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Rishi Sunak Delivered His Much Awaited Budget Speech

Rishi Sunak Delivered His Much Awaited Budget Speech

Rishi Sunak delivered his much awaited Budget speech earlier today. It is probably fair to say this is one of the most highly anticipated of all budgets due to the current global pandemic. Speculation beforehand asked whether The Chancellor was going to now take the opportunity to raise taxes to repay some of the £270.6bn* borrowed to fund the pandemic response, or whether now was not the time and to try and pump further into the economy to stimulate some form of economic growth off the back of England’s Coronavirus roadmap.

We have been inundated with ‘hushed’ rumours of Stamp Duty and Furlough extensions which many say had already set the tone for this budget. Just yesterday the suspicions of the extension of the furlough scheme were confirmed with the scheme being extended until September 2021. But did the rest of the budget follow suit?

The team at AWM eagerly listened in this afternoon, and below we have summarised the main points.

*Source, Office for National Statistics

Summary

This was definitely a budget of two halves, Rishi Sunak was very honest in his delivery and stated that the first priority was to protect, support and create jobs but that that was going to come at a future cost. Whilst admitting it was not the time to announce tax rises across the board, The Chancellor did announce several policy changes and tax freezes. We have summarised some of the main points below.

Forecasts

The OBR have predicted that the UK will now have a swifter and more sustained recovery than initially predicted in November 2020.

They estimate growth to be; 

4% in 2021

7.3% in 2022

1.7% in 2023

1.6% in 2024 and 1.7% in 2025

Job support, protection, creation (Individuals)

  • Extension of the Furlough scheme until September 2021. From July 2021 companies utilising the scheme will be asked to contribute a small percentage of the 80% payment.
  • Self Employed individuals may be eligible for a 4th and 5th grant. Those previously ineligible for the self employment grants due to starting businesses in the 19/20 tax year, will now be eligible to apply for the grant but only on the basis they have already submitted their 19/20 tax return.
  • £20 Universal Credit uplift will remain for 6 months           
  • Living wage to increase to £8.91 in April 2021

Job support, protection, creation (Businesses)

  • Companies to be eligible for £3,000 funding for the hire of apprentices at any age
  • “Restart Grant” available for businesses who have not been able to open. Up to £6,000 for non-essential retail, per premises. And up to £18,000 for personal care, and gyms extra.
  • “Recovery Loan” available to businesses for loans of between £25,000 and £10m where the government will guarantee lenders up to 80% of the debt.
  • Business rates holiday for 3 months, and then 2/3 discount for the next 9 months.
  • VAT on hospitality reduced to 5% until 30th September 2021 and then 12.5% until April 2022 where it will then revert to normal.

Housing

  • Stamp Duty Holiday will remain in force until 30th June 2021. Between 30th June 2021 and 30th September 2021 Stamp Duty will start at a threshold of £250,000, raising to the usual £125,000 in October 2021.
  • 95% mortgages to be available.

Funding Economic Recovery

  • Income Tax rates, National Insurance, VAT frozen
  • Personal Allowance to raise to £12,570 from 2022 and then to remain at this point until April 2026
  • Higher rate income tax allowance to raise to £50,270 from 2022 and then to remain at this point until April 2026.
  • Inheritance Tax threshold, Pension Life Time Allowance, Capital Gains Tax allowances all frozen at current rates until April 2026.
  • Corporation Tax to rise to 25% in 2023 but based on company profits. Companies with profits sub £50,000 will have corporation tax remain at 19%. Those with profits between £50,000 and £250,000 will have corporation tax rates tapered between 19% and 25% respectively. Those over £250,000 will have 25% corporation tax rates from 2023.
  • Planned rises on duty of beer, wine, cider, spirits and fuel have all been frozen.
  • For any further information on any of the points above, please do not hesitate to get in contact with your adviser. 
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Director, Mark Insley, nominated for Adviser of the Year

Director, Mark Insley, nominated for Adviser of the Year!

