A Merry Christmas and a Happy New Year to all my readers. Looking back on the blogs for the year one popular subject has been Northern Rock, the British mortgage lender, which needed rescuing by Her Majesty's Government. There has been some recent comment that a "market solution" should have been applied, ie let the Newcastle-based bank go bust in September. Northern Rock was quite close to me because I lost a few bob on the shares, when I actually sold them.
I think Alistair Darling did the right thing of safeguarding the deposits and perhaps a temporary nationalisation will help right Northern Rock although some deluded shareholders want £4.10 a share. However the cookie crumbles, it does not look good for the reputation of the City. Darling's reputation as Chancellor has not been helped by the Northern Rock debacle. It is thought that he is just a cipher for UK prime minister Gordon Brown. The same Brown who says he just taking Xmas day off for his Christmas holidays and then spends a couple of weeks in Scotland.
Monday 24 December 2007
Friday 21 December 2007
I am trying to get my head around the inheritance tax changes!!
I am trying to get my head around the forthcoming changes in British inheritance tax. These were announced by UK chancellor Alistair Darling in his recent pre-budget speech. The inheritance tax threshold is to doubled to £600,000 and then slowly lifted to £700,000 by the year 2010.
In the edition of Internationalmarketing.co.uk dated November 8th, 2007 it was stated that "The rules are complex and the terms of everyone's will and their trusts, if they have them, are different. The important thing is to recognise that the tax regime has changed significantly and for the better but that people may need to act now to ensure their families derive the maximum benefit when they die.
The changes affect anyone with an estate more than £300,000 and increasingly when the figure get towards and over £600,000."
Inheritance tax is so complex in the United Kingdom but it would be quite simple to scrap it like in Australia.
In the edition of Internationalmarketing.co.uk dated November 8th, 2007 it was stated that "The rules are complex and the terms of everyone's will and their trusts, if they have them, are different. The important thing is to recognise that the tax regime has changed significantly and for the better but that people may need to act now to ensure their families derive the maximum benefit when they die.
The changes affect anyone with an estate more than £300,000 and increasingly when the figure get towards and over £600,000."
Inheritance tax is so complex in the United Kingdom but it would be quite simple to scrap it like in Australia.
Wednesday 19 December 2007
End of UK stock market growth, part two!!
In the previous blog I commended Chris Dillow's article in the December 14th-27th issue of Investors Chronicle, which examines the possibility of the British stock market going ex-growth. Performance has only held up due to the contribution of the tobacco, banking and mining sectors. Dillow notes that UK shares are cheap and the factor behind this is that investors have recognised the ex-growth nature of UK quoted PLC.
Factors include foreign competition and more money taken by the workforce.
Chris Dillow writes "John Terry, Brad Pitt and Jonathan Ross earn big money because their employers need them more than they need their employers." I dispute this. For instance, Arsene Wenger has kept the pay levels relatively down by transferring anybody who wants silly money such as Ashley Cole.
Another possible factor in the lack of growth in the British stock market is that pension funds are choosing UK gilts (government bonds) instead of equities.
Factors include foreign competition and more money taken by the workforce.
Chris Dillow writes "John Terry, Brad Pitt and Jonathan Ross earn big money because their employers need them more than they need their employers." I dispute this. For instance, Arsene Wenger has kept the pay levels relatively down by transferring anybody who wants silly money such as Ashley Cole.
Another possible factor in the lack of growth in the British stock market is that pension funds are choosing UK gilts (government bonds) instead of equities.
Has the UK stock market gone ex-growth?
Has the British stock market gone ex-growth? I read an interesting article by Chris Dillow in the Investors Chronicle, who noted that the only true performers in the
last twenty years were banks, tobacco and mining companies. Dillow noted that companies well-known for their innovation such as media and software had been poor performers.
I personally would not invest in the banks at the moment since they are suffering a few problems but maybe BAT and Imperial Tobacco look reasonable. Or rather than taking my amateurish advice, you could contact an
independent financial adviser.
Out of the banks you got to look at the ones, where the share prices have not fallen so much such as HSBC, Standard Chartered and Lloyds TSB. Again, caveat emptor, I am not giving investment advice I am just blogging on a sunny afternoon.
last twenty years were banks, tobacco and mining companies. Dillow noted that companies well-known for their innovation such as media and software had been poor performers.
