We believe “Treating our Customers’ Fairly” by having a traditional ‘face to face’ no obligation friendly discussion where possible either at home or another suitable location so that we can really get to know what our clients require. We continue to invest in “state of the art” research systems to ensure that we can offer our clients the very best investment products available in the market place
RTP has been built on reputation and whatever the type of investment advice that is required it pays to take advantage of our professional independent financial advice and in accordance with all of our services, the initial consultation is absolutely free and without obligation. Unlike many professionals we have a service, which costs you nothing initially, but may increase your investments or perhaps save you thousands of pounds in tax.

ISA Investment

ISA’s (Individual Savings Accounts) were set up by the government in April 1999 initially for a 10 year period, to help UK residents obtain access to a broad range of investment products within a tax free environment now often referred to as a ‘’tax wrapper’’.

Normally a person has to be a UK Resident for tax purposes and aged 18 or over to invest into an ISA. Any ISA must be owned by an individual as there are no joint ISA’ s, or ISA’s held on behalf of others, but investors can save into an ISA and give the proceeds to another at a future date. Monies can be saved regularly, or by investing lump sums, or a combination of the two, as long as the limits are not exceeded. Transfers between ISA companies is also allowed under certain circumstances

There are many kinds of ISA’s to choose from in the market, cash, equities, corporate bonds, Investment Trusts, Single Company or specially constructed investment portfolios to name a few, however for any taxpayer or non-taxpayer then this is one investment that should be seriously considered as the tax breaks alone make these kinds investment potentially worthwhile.
There are two main types of ISA available for investors, the Mini and the Maxi ISA. During any single tax year there are the options ie two Mini ISA’s (up to £3,000 in a Cash ISA and up to £4,000 in a Stocks and Shares ISA) or one Maxi ISA (up to £7,000, made up of shares and up to £3,000 of cash). The ISA annual subscription limits are being increased from the 6th April 2008 to cash ISA’s £3,600 per tax year and stocks and shares ISA’s to £7,200 per tax year. Subject to an overall limit of £7,200 on both ISA’s

Charges And CAT Standards:
ISA Fund or Plan managers can impose any terms or charges that they like (as they can with any investment), but those that meet certain criteria laid down by the Government for low Charges, Easy Access and Fair Terms can claim to meet the CAT Standards. However this can have disadvantages such as limiting the options or fund choices available to the Manager.

Tax Aspects:
There is no income tax on any income, or capital gains tax on any gains so nothing needs to be declared to the Inland Revenue

Personal Equity Plans (Peps)
Just because PEP’s are no longer available as they have been replaced by ISA they should not be ignored. Many thousands of investors have Peps or PEP portfolios and the rules now allow the merging of a general and a single company PEP along with the ability of spreading holdings between a number of different managers. It has now become possible to transfer part of a PEP to another manager similar to an ISA.

Unit Trust / OEICS

There is a vast selection of Unit Trusts available from many thousands of companies providing a wide and varied selection of investment opportunities across all of the worlds investment sectors. Unit Trusts are a “collective investment”, which means that many investors’ investments are “pooled” into one large fund and this allows the individual investor to share in the assets of the fund. Therefore with the investment spread over a number of companies enabling the investor to have a wide spread of investments within one fund and this has the effect of spreading the risk, unlike having a share in one company. Unit Trusts offer the potential for income and or capital growth both from Stock Market or some none Equity backed investments. However it is always recommended that before placing any investment that professional advice is taken to ensure that all features and benefits are explained jargon free.