Ascot Wealth Management had the honour of ending off a very unprecedented year by our managing director, Mark Insley, being nominated for the highly acclaimed Growth Investor’s Adviser of the Year Award. This award follows last year’s victory in the Professional Adviser Firm of the Year category. 

Just because we were working from home, does not mean that it was not a busy year, on the contrary, we were also nominated for the Money Marketing Awards 2020 in the Best Financial Education Initiative (Advice Firm) category and for Retirement Adviser of the year by Moneyfacts.

Commenting on the announcement, Mark said: “This is the perfect way to start our 10 year anniversary year.  The Company is going from strength to strength and I am delighted that we are being recognised as Industry leaders, particularly against a backdrop of so much uncertainty. This award is testament to the hard work of all our staff and we are incredibly proud of what we have achieved.”


We look forward to the results that will be made public during a virtual event in December. 

 

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Your child turned 18 – What happens to their Child Trust Fund now?

Your child turned 18 - What happens to their Child Trust Fund now?

This month will see the first Child Trust Funds (CTFs) turn 18 and thus reaching maturity. This means that many 18-year olds, some of whom will be heading off to university, others potentially embarking on a gap year, are about to receive full, legal entitlement over their plans.

For those lucky enough to be born between 1 September 2002 and 2 January 2011 they were enrolled in a CTF, which has since been replaced with a Junior ISA (JISA). The CTF was set up by the government to kickstart good saving habits, with every account credited with up to £500.  Around 25% of these were automatically set up by HMRC if parents did not set up the account before the child’s first birthday. This has meant that there are currently 6 million young people across the UK with a CTF, however, research suggests that at least 1 million of them have either lost track or are not aware that they have one registered to their name. This means that you/your child could have a pot worth £1,000, or potentially even more if parents added additional contributions. If you think your child was entitled to a CTF they can track it here

What happens now?

If the legal owner does nothing then;

  • If it’s in a stocks & shares (investment) CTF, it’ll be converted to an adult stocks & shares ISA.
  • If it’s in a cash CTF, it’ll be converted to an adult cash ISA.

What can I do with the cash? 

As stated above, if the legal owner leaves the CTF as is, it will convert in to one of two ISAs. Ultimately the proceeds of the CTF are up to the decision of the legal owner. Here we suggest some options. 

  1. Put it towards a first home 

Consider opening a Lifetime ISA account. This is a special tax-free savings account which gives you a 25% bonus on up to £4,000 saved a year (so a max £1,000/year bonus). You can then use this towards buying your first home.

  1. Invest it for a future need.

As the CTF will automatically transfer into an ISA, consider making this a Stocks and Shares ISA and investing it

  1. Move it to a savings account. 

If you wish to access the funds within two years, place the funds into an instant access cash savings account. 

If you wish to discuss the best option regarding the proceeds of a Child Trust Fund, please contact your adviser. 

For expert advice book your free, no-obligation meeting today. 

Did you miss out on the Child Trust Fund? Why not open a Junior ISA for a loved one? You can start with as little as £10 a month. Junior ISAs attract no tax on the earnings up and you are now eligible to save up to £9,000 per year they are a great vehicle to start your young one’s savings journey. Contact your adviser today. 

Source: BBC

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Stamp Duty Holiday – Not just an under £500k thing!

Stamp Duty Holiday - Not just an under £500k thing!

As you may have already heard, the government has temporarily increased the stamp duty threshold to £500,000 for property purchases in England and Northern Ireland, until 31 March 2021. In other words, there will be no stamp duty charged on properties costing up to £500,000.

Some good news – statistics show that the average stamp duty bill will fall by £4,500 and nearly 90% of people will benefit by paying no stamp duty at all as a result of the stamp duty holiday. This holiday is not just applicable for purchases under £500,000. If you, for example, purchase a property for £600,000 you will only pay stamp duty on the portion above £500,000, so in this scenario £100,000. 