I personally would not invest in the banks at the moment since they are suffering a few problems but maybe BAT and Imperial Tobacco look reasonable. Or rather than taking my amateurish advice, you could contact an
independent financial adviser.
Out of the banks you got to look at the ones, where the share prices have not fallen so much such as HSBC, Standard Chartered and Lloyds TSB. Again, caveat emptor, I am not giving investment advice I am just blogging on a sunny afternoon.
Wednesday 28 November 2007
Dr Marc Faber says U.S already in recession.
Money Marketing cites economist Dr Marc Faber, who says the U.S economy is already
in recession. Faber notes the sub-prime crisis and falling residential prices.
He says that a synchronised global bust could be rather unpleasant. The Swiss-born
economist is the author of the "Gloom,Boom and Doom" report. Dr Faber is famous for his calls on markets.
in recession. Faber notes the sub-prime crisis and falling residential prices.
He says that a synchronised global bust could be rather unpleasant. The Swiss-born
economist is the author of the "Gloom,Boom and Doom" report. Dr Faber is famous for his calls on markets.
Thursday 22 November 2007
Choosing an independent financial adviser
It is interesting the difference between having the choice of a range of
products from an independent financial adviser and going to a bank, which
is committed to its tied products. I am considering a long-term product,
a pension. There is a bit of hoping and seeing. There are no guarantees,
just a realm of possibilities. The Nat West brochure offered me the
princely sum of £60 a month in return for quite a bit of saving. Perhaps,
the 1.5 per cent charge is quite high. I would be more comfortable with
a charge of 1 per cent.
National Westminster is part of the Royal Bank of Scotland (RBS) group.
products from an independent financial adviser and going to a bank, which
is committed to its tied products. I am considering a long-term product,
a pension. There is a bit of hoping and seeing. There are no guarantees,
just a realm of possibilities. The Nat West brochure offered me the
princely sum of £60 a month in return for quite a bit of saving. Perhaps,
the 1.5 per cent charge is quite high. I would be more comfortable with
a charge of 1 per cent.
National Westminster is part of the Royal Bank of Scotland (RBS) group.
Monday 19 November 2007
Tax amnesty for UK offshore accounts!!
The Sunday Times reports that some 64,000 taxpayers have come forward under
the tax amnesty launched by the HMRC to pay unpaid tax and a 10 per cent
fine unlike the usual 100 per cent fine. The British tax body has raised
£140m so far and expects to reach a figure of around £500m by the late
November deadline.
the tax amnesty launched by the HMRC to pay unpaid tax and a 10 per cent
fine unlike the usual 100 per cent fine. The British tax body has raised
£140m so far and expects to reach a figure of around £500m by the late
November deadline.
Tuesday 13 November 2007
UK bank stocks can go up and they can go down!!
UK stocks can go up and they can go down as shareholders of Barclays can testify
with their recent bumpy ride. A mate of mine bought them at six
something and now the bank stock is five something after reaching four
something and he is not a happy bunny.
British bank stocks have been one of the pillars of UK income funds, both unit
trusts and investment trusts. The banks were used to provide the income but this
strategy has truly unstuck with the collapse of Northern Rock. I am no expert in shares but I think the advice of being able to lose your investment, if it came to it, is a sound one.
I suppose shareholders in Royal Bank of Scotland were hoping for a more
robust performance than they got recently. What as Fred the Shred Goodwin got to
to say to his institutional investors?
(Now that we are in January 2009 we know how it has panned out for Fred the Shred.
In addition, investors can only dream of £5 for Barclays.)
with their recent bumpy ride. A mate of mine bought them at six
something and now the bank stock is five something after reaching four
something and he is not a happy bunny.
British bank stocks have been one of the pillars of UK income funds, both unit
trusts and investment trusts. The banks were used to provide the income but this
strategy has truly unstuck with the collapse of Northern Rock. I am no expert in shares but I think the advice of being able to lose your investment, if it came to it, is a sound one.
I suppose shareholders in Royal Bank of Scotland were hoping for a more
robust performance than they got recently. What as Fred the Shred Goodwin got to
to say to his institutional investors?
(Now that we are in January 2009 we know how it has panned out for Fred the Shred.