Investment Bonds

Investment Bonds are single-premium investment contracts issued by Life Insurance Companies and one of the oldest types of single premium investment. They are non-qualifying or taxable Life Assurance policies, which are designed to give your money stock market growth prospects, through managed and pooled investments.
The Bond itself is just a framework or a wrapper where money is actually invested in funds of the investor’s choice and looked after by expert fund Managers thereby spreading investment risk. They can be written on a single, joint, or multi-life basis making them very flexible

Open Ended Investments Companies
An Open Ended Investment Company (OEIC) is one of the simplest and most flexible ways to invest in global or UK stock markets and other investment classes. OEIC’s are very similar to Unit Trusts except that an OEIC is legally constituted as a limited company (PLC) and most OEIC ‘s operate an ‘umbrella’ structure allowing numerous sub-funds to invest in different types of assets, in line with their investment range so the investor can switch easily between different investment funds. In addition an OEIC unlike a Unit Trust has no bid/offer spread meaning that investors and sellers get the same single price. Any investor can invest an unlimited amount into this area

Investment Trusts
Investment trusts are Companies quoted on the stock market, which buy and sell other Companies' shares. Shares in investment trusts are bought and sold through a Stockbroker and earn dividends, and these are subject to income tax and capital gains and, when selling, returns are subject to Capital Gains Tax. The Trust size will depend on the value of the share capital and therefore are generally much smaller than a Unit Trust fund and could be more volatile

Investment Funds
The Investment Bond ‘wrapper’ can contain virtually all types and classes of the more modern and versatile unit-linked investments. This includes, providers now using multi-manager and external funds links for investments ranging from low risk to high-risk funds.

Bond Taxation
One of the main advantages of Investment Bonds is that capital may be withdrawn on a regular basis either monthly, quarterly, half-yearly, annually or on an ad-hoc basis. However unlike some other investments there is no immediate income tax to be paid from the investment, because it is a return of capital, and lasts until 100% of their initial investment has been repaid (i.e. 5%pa paid for 20 years)
This capital withdrawal facility can be quite often ‘rolled up’ if not used and can be taken later. Care must be taken, as there may be an income tax charge, if the investor becomes a higher rate taxpayer or if the gain results in becoming a higher rate taxpayer. If the investor is nearing retirement age then care should be taken to ensure that any gains do not affect age allowances.

Other Benefits

Bonds also provides life assurance protection with a lump sum benefit of 101% of the value of units, or the value of the bond if this is higher, becoming payable on the death of the life assured. Because the investment is classed as ‘life assurance’ it means that this type of investment may be placed into a Trust arrangement either initially or possibly later. This could therefore provide any nominated beneficiary with the proceeds from the Bond without the need for the Bond to be considered as part of the investors estate, (see IHT section) depending on time frames and the type of Trust used, and as long as this is effective under the Inland Revenue Rules. This investment class is therefore an invaluable tool for Inheritance Tax mitigation for those with potential Inheritance Tax liabilities.

Offshore Investment Bonds
Offshore Bonds are usually offered by UK Life Companies or their subsidiaries based from the Isle of Man, Channel Islands or Luxembourg and are generally available to all UK and non-UK residents. The distinct advantage of Offshore Bonds is that they grow generally free of UK Tax (known as Gross Roll Up) The only tax that this type of bond pays is a nominal amount to the Country where it is based and it can offer a significant increase in fund performance and values over the long term resulting in that it may outperform its UK ‘onshore’ counterpart. Charges on Offshore Bonds are in most cases more expensive which as a result can reduce the value of any tax advantages.
Many investors in the past have thought that investing offshore was tax free however this has never been the case because on the final encashment or surrender of these Bonds it may, depending on personal circumstances, lead to a tax charge at 10%, 22% or even 40%, as any gain is ‘’Top Sliced’’ and added to the Investors income. This means that if and when a tax charge is levied it could affect age allowances similar to Onshore Bonds. The other rules of Investment Bonds apply to any Offshore Bonds as Trust Planning Multi-life applications and wide investment choices are available from all provider companies similar to Onshore Bonds.
Investing offshore can be confusing as there are a number of issues that need to be considered therefore it is important to seek independent financial advice as there can be higher charges associated with investing offshore.

