Archive for the ‘Latest News’ Category

11.03
2011

Do the Greeks know which side their (pita) bread is buttered?

It was clear to us that there were always likely to be further hiccups following last week’s Euro Debt Agreement. If the naivety of asking the Chinese to contribute after having effectively announced that Europe would be dependent upon them to do so wasn’t enough to cause jitters, the Greek PM has clearly caught everyone (including Merkel & Sarkozy) by surprise with his decision to seek a referendum. The markets reacted badly to the uncertainty (as they always do) and there is a very real possibility of the debt deal falling apart. The fact that there is open talk of the Greeks leaving the Euro tells you the severity of the situation.

From an investment perspective, it is always important to look beyond the hyperbole, and of course making sure we are not making knee-jerk reactions that are in any case one day too late! Our assessment this morning draws on one telling piece on the news last night; four Greek citizens were interviewed and asked if they were in agreement with last week’s debt deal and they were all vehemently against it, and the austerity measures, and would definitely vote against them in a referendum. When the same people were then asked if they wanted to leave the Euro, they all equally strongly stated ‘no’.

Whether the referendum goes ahead or not, we do not know, but if it does we suspect by then the question will be whether the people wish to remain in the Euro or not. This being the case, we think the Greeks on the street understand which side their (pita) bread is buttered.

Posted by Ian on 11.03.2011

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03.24
2011

Yesterday’s Budget: what it means for you

Continuing on from the theme of our tax seminars last week, and in the interest of keeping you informed of changes and how the affect you, we thought we’d provide a summary of yesterday’s budget.

Budget Highlights

Individuals

  • Personal Allowance: The basic personal allowance for individuals, where available, will increase to £8,105 for the 2012/13 tax year (already set at £7,475 for the forthcoming 2011/12 tax year).
  • Capital Gains Tax (CGT): The annual CGT exemption will increase by £500 to £10,600 for 2011/12.
  • Enterprise Investment Schemes (EIS): Income tax relief for investment in EIS companies is to be increased from 20% to 30% from 6 April 2011.  Furthermore, the maximum amount that may be invested in one tax year is to be increased to £1,000,000 with effect from 6 April 2012 (currently £500,000).
  • Charitable giving will be further encouraged by simplifications to the Gift Aid scheme and, from 6 April 2012, by a reduction in the inheritance tax payable by estates where 10% or more is left to charity.
  • The inheritance tax nil rate band will be frozen at its current rate of £325,000 until April 2015.
  • The Approved (car) Mileage Allowance Payments (AMAPs) will increase by 5p to 45p per mile from 6 April 2011, for mileage up to 10,000 per year.  The rate will remain at 25p per mile for annual mileage over that level.
  • Continuing a regular theme from recent Budgets, further targeted reviews of tax avoidance are to be undertaken, and specific legislation introduced.  The Government’s views have been summarised in an important document published today entitled “Tackling Tax Avoidance”.

Source: flickr - vulture labs

Non-Domiciles

  • The Remittance Basis Charge (RBC), for resident, non-domiciled individuals who wish to be taxed on only foreign income and gains brought to the UK, will be increased to £50,000 for those resident here for twelve years or more.  The RBC will remain at £30,000 for those resident for at least seven years, but less than twelve.   This is expected to take effect from 6 April 2012, but will be confirmed following a consultation period to begin in June 2011.
  • A tax charge will no longer arise where a non-domiciled individual remits overseas income or gains for the purposes of commercial investment in a UK business.  This is again likely to take effect from 6 April 2012.
  • A consultation exercise is to be undertaken to consider the introduction of a statutory residence test for tax purposes, with a view to providing clarity for taxpayers.

Corporate

  • Entrepreneurs Relief: The lifetime CGT Entrepreneurs’ Relief limit will be increased from £5,000,000 to £10,000,000 with effect from 6 April 2011.
  • Corporation Tax: The main rate of corporation tax, currently 28%, will reduce to 26% with effect from April 2011, and then by 1% each year thereafter, down to 23% by 2014.  As previously announced, the small profits rate will reduce by 1% to 20% from April 2011.
  • Amalgamation of Tax and National Insurance: A further, and more detailed consultation is to be undertaken on the amalgamation of the tax and national insurance regimes.
  • To encourage businesses to use ultra low carbon cars, company car tax will be frozen from April 2013 for cars emitting less than 95g/km. Tax charges for vehicles emitting in excess of this will continue to rise by 1 percentage point from the same date.
  • Twenty-one new Enterprise Zones, with specific, detailed tax breaks available, are to be created.

