievement in life so far?
The birth of my two daughters, a life changing event that continues to challenge and inspire me.
Q: And what goals are you working towards now?
Having just recently joined Citywide, my initial focus is on becoming an effective member of the team.
Sailing with the Tides
A mistake many inexperienced sailors make is not having a plan at all. They embark without a clear sense of their destination. And once they do decide, they often find themselves lost at sea in the wrong boat with inadequate provisions.
This piece is by Jim Parker, Vice President – Dimensional Fund Advisors (one of our investment partners).
Likewise, in planning an investment journey, you need to decide on your goal. A first step might be to consider whether the goal is realistic and achievable. For instance, while you may long to retire in the south of France, you may not be prepared to sacrifice your needs today to satisfy that distant desire.
Once you are set on a realistic destination, you need to ensure you have the right portfolio to get you there. Have you planned for multiple contingencies? What degree of “bad weather” can your plan withstand along the way?
Key to a successful voyage is a good navigator. A trusted adviser is like that, regularly taking coordinates and making adjustments, if necessary. If your circumstances change, the adviser may suggest you replot your course.
As with the weather at sea, markets can be unpredictable. A sudden squall can whip up waves of volatility, tides can shift, and strong currents can threaten to blow you off course. Like a seasoned sailor, an experienced adviser will work with the conditions.
Once the storm passes, you can pick up speed again. Just as a sturdy vessel will help you withstand most conditions at sea, a well-diversified portfolio can act as a bulwark against the sometimes tempestuous conditions in markets.
Circumnavigating the globe is not exciting every day. Patience is required with local customs and paperwork as you pull into different ports. Likewise, a lack of attention to costs and taxes is the enemy of many a long-term financial plan.
Distractions can also send investors, like sailors, off course. In the face of “hot” investment trends, it takes discipline not to veer from your chosen plan. Like the sirens of Greek mythology, media pundits can also be diverting, tempting you to change tack and act on news that is already priced in to markets.
A lack of flexibility is another impediment to a successful investment journey. If it doesn’t look as though you’ll make your destination in time, you may have to extend your voyage, take a different route to get there, or even moderate your goal.
The important point is that you become comfortable with the idea that uncertainty is inherent to the investment journey, just as it is with any sea voyage. That is why preparation and planning are so critical. While you can’t control every outcome, you can be prepared for the range of possibilities and understand that you have clear choices if things don’t go according to plan.
If you can’t live with the volatility, you can change your plan. If the goal looks unachievable, you can lower your sights. If it doesn’t look as if you’ll arrive on time, you can extend your journey.
Of course, not everyone’s journey is the same. Neither is everyone’s destination. We take different routes to different places, and we meet a range of challenges and opportunities along the way.
But for all of us, it’s critical that we are prepared for our journeys in the right vessel, keep our destinations in mind, stick with the plans, and have a trusted navigator to chart our courses and keep us on target.
RISKS
Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful.
Diversification neither assures a profit nor guarantees against loss in a declining market.
Written by Dimensional Fund Advisors Ltd. (DFAL), 20 Triton Street, Regent’s Place, London, NW1 3BF. DFAL is authorised and regulated by the Financial Conduct Authority (FCA). DFAL does not give financial advice. You are responsible for deciding whether an investment is suitable for your personal circumstances, and we recommend that a financial adviser helps you with that decision.
This document is provided for information purposes and intended for your use only. It does not constitute an invitation or offer to subscribe for or purchase any of the products or services mentioned. It is the responsibility of any persons wishing to make a purchase to inform themselves of and observe all applicable laws and regulations. Any entity responsible for forwarding this material to other parties takes responsibility for ensuring compliance with all financial promotion laws, rules and regulations. It is not intended to provide a sufficient basis on which to make an investment decision. Information and opinions presented in this material have been obtained or derived from sources believed by DFAL to be reliable, but DFAL makes no representation as to their accuracy or completeness. DFAL has reasonable grounds to believe that all factual information herein is true as at the date of this document. DFAL accepts no liability for loss arising from the use of this material.
DFAL issues information and materials in English and may also issue information and materials in certain other languages. The recipient’s continued acceptance of information and materials from DFAL will constitute the recipient’s consent to be provided with such information and materials, where relevant, in more than one language.
“Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services.
Key Points in the Chancellor’s Spring Statement
The Chancellor promised a Spring Statement devoid of mini-Budget trappings, and that is precisely what he delivered. He announced no new spending or tax measures, despite the Office for Budget Responsibility (OBR) providing a marginally more upbeat forecast. Instead Mr Hammond used his despatch box time to review the economy and launch no fewer than 13 consultations.
The highlights of the Spring Statement were:
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No new tax or spending initiatives were announced.
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Borrowing numbers turned out to be better than expected – which allowed the Chancellor to see ‘light at the end of the tunnel’. Public sector net debt (projected to be £1,783 billion at the end of 2017/18) is now predicted to fall as a percentage of the economy, although in absolute terms it will continue the march towards debt of £2 trillion.
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The next revaluation of business property in England will be brought forward one year to 2021; but ‘at this stage’ the government will not introduce self-assessment. A summary of responses to an earlier consultation document on three-yearly revaluations was published alongside the Spring Statement.
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A ‘position paper’ on corporate tax and the digital economy represented the latest government thinking on how to address the taxation of the internet economy’s elusive profits.
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A consultation paper was issued on allowing entrepreneurs’ relief in circumstances where it would otherwise be lost because of a new share issue.
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There was a call for evidence on the design of the VAT registration threshold and whether a revised structure could offer more incentives for small businesses to grow.
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There was a consultation on the extension of tax relief for self-funded work-related training by employees and the self-employed.
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There was a consultation on the extension from April 2019 of the existing security deposit regime to include Corporation Tax and Construction Industry Scheme deductions.
The raft of consultations will potentially mean that, after the content-light Spring Statement, the Autumn Budget will be a more impactful fiscal event.
To view the full report click here.
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