In addition, investors can only dream of £5 for Barclays.)
Wednesday 7 November 2007
James Hay mails direct SIPP offers.
Money Marketing reports that the Abbey (Banco Santander) unit James Hay
sent out a mailing to its 13,000 SIPP clients offering access to a select
panel of investment experts. Independent financial advisers (IFAs) accused
James Hay of undermining them. Money Marketing cites Robert Goldschmidt, a
partner at Cumberland Place, who says that James Hay cannot compete
against them and provide a service for them at the same time. Goldschmidt
has 85 clients on the platform with about £45m of funds under
management.
www.searchifa.co.uk
sent out a mailing to its 13,000 SIPP clients offering access to a select
panel of investment experts. Independent financial advisers (IFAs) accused
James Hay of undermining them. Money Marketing cites Robert Goldschmidt, a
partner at Cumberland Place, who says that James Hay cannot compete
against them and provide a service for them at the same time. Goldschmidt
has 85 clients on the platform with about £45m of funds under
management.
www.searchifa.co.uk
Monday 5 November 2007
Will mortgage market absorb Northern Rock slack?
Will the British market absorb the residential mortgages, that should
have been written by the tottering UK bank Northern Rock? At the beginning
of November Money Marketing cites John Malone, who says that the
market will struggle to cover the £20bn to £25bn handled by the
Newcastle-based lender. Mr Malone, who is managing director of
Premier Mortgage Service, comments that he is hard put to think of
lenders, who could handle the business.
However, Phil Jenks is more positive since most of Northern Rock's
business is straightforward two year remortgage business. Mr Jenks is
head of mainstream mortgages at Halifax Bank of Scotland (HBOS).
have been written by the tottering UK bank Northern Rock? At the beginning
of November Money Marketing cites John Malone, who says that the
market will struggle to cover the £20bn to £25bn handled by the
Newcastle-based lender. Mr Malone, who is managing director of
Premier Mortgage Service, comments that he is hard put to think of
lenders, who could handle the business.
However, Phil Jenks is more positive since most of Northern Rock's
business is straightforward two year remortgage business. Mr Jenks is
head of mainstream mortgages at Halifax Bank of Scotland (HBOS).
Ros Altmann is my hero!!
British pensions guru Ros Altmann is my hero!!! She seems to be combatting the UK government's lack of concern for pensions in a solo campaign. A recent edition of Money Marketing quoted her views that private pensions are no longer suitable for the vast majority of people.
I have been thinking of perhaps investing some more in pension provision
only because I have relatively got not long to go to retirement. Maybe with
Ms Altmann's views, I should
reconsider.
The tax relief is tempting on SIPPs and there is a lot more scope for different
investment strategies. However, there is no guarantee that pensioners will not be
taxed heavily when they have saved relatively large sums only through frugal
lifestyles and cautious investment.
Ms Altmann is a pensions personality of the year for 2007. She has contrasted the
bailout for Northern Rock depositors with the lack of response for investors
in company occupational pension schemes where the sponsor has gone bust.
I have been thinking of perhaps investing some more in pension provision
only because I have relatively got not long to go to retirement. Maybe with
Ms Altmann's views, I should
reconsider.
The tax relief is tempting on SIPPs and there is a lot more scope for different
investment strategies. However, there is no guarantee that pensioners will not be
taxed heavily when they have saved relatively large sums only through frugal
lifestyles and cautious investment.
Ms Altmann is a pensions personality of the year for 2007. She has contrasted the
bailout for Northern Rock depositors with the lack of response for investors
in company occupational pension schemes where the sponsor has gone bust.
Saturday 27 October 2007
Isle of Man aims to attract hedge funds.
In a recent edition of Money Marketing, it is reported that the Isle of Man
aims to attract more hedge fund business. The target is to reach $100bn under
administration within the next three years. This compares with $50.1bn as
at last June.
Money Marketing cites Isle of Man official Brian Donegan, who comments on
the existing tax advantages of the island.
aims to attract more hedge fund business. The target is to reach $100bn under
administration within the next three years. This compares with $50.1bn as
at last June.
Money Marketing cites Isle of Man official Brian Donegan, who comments on
the existing tax advantages of the island.