Not only that, but those looking to purchase a buy-to-let or second home/investment property will also benefit from this payment holiday. Only 3% stamp duty is due for properties up to £500,000 (previously £125,000). So with depressed price levels vs last year, record-low borrowing costs, ability to use retirement income and a stamp duty holiday, has there been a better time for a long term property investment with a mortgage?

We have 2 in-house brokers who together with your financial adviser will help you decide if this is a good option for you. Contact us today for an obligation-free quote.

This is only for purchases that complete before 31st March 2021.

The full table is shown below.

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Meet the new faces

Meet the new faces!

We would like to introduce you to the AWM new starters. Every year we have placement students join us for the year to get experience in the industry by taking them through AWM’s proven training whilst learning the ropes in all aspects of business and how we as a company operate. Claire, Matt and even our compliance manager, Maddie, have all started their careers at AWM through the placement program. We also have people joining us in both the UK office and the SA support office which hold a more permanent role and we are delighted to welcome them to the team.

We would like to extend a warm welcome to all our new starters. It has certainly been a strange introduction to the company given the current global circumstances but the adjustment has set in and they are well on our way in learning more about the AWM. We wish them all the best in their new roles and we look forward to them growing personally and of course within Ascot Wealth Management.

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Have you claimed for the second self-employed support grant?

Have you claimed for the second self-employed support grant?

For those whose trade has been affected by the Coronavirus can now apply for the second wave of support from the government. The new Self-Employment Income Support Scheme (SEISS) will pay up to £6,750 and will be the final hand-out for those whose business has been affected due to the Coronavirus.
 
Businesses that have traded for all three years with profits no more than £50,000 are eligible for the scheme.
 
The claims window is initially open for a four-day period but anyone who thinks they may be eligible and hasn’t been contacted by HMRC has until October to make a claim.
The first grant in May saw £7.8billion in taxable grants claimed by 2.7million people.
 
To apply, this time around you will need to confirm your business has been affected by the virus since July 14. If you think you are eligible and have not been contacted by the HMRC, you can go online which will tell you if you are eligible. Click the button below to be redirected to the website.

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Catriona’s foster dog makes her a better Financial Adviser

How Catriona's foster dog makes her a better Financial Adviser

Today, we dive into the life of one of our superwomen Advisers, Catriona aka Cat. Cat has been a part of AWM for over 5 years now (Insert Applause) and is an important asset to the AWM Team. She is an AWM Superstar and now dog foster mum, read her article on how her Dog, Datsun, enriches her ‘work from home’ life.

Did you spot this article on the citywire website earlier this month?

Owner: Catriona McCarron, wealth manager at Ascot Wealth Management

Name of pet: Datsun

Breed: He’s a rescued Mastin cross (no idea what he’s crossed with!)

Age: 15 months

Funniest thing he’s done? We have family in Whitstable, which is along the Kent coast. We took Datsun there when the lockdown began to ease, and it was his first time seeing the sea. At first, he was really unsure about whether he should go in, but with a bit of persuasion and following us in he eventually did. When he did get in however, he decided all of the seaweed in the water needed to be back on the beach. He spent a good twenty minutes pulling it all out and dredged this small part of the Kentish coast! It was fun, until we had the job of throwing it back in…

How has your pet made you a better wealth manager? Datsun has kept me company since working from home became my norm in March. He’s made me a better wealth manager by encouraging me away from my desk at lunchtime and getting out for walks. Taking time to reflect on the day is so important, and some of my best ideas have been thought up on a lunchtime dog walk. Additionally he’s been a great tool for combating loneliness. My partner works for the NHS, so it has been business as normal since lockdown. It’s easy to find yourself talking to appliances when working alone, so at least I can talk to Datsun instead!

source: citywire.co.uk

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AWM QUIZ

AWM Quiz Night

In this strange time, community is very important. To help us stay in touch with our colleagues and share some much needed ‘face time’ with the people we usually spend 9 hours a day with we decided to host our very first AWM Quiz night. We can assure you that it won’t be the last. 