 

The above lists are of course, far from exhaustive and based on the information so far available.  As ever, further details will only emerge over the coming weeks as the Finance Bill passes through Parliament, but we hope this is a useful starting point.  Please get in touch if you have any queries or would like additional information.

Posted by Fish on 03.24.2011

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03.09
2011

Seminar: Take Advantage of the Tax Changes

The tax year-end is always important due to the various tax allowances and reliefs that are available. This year in particular there are serious changes to the pension landscape you need to be aware of.

The headline change is that tax relief at your highest marginal rate will be allowed up to £50,000 p.a. from April 6th however if you’re a higher-rate tax payer and take appropriate action before tax year-end, you can benefit even more.

The complications of the current year ‘anti-forestalling’ £20,000 contribution limitation, as well as the removal of the personal allowance above £100,000 and a 50% tax rate above £150,000 mean that it would be wise to find out what you can do sooner rather than later. Obtaining 50% tax relief is akin to receiving a 50% discount on your investments!

To explain the changes and what they mean for you, we’re hosting two tax and investment seminars at The Gherkin on Tuesday 15th March and Thursday 17th March. At each event we will share a number of planning opportunities for higher rate tax payers, as well as investment ideas and a superior insurance proposition for your properties.  

Places are strictly limited. Please RSVP to a.roberts@abusinessinnovation.com at your earliest to secure your place.

Below is a copy of the invite:

Our last event about the budget changes and implications for your tax bill was a hit. The feedback from attendees was really positive:

“Increase the frequency of your events…”

“Great venue!”

“Perfectly timed and informative…”

Abbie, our Head of Marketing, snapped a couple of shots of the event and the view from The Gherkin.

 

We hope to see you there!

Posted by Ian on 03.09.2011

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03.03
2011

Wiping the Slate

Followers of natural history may be familiar with the K-T boundary. Around 65.5m years ago some 75% of all species on earth disappeared. Amongst them were some of the largest and most highly specialised (not to mention successful) creatures ever to have existed - the dinosaurs. They had evolved over 160 million years to fill every conceivable biological niche and by comparison, our own antecedents were tiny creatures scurrying about in the dark and doing their best to avoid becoming someone else’s dinner!

Source: flickr - desdeaqui

The cause of the extinction? Well, current evidence suggests that a huge asteroid - so large that the top of it was still in outer space when the bottom struck the earth - was responsible. It was travelling at roughly 20 times the speed of a rifle bullet and released more than 1 billion times the energy of the bombs that destroyed Hiroshima and Nagasaki. Enough to ruin your whole day.

Since then our tiny ancestors have evolved into every type of mammal we see today from the dormouse to the blue whale (and of course, us) to fill once again, every biological niche.

And the relevance of all this? Well, two things:

  1. The UK Financial Services Industry may well come to look upon 31st December 2012 as its own K-T Boundary Extinction Level Event. A good number of highly specialised firms (large and small) are not going to survive the impact of the FSA’s Retail Distribution Review. They have evolved to thrive in the sales/commission driven world of the past 30 years and they lack the adaptability to survive in the new environment that is coming.
  2. Initially this will have a negative impact - first on the number of people qualified and authorised to give financial advice to the public and second on that very public who are faced with a more bewildering than ever array of financial decisions to make. The need for good quality advice has never been greater.

However, the K-T extinction event shows that where nature creates a vacuum something new will evolve to fill the gap. In this case, the FSA seems intent to wipe the slate clean. Many are taking this personally but it does begin to look and feel like an act of nature! There are already a number of great firms out there ready to take on the challenge. For those firms, their current and future clients, the future seems brighter than ever. For the rest? Maybe a footnote in the financial palaeontologist’s yearbook?

Posted by Clifford on 03.03.2011

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01.06
2011

Play for Now, Plan for the Future

We have recently started working with a number of professional sports people, helping them to maximise their current earnings and successfully plan for the future. This post outlines exactly how we are helping them. If you find yourself in a similar situation, or need advice, please get in touch.

Source: flickr Tim Goodill

Whether you favour the round or oval ball, a pair of whites or indeed a whip, a professional sports career is an exciting one where dreams can come true and fortunes made. You may already be on your way to being the next Wayne, Jonny, Freddie or Frankie, but more realistically you are likely to enjoy a 10-15 year career in or around the top flight of your sport. 

Either route will realise some financial truths;

1)      You will be earning significant sums of money, in excess of your daily living needs

2)      Your extreme earning potential will last for a relatively short period of time

3)      Unless you develop other skills, you will be retired for 50 years!