Friday 19 October 2007
Telegraph's Damian Reece rails against CGT changes
In his City Editorial for the Daily Telegraph, Damian Reece rails against
the increased capital gains tax (CGT) levied on entrepreneurs. Reece describes
business startups as "a social good". I think it is a social necessity especially
as we sell our bigger companies to foreigners, who can chop the headquarters
of a big group as easily as "we can say un, deux trois or uno, dos, tres with
a mini-Spanish invasion swooping up BAA, O2 and Scottish Power. What did we do
in return, I suppose Barclays bid for Banco Zaragozano does count.
http://tbn0.google.com/images?q=tbn:eiSTF5ddQ3M-HM:http://www.deftec.co.uk/photographs/images/DEFTEC%2520Damian%2520Reece%2520to%2520AIS%2520close-up.jpg
Maybe, Chancellor Alistair Darling will clean up the mess he is making. However,
he will be unable to shake off the suspicion that he is the monkey. My view is
that if CGT is simplified, then the tax take would go up and we would have more
money to invest (waste?) in public sector things. In terms of public disclosure,
I have paid CGT in the past.
the increased capital gains tax (CGT) levied on entrepreneurs. Reece describes
business startups as "a social good". I think it is a social necessity especially
as we sell our bigger companies to foreigners, who can chop the headquarters
of a big group as easily as "we can say un, deux trois or uno, dos, tres with
a mini-Spanish invasion swooping up BAA, O2 and Scottish Power. What did we do
in return, I suppose Barclays bid for Banco Zaragozano does count.
http://tbn0.google.com/images?q=tbn:eiSTF5ddQ3M-HM:http://www.deftec.co.uk/photographs/images/DEFTEC%2520Damian%2520Reece%2520to%2520AIS%2520close-up.jpg
Maybe, Chancellor Alistair Darling will clean up the mess he is making. However,
he will be unable to shake off the suspicion that he is the monkey. My view is
that if CGT is simplified, then the tax take would go up and we would have more
money to invest (waste?) in public sector things. In terms of public disclosure,
I have paid CGT in the past.
Wednesday 17 October 2007
CGT or not to CGT that is the question!!
I suppose the personal investor needs an accountant or an independent financial adviser to work out the British form of torture Capital Gains Tax or CGT. There
is a great temptation to ignore it altogether since it is so complicated.
I have looked at the HMRC website
and I am really none the wiser.
For business assets UK Chancellor Alistair Darling is proposing an 80 percent increase in the levy and even three judges in the BBC show "Dragons Den"
are joining the protest.
is a great temptation to ignore it altogether since it is so complicated.
I have looked at the HMRC website
and I am really none the wiser.
For business assets UK Chancellor Alistair Darling is proposing an 80 percent increase in the levy and even three judges in the BBC show "Dragons Den"
are joining the protest.
Tuesday 2 October 2007
HMRC is cracking down on offshore accounts.
A matter of interest for all independent financial advisers (IFAs) is the
continuing crackdown by the British tax collection body HM Revenue and Customs (HMRC) on offshore accounts. On September 30th,
the Sunday Times reported that £100m has been paid in tax so far and the final
amount could reach £5bn.
Singapore and Dubai have not signed up to the European Savings Directive and
have attracted quite a bit of money so far. For example, the directive enables the HMRC to get details of a French bank account if a person lives in the
United Kingdom. The Sunday Times says the HMRC will be more agreeable if people come to the Revenue first but the tax body reserves the right to prosecute in serious cases. Most British offshore accounts are located in the Isle of Man, Guernsey and Jersey. It is estimated that 3m people have offshore accounts.
continuing crackdown by the British tax collection body HM Revenue and Customs (HMRC) on offshore accounts. On September 30th,
the Sunday Times reported that £100m has been paid in tax so far and the final
amount could reach £5bn.
Singapore and Dubai have not signed up to the European Savings Directive and
have attracted quite a bit of money so far. For example, the directive enables the HMRC to get details of a French bank account if a person lives in the
United Kingdom. The Sunday Times says the HMRC will be more agreeable if people come to the Revenue first but the tax body reserves the right to prosecute in serious cases. Most British offshore accounts are located in the Isle of Man, Guernsey and Jersey. It is estimated that 3m people have offshore accounts.
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