What’s happening out there in international financial markets?  Wan't to know more about  pensions, investments and taxes? How could changes in legislation affect you and your finances?  Keep up to date with my financial advice based blog.

Why cash-flow modeling is essential when planning your retirement

Cash flow modeling is the practice of planning and forecasting sources and uses of cash. Its ultimate objective is to provide a framework that enables the most effective and efficient use of pension and investment income and the maximisation of free cash flow.

It is the process of assessing your current and forecasted wealth, along with inflows (income) and outflows (expenditure), to enable a picture to be created of your finances both now and in the future.

Whereas budgets are based on your active plans for the future, a cash flow forecast is an estimate of future projected income and expenditures.

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Do you really need insurance?

You can pretty much insure against anything and everything nowadays. But which cover do you really need? And how do these policies work?

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The Nil Rate Band & Residential Nil Rate Band in a nutshell

Although the rules relating to nil rate bands can be a complex aspect of inheritance tax, it can offer significant opportunities to help mitigate potential tax due.

What is the nil rate band?

The nil rate band (NRB), also known as the inheritance tax (IHT) threshold, is the amount up to which an estate has no IHT to pay.

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Thinking about setting up a trust?  Which trust is right for you?

Absolute/Bare Trusts

A bare trust is one where the person who benefits from it (referred to as the beneficiary) has an immediate and absolute right to the assets that are transferred to the trust and any income generated by them. The property is held in the name of the trustee (or trustees), but the trustee has no discretion over the assets held in trust. The trustee of a bare trust is a mere nominee, in whose name the property is held. Except in the case of bare trusts for minors, the trustee has no active duties to perform.

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Should you consider using a Spousal Bypass Trust for your pension?

The death benefits of a pension fund can in most cases be passed to loved ones, via an “expression of wishes” form. Under the flexi access pension rules, funds passed to a spouse will pass tax- free (note that income tax is payable at the beneficiaries marginal rate after age 75). However if you leave the pension fund to your spouse, this means that when they die, those funds will form part of your partner’s estate on their death and would then be subject to inheritance tax.  Spousal Bypass trusts can help to mitigate this and play a useful role in IHT planning.

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