In simple terms, how much should you save now to secure your financial future once you stop playing? Do you have a financial plan? Many of your predecessors did not, and frittered away money in the good days and/or over-estimated their ability to earn decent money in their second career.

The term “break a leg” may be a good luck message for aspiring actors, but for professional sportsmen it can be a nightmare scenario. Forget even being a journeyman professional, a bad injury can easily end your career prematurely – next week, next year, in 5 years’ time? Of course no one wants to contemplate such a scenario, but it is our job to help you plan for every eventuality.

Let’s be frank; it need not be a career threatening injury. You may be invincible at the moment but a loss of form, a new manager, an influx of foreign talent, or just the next generation of whiz kids, can mean you no longer making the 1st team or not getting the top rides. Such a scenario happens all the time unfortunately, and will also have an adverse impact on your earning potential.

Good quality financial advice is not about ‘selling’ you high risk investments for big commissions. We believe you take enough risk in your day job. We wish to develop long term relationships to help you secure your financial future – imagine the peace of mind knowing that you have a plan that will provide sufficient income for you and your family for life.

Please contact us for a ‘no cost, no obligation’ initial meeting.

Posted by Clifford on 01.06.2011

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12.09
2010

Investment Matters: Hot Off the Press

We’ve just released our quarterly newsletter Investment Matters.

Here’s a snippet from the Market Overview:

The world remains a dark and dangerous place for the unwary investor in 2010. Many traditionally secure investment asset classes have continued to demonstrate levels of volatility that do not support their “secure” status and the need for continual vigilance has never been greater.

The big story of recent weeks has of course been the Irish Govern­ment bailout. The Butterfly Effect has ensured that the problems of this tiny nation of 4.5m people have rippled around world stock markets causing substantial sell-offs in Europe, the UK, America and further afield. The real fear is that what started in Greece and has spread to Ireland will not stop there. If Portugal or the much larger economies of Italy and Spain require a bailout the cost will be on an altogether different scale and maybe unaffordable even to the European economic superpowers?

In the meantime, another round of Quantitative Easing (Q.E.) from Mr Bernanke and the US Federal Reserve as they continue to try to spend their way out of the recession has buoyed up equity markets but achieved little else. Money intended for small businesses has been used instead to prop up bank balance sheets and buy shares and as a result equity markets remain somewhere near to their 12 month highs. As long as the European debt crisis can be held at arm’s length equity markets may continue to defy gravity. With QE propping up the markets and European Debt dragging them down, they begin to look like a driver with one foot on the accelerator and the other on the brake. They continue to steer the car and toot the horn as they career downhill and consequently the potential for an accident remains high.

To download our latest Investment Matters newsletter click here.

Posted by Fish on 12.09.2010

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11.01
2010

All That Glitters?

With so much talk of potential devaluation of major currencies through Quantitative Easing (QE), we need to find alternative investments that cannot be devalued by fiscal policies, and so have asked our new recruit to the Fish Investment Analyst Team for his views; Dean Morris is a Certified Financial Planner based in South Africa and we refer to him as our “Walking Encyclopaedia”; he admits to having read over 150 books on economics, tax, psychology, history, energy and geopolitics!

Q: Do you think Gold is undervalued, fair value, or overvalued ? 

Definitely undervalued. None of the major currencies have an intrinsic value as they once did when they were linked to a gold standard. As a result their ‘store of value’ is questionable because the supply of these currencies is adaptable to the needs of the monetary authorities. We are used to the hyper-inflation/devaluation stories of third world countries but the recent QE experiments in the US and UK demonstrates the flexibility and risks of printing presses.

I believe all “fiat” currencies, as they are called, are vastly overvalued compared to gold, and the investing public will be clamouring to get in to gold. Remember also that there are now 3 billion people in Asia who now have access to funds (unlike in the 1970s gold bull run) and these people don’t share the predominant western view that gold is an old relic. 

Source: flickr- Rodrigo Marin

Q: Do you prefer physical gold or a basket of gold mining stocks ?

Both. They are very different animals. Bullion itself will provide you with relatively safe storage of value (relative to ALL fiat currencies). The gold price can move 30% in a short space of time, so those investing in gold must be aware of such moves; individuals must be emotionally prepared to deal with that kind of volatility. Exchange Traded Funds (ETFs) are the most practical way to obtain exposure to physical gold but care must be taken to understand the different types of ETFs.