If you want to host your very own quiz night hit the link below to download your set of questions. 
 

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used. 

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Tapered pension annual allowance: what changed after the 2020 Budget?

Tapered pension annual allowance: what changed after the 2020 Budget?

Firstly: What is tapered annual allowance?

Let’s begin by understanding the annual allowance. This is the maximum you can save in your pension schemes each year. For the 2020/21 tax year the annual allowance is £40,000, but if you have a high income your annual allowance may be lower than £40,000. This is called a tapered annual allowance. 

Tapered annual allowance rules are applied when your level of income within the tax year exceeds the Threshold income limit and the Adjusted income limit

What is ‘threshold income’?

Threshold income is all of your earnings (not just your salary) and includes gains on investments. Foreign earnings do not count towards threshold income as they are not taxed in the UK.

What is ‘adjusted income’?

Adjusted income is all of your earnings which are subject to UK Income Tax, including all pension contributions paid by you and by your employer. The difference between ‘threshold income’ and ‘adjusted income’ is that the former excludes pension contributions but the latter includes all pension contributions.

So, what are the recent changes?

The Government has announced a significant increase to the threshold income and adjusted income limits that are used to work out the tapered annual allowance.

From 6 April 2020, you will have a reduced (‘tapered’) annual allowance if:

  • your threshold income is over £200,000 (this was previously £110,000)   and
  • your adjusted income is over £240,000 (this was previously £150,000)

How does the tapered annual allowance affect my pension savings?

If you are subject to the tapered annual allowance, for every £2 your adjusted income goes over £240,000, your annual allowance for that year reduces by £1. From 6 April 2020 this reduces all the way to a £4,000 annual allowance (which has recently been lowered from £10,000).

What’s the Next Step?

If you have concerns about your pension annual allowances or would like to speak to someone about your pensions or other investments, we’re here to help you. You can either phone us directly or click below to book a meeting with one of our professional advisers.

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Government doubles Junior ISA limit to £9k

Government doubles Junior ISA limit to £9k

These current circumstances will have many families focused upon the immediate future, the next few months, how to adjust to homeschooling and spending significantly more time together. However, life must go on and although our futures may be different, saving for our children’s futures are still a high priority. Junior ISAs provide an excellent way to invest in their future, and the doubling of the tax-free annual allowance allows those who can to contribute more than ever before.

What is a Junior ISA?

It is a tax-free savings account which is only available for children below the age of 18.

There are two types:

  • Cash Junior ISA: deposit based account available in banks and building societies.
  • Stocks and shares Junior ISA: invest your child’s savings in a stock market investment.

Each eligible child can only have one cash and one stocks and shares Junior ISA.

What are the recent changes?

Before the recent changes, £4,368 could be paid into a Junior ISA in the 2019 to 2020 tax year. However, following the 2020 Budget, the allowance has more than doubled.

In the 2020 to 2021 tax year, up to £9,000 can be paid into a Junior ISA.

How much can you save?

Up to the maximum Junior ISA allowance, which is £9,000 in the 2020/21 tax year.

The allowance resets every tax year and you can add a new allowance to your Junior ISA each tax year until your child turns 18.

If you open a cash Junior ISA and a stocks and shares Junior ISA you have to make sure you do not collectively exceed the Junior ISA allowance each tax year, as the allowance is shared over both types.

Who Can Open a Junior ISA?

This depends on the age of your child:

  • If they are under 16 years old: a parent or guardian needs to open the Junior ISA on their behalf.
  • If they are 16 or 17 years old: they can open a cash Junior ISA themselves, but not a stocks and shares Junior ISA.

If you open a cash Junior ISA on behalf of your child it will automatically switch into their name when they turn 16, but they will not be able to access the money until they turn 18.

What’s the next step?

If you wish to top up or open up a Junior ISA or would like to speak to someone about your other investments, we’re here to help you. You can either phone us directly or click below to book a meeting with one of our professional advisers.