Distribution Bonds
Distribution Bonds normally have a slightly lower risk profile, as they invest mainly into income producing investments, and normally, but not always, the investment funds chosen are considered to be conservative such as investing into Corporate Bonds or Equity Income, but as they do have some exposure to equities depending on the provider, this means that values can go down as well as up
They distribute income usually twice a year regardless of the outstanding capital value, therefore if the income taken exceeds the dividends, then capital may be lost particularly over the short term. Investors can vary or increase the number of distributions by withdrawals of capital to provide regular income if required.
These bonds have become extremely successful over the years for clients wishing to take an income and also to have some potential for long-term capital growth

Corporate Bonds
These are loans to a Company, Government or a Local Authority where generally, interest is paid to the investor as the lender, and the amount of the loan is repaid at the end of the term (usually ten years or less). They can also be known as loan stock, fixed interest, debt securities gilts or corporate bonds. Insurance Companies have Corporate Bond Funds where thousands of these types of Bonds are held with the main benefit being the provision of a regular stable income. They are not generally designed to provide capital growth and the downside maybe the default ratio of companies not able to repay their debt by way of interest.

Guaranteed Bonds
This type of investment is not so popular these days with interest rates falling particularly over the last 10 years, Guaranteed Bonds are single premium investment contracts. The insurance company guarantees either to pay a predetermined fixed sum within a period of normally 4, 5 or 6 years time frame, or an income at a guaranteed rate of interest for the duration of the bond. These contracts then return the original capital on a specified maturity date.

Other Investments

Government Gilts
'Gilts' are classed as Government Stock where investors have made a loan to the Government as in Corporate Bonds. The national debt is comprised predominately of Government Gilts, so whenever Government issues any new Gilt they are simply raising more money.

Guaranteed Stock Market or Structured investments
These generally work in various ways and have become very popular over the last few years because of the volatility within the Stock market overall. The lower risk versions have been introduced in connection with bank and building society accounts. These work where clients are promised a certain percentage of growth in an index for example the FT-SE 100 and possibly a return of the original capital, even if the index falls depending on the provider company and the tranche of the Bond. They are also normally invested for a set period of time with no surrender before the maturity date so care must be taken before investing.

Venture Capital Trusts
VCT’s are companies listed on the London Stock Exchange, and are similar to investment trusts. They are run by fund managers who are usually members of larger investment groups. Investors can subscribe for, or buy, shares in a VCT, which invests in smaller trading companies, providing them with funds to help them develop and grow. At least 70% of the portfolio of a VCT must be in unquoted companies or companies listed on the Alternative Investment Market or Ofex exchanges.


Regular Savings and Education Funding

Many regular savings schemes have been around for many years and normally investors who have anticipated a future need or expenditure, for a particular purpose have used these very successfully. They are frequently used to build up the capital required for Private Education, University attendance and it’s associated costs, or even just to provide a nest egg for retirement.

Types of Regular Savings Schemes include:

• Regular ISA and Unit Trust plans
• Friendly Society schemes
• Long-term Endowments
• Bank and Building society accounts
• Children’s Bonds

National Savings products
These are some of the less risky investment options, which are offered by National Savings, where monies are raised for the UK Government. Returns are usually lower overall however they are also classed as low risk.

Risk warnings
What must be remembered when considering any investment is that all equity-based investment vehicles are intended as medium to long-term investments, which is considered to be five years or more. As equity-based investments they depend on stock market fluctuations, which can fall as well as rise. RTP always encourage their clients to be prudent tax planners and always review their portfolios on a very regular basis to ensure that they mitigate any potential future unnecessary tax payments.
In summary because there is such a wide range of funds and types of Investment available let RTP evaluate all the advantages and disadvantages before you take the decision to invest or not. The investments referred to on this website may not be suitable for all investors and does not constitute financial or tax advice at this time

Advisers within RTP are Independent Financial Advisers, and this means that they can, and do, offer impartial unbiased advice on all products and investment vehicles

Contact RTP for an informal discussion and specific advice


Inheritance Tax

What is Inheritance Tax?
This is a tax, which could be imposed on the value of an Estate when the remaining spouse dies depending on the overall value of all of the assets within that Estate.
It was previously known as Estate Duty or Capital Transfer Tax but the devastating effect remains the same. Families have built up wealth over a period of time yet this tax can be levied thus depriving their dependents in some cases of a lifetime of savings.