Gold stocks represent a proxy multiplier to gold. The largest input cost into a gold mine is energy, so when the gold price moves up and settles on a new average price, the additional revenue can far outrun the increase in input costs. However, they are stocks and subject to the same risks as other stocks.

Gold stocks chosen on an individual basis can lead to major loss of capital. Thus, unless you have both the time and inclination to investigate the fundamentals of individual stocks, a gold mining focused mutual fund is probably the safest option.

 
Q: How long do you think this bull market will go on for?

Another 5 years, minimum. Looking at the history of bull markets, they usually last for 17 to 25 years. This gold bull market started in 2000, so as of now (2010) we’re probably at or just over the halfway mark in time, and much lower in terms of returns. I believe the exponential stage of price rises still lies ahead.

 
Q: What price target would you place on gold and why ?

Higher, much higher, compared to all currencies. I’d say conservatively, US$4000/oz. Too much more Quantitative Easing along with the public becoming aware of the declining value of their ‘money’ and it could be multiples of where it is today.

Posted by Fish on 11.01.2010

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08.11
2010

Insurance Should Play a Key Part in Your Asset Planning

We give a lot of thought to protecting the value of our financial assets.   But do we give as much attention to our tangible assets – homes, cars, collections – which are often worth far more.

Possibly we assume that standard insurance will be enough, without realising the pitfalls.

Unfortunately, most home and car insurance is based on a ‘one-size-fits-all’ policy with small print restricting the claims and sums the insurer will pay.  So, if you own a higher-value home or car, you could find – usually when you make a claim – that you’re not fully covered.

 

To heap insult on injury – regardless of the service they provide – standard brokers not only take a standard commission, but also often obtain further hidden income from your premium.

But, owning a higher-value home or car doesn’t have to mean resigning yourself to insufficient cover and excessive premiums.  Symmetry is a private broker that specialises in the personal insurance needs of discerning clients with more to protect. We have recently strategically partnered with Symmetry to provide insurance services to our wealthy clients.

Their guiding belief is that good insurance is about balance, fairness and equity … symmetry.   They offer a truly personal service with:
Fairer cover – their initial home appraisal means they match your cover to your precise needs, with almost no restrictive conditions.  They will also advise on loss prevention, security and collection management.  So you can be certain you are properly protected, but paying only for what you really need. 
Fairer claims – their claim service is consistently rated the best in the UK.   After a loss, they ensure you have the choice of cash or replacement/ repair using a supplier you nominate.  Non-complex claims are usually paid within two days of notification.
Fairer charges – they return the commission other brokers keep and charge you only for the service level you have chosen.
Talk to Chris Tully on 01252 560 550 or email chris.tully@symmetrypi.com. 

Posted by Fish on 08.11.2010

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07.26
2010

Club Tropicana Drinks Are Free…

European Debt Crisis - Restoring confidence - is there such thing as a free drink?

Confidence in the European banking world has been a little shaky of late. The “Club Tropicana” countries of Portugal, Italy, Greece and Spain have been living the high life in recent years and it turns out that the party has been largely fuelled by loans from European banks. These banks are positively awash with exposure to southern European debt (private and sovereign) and the major European powers, it seems, will do almost anything to keep the party going for fear of what happens when the music stops.

Despite the reassuring words of Wham, the drinks at these parties very rarely turn out to be free (although rumour has it, Greece really did get in with just a smile!). The only real question is who ends up with the tab?

The latest effort to restore confidence was at best a compromise. Bank stress tests that are too weak reassure no one. But stress tests that are failed by everyone are hardly reassuring! In this sense, last weeks tests were probably pitched about right. Only seven of 91 banks tested missed the cut and none of them was a big name. So far so good.

The truth is that the stress tests were just not very stressful and as a result do not tell us too much about how they all will cope if the wind really does start to blow

The result is an extension for now, but we still feel that this represents a denial and postponement not a solution.  A double dip recession remains a distinct possibility.

We are therefore adding some sun cream to our earlier sticking plaster metaphor as there is a real danger that unwary investors could get burned. Factor 50 on standby!

Posted by David on 07.26.2010

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07.08
2010

On The Road To Financial Freedom, But Doing It The Hard Way?

Are you on the road to financial freedom, but doing it the hard way? What does the latest budget mean for your tax bill? Find out at our seminar tonight at The Gherkin.

We have a couple of spaces left, so please email abbietanner@abusinessinnovation.com if you’d like to attend.

We hope to see you there!

Invitation – July 8th – The Gherkin (PDF – 517KB)

Posted by Fish on 07.08.2010

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