Rate of IHT Tax
The current level of IHT is charged at 40% on death, and at 20% on certain lifetime transfers. The first £300,000 is charged at a nil rate unless there is a transfer to a spouse who is not domiciled in the UK, when the limit is £55,000.
Where someone making a lifetime gift dies within seven years of making that gift, IHT may be due depending on the time between the gift and the date of death.

Gifts with reservation
Care must be taken in respect of an asset that a person has given away as it may still be treated as forming part of the donor's estate on death, if he or she has retained a benefit in the asset. An example is where a donor makes a gift of property but then continues to live in it rent-free, or possibly an investment through certain types of trusts where the Donor still has access to the capital

Who has to pay the tax?
As the tax falls due on the death of the individual, if single, or the remaining spouse the people who find themselves with this problem are the beneficiaries of the Estate, which are normally the children or grandchildren. So therefore the people to whom the parents would like to leave their money as a final legacy, may also inherit a significant tax bill from the Capital Taxes Office.

What is included?
An Estate will include everything owned in the individual’s name; the share of anything owned jointly; gifts from which they retain some benefit, such as a home given to a son or daughter but still lived in by the parent; and assets held in trust from which they receive an income.
Against this total value is set everything that the deceased person owed, such as, any outstanding mortgages or loans, unpaid bills, and costs incurred during their lifetime for which bills have not been received, as well as funeral expenses.

When the tax must be paid
Normally, IHT must be paid within six months from the end of the month in which the death occurs and if not, interest is charged on the unpaid amount. Although IHT on some assets, including land and buildings, can be deferred and paid in instalments over a period of 10 years. Though if the asset in question, is sold before all the instalments have been paid the outstanding amount will fall due immediately.

Avoiding or Mitigation of IHT
IHT is a voluntary tax and avoiding Inheritance Tax is certainly not illegal at all, there are a number of ways to quickly reduce any potential liability, perfectly acceptable to the Capital Taxes Office with each one having advantages and disadvantages. This is often referred to as Estate Planning and may involve different methods to reduce, cap or mitigate it altogether.

How do we do this?
There is no ‘one size fits all’ and different methods and processes are better for some Clients than others

• Making use of the Will Trusts and the Nil Rate Band exemption
• Using Trusts, Offshore Trusts & Inheritance Trusts
• Considering Gifts or Potentially Exempt Transfers under the 7 year rule and/or Gifts from Income
• Using Insurances /Trusts for protection
• Possible Equity Release /Lifetime Mortgages for funding (only when required)

Some trusts such as Offshore Trusts also have the advantage of deferring taxation for long periods of time however this may also create further capital gains within the trust itself.

Gifts that are exempt
Some cash gifts are exempt from tax regardless of the seven-year rule. They include: wedding gifts of up to £5,000 to each child; Wedding gifts of £2,500 to each grandchild, and wedding gifts of £1,000 to anyone else; other gifts of up to £3,000 a year (plus any unused balance of £3,000 from the previous tax year); gifts of up to £250 each to any number of people each year; gifts to charities, the National Trust, national museums, the main political parties and most registered housing associations.
Regular gifts paid after-tax income, such as a monthly payment to a family member, are also exempt as long as the giver still has sufficient income to maintain their standard of living.
Any gifts between husbands and wives are exempt from IHT whether they were made while they were both still living and left to the surviving spouse. Tax will be due eventually when the surviving spouse dies if the value of their estate is more than the tax threshold.

Summary
Although we do realise that not all areas are appropriate to all clients, please bear in mind that they may be of significant benefit to your children, grandchildren or beneficiaries, who at the end of the day are always the ones who will benefit from efficient and successful Inheritance Tax planning.
Planning in advance is important for many reasons - in particular gifted assets still retain a possible liability for seven years.
This is why, as part of our service, we undertake to provide regular reviews for our clients, to ensure that the implications of any changes in legislation can be fully taken into account in any required alterations are made to an existing strategy.
As advisers, our priority is always to our clients, it is your hard earned wealth and we will not put your position at risk simply to reduce a potential liability to this tax.

Do not delay contact RTP today and see how much we can save you – can you afford not to?