PK Partnership cost of financial advice

Make your Will the right way…

Like all legal documents, your will must meet certain requirements.

Firstly, a will must be signed and witnessed to be valid. You must have two witnesses who can’t be beneficiaries or be married to a beneficiary.

If your circumstances change – perhaps selling a business or having a child – you will need to update your will. These changes also need to be signed and witnessed.

If you marry, any previous will you have made will usually be invalid, so you must make a new one. Remember, unmarried partners don’t automatically inherit, and stepchildren won’t automatically be included in provisions for ‘children’.

If you are excluding a close family member, make it clear why you are doing this and what you want done with the money. If your reasons aren’t clear the individual could contest your will in the courts.

You should name at least two executors to sort out your financial affairs after you die. Executors can be beneficiaries, such as relatives or friends, or you could appoint a solicitor instead. If you don’t do this the probate court will appoint an executor on your behalf.

The Financial Conduct Authority does not regulate will writing, trusts and some forms of estate planning. This article is for general information purposes only. Please speak to a will writing professional for advice.

 

Image courtesy of Flickr_Pink Sherbert Photography

Lessons from a record bull run

The US stock market recorded its longest ever bull run in August 2018.

A new record was set for the Standard & Poor’s 500 (S&P 500) index on 22 August 2018, when the market reached the 3,453rd day of a run that started on 9 March 2009.

The index has also achieved numerous all-time highs as part of this run.

Bull markets are typically defined as periods starting with a market low point and ending when the relevant index falls by more than 20% – and they rarely last as long as this.

The S&P 500’s current bull market started when the index hit the memorable low of 666 during March 2009. By 22 August 2018 the Index was at 2,871, a 331% increase from the depths of the

financial crisis and an annual growth rate of 16.6%, before any dividends are considered.

Although the Dow Jones Industrial Average (DJIA) is often quoted as the performance measure of the US stock market, investment professionals prefer the S&P 500 as a benchmark. As its name suggests, the S&P 500 has 500 constituent companies, whereas the DJIA has just 30.

Over the same period, the UK benchmark the FTSE 100 roughly doubled in value. However, for UK-based investors, returns from the US could be marginally greater than those implied by the S&P 500 because the pound was at $1.376 on 9 March 2009, whereas it was trading at only $1.291 by 22 August 2018.

INVESTMENT STRATEGIES

The nine years of a US bull market offer investors some lessons:

- International diversification of investment can deliver rewards. UK-based investors can pay the price of favouring funds investing in their home country. While many of the UK leading companies are multinational, no UK-listed companies have matched the performance of the likes of Apple or Facebook.

- Currency can play a part in adding to returns – or reducing them. Changes in currency valuations impact on both foreign-listed shares and UK-listed shares of companies with overseas earnings.

- Timing entry and exits to a market can be difficult. As the graph shows, US markets have seen a few small dips since 2009.

Exploiting them successfully by selling at the high and buying back after the dip may appear easy – but only with hindsight.

Staying invested and ignoring the market ‘noise’ has proved to be a sensible strategy.

Despite the success, the long-term rise in US shares has been labelled the ‘most hated bull market’ in history. Almost since its start in 2009, many market watchers have predicted its demise. So far, they have all been proven wrong.

If you want to review the global spread of your investments, why not ask us to calculate a geographical breakdown of your portfolio, drilling down into each fund’s holdings?

The value of your investments and the income from them can go down as well as up and you may not get back the full amount you invested.

Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

 

Image courtesy of Flickr_Sheila Sund

HMRC Focus on Inheritance Tax Returns

HMRC investigated almost one in four inheritance tax (IHT) returns in 2017/18, according to research published in September by UHY Hacker Young.

HMRC can impose penalties of up to 100% of the tax due on UK estates that underpay. These penalties apply even though it is often a family member who acts as executor after a relative has died.

Executors have a legal duty to ensure all information is correct when applying for probate or filing an IHT return.

Particular care should be taken to ensure property values reflect current market conditions, and that assets are not omitted from the return. Not all estates will be liable for IHT. The rules can be complex, so seek advice if necessary.

 

Image courtesy of John&Fish, Flickr

Getting married – doing the right thing

There are many misconceptions around the rights of the 3.3 million unmarried couple families in the UK. The government has recently announced that heterosexual couples will be able to enter into civil partnerships in England and Wales, but there will still be many unmarried couples who see no advantage in a marriage or civil partnership. However, it is worth understanding some of the laws relating to co-habitation.

First, there is no such thing as a ‘common-law’ marriage. The nearest legal status, ‘irregular marriage’, only applied under Scottish law, and it was mostly abolished in 2006.

This means that transfers of investments between unmarried partners could be subject to capital gains tax, which would not apply to transfers between spouses living together. Yet, at the same time, the government can treat unmarried couples as if they were married for some tax and benefit rules such as the high income child benefit charge.

IN CASE OF THE WORST

Some severe consequences of not marrying are revealed at the most difficult times. If an unmarried couple splits up, an ex-partner has no right to claim spousal maintenance or share of the other’s pension(s). They can only make a claim in respect of solely owned property if they can show they have made a financial contribution or have carried out repairs or improvements, which may not be the case if the non-owner stayed at home to care for children during the time they were together.

If an unmarried partner dies without leaving a will, the survivor will only automatically inherit property the couple owned as joint tenants. If the surviving partner does inherit under their partner’s will – including automatic transfers of jointly owned property – they could incur inheritance tax, even if it is their home. Married couples can use the spousal exemption to transfer any unused nil rate band and residence nil rate band to reduce IHT.

Surviving unmarried partners also won’t receive the state bereavement support payment, normally paid to widow(ers). A recent Supreme Court judgement questioned this practice, but as yet the rules have not changed.

A different approach to financial planning may be needed if you have not married your partner. To understand what that means for you and your partner, please get in touch.

 

PK Partnership cost of financial advice

The ski season is here!

The skiing season is here and many people will be heading to the slopes this winter. Skiing accidents, however, are the most common claim on Winter Sports insurance. Even experienced skiers and snowboarders can be involved in collisions or accidents.

Top tips for staying safe on the slopes

1. Know your limits – ski or snowboard to your skill level

2.Wear protective headgear or a helmet – we would advise to make wearing a helmet mandatory.

3.Make sure your skiing or boarding equipment is in good order. It should fit your height, weight and skill level.

4.Take lessons if you’ve never skied before. If you haven’t been on the Piste for a while, a lesson or two will polish up your skills.

5.Never go off-piste unless you are authorised to do so by the resort. On many insurance policies, you will not be covered for off-piste skiing unless you’re accompanied by a qualified guide.

6.Respect the mountain and make sure you obey all warning signs – especially during avalanche season.

7. Remember that skiers or boarders in front or below you on the Piste have right of way.

8. Don’t drink and ski. Excess alcohol will slow your reactions and affect your observation and balance!

9. Carry a fully charged mobile phone with you.

10. Always take out the right winter sports travel insurance. Make sure your travel insurance suits your needs before you buy it and keep your travel insurance medical emergency helpline number and your policy number to hand.

Many private client insurance policies will cover winter sports but it’s always a good idea to check with your insurance broker what you’re covered for, such as age limits and impaired medical circumstances. Please contact us if you require specialist travel or ski chalet insurance.

 

Diwali Insurance PK Partnership

Wishing you and your family a Happy Diwali

Wishing you and your family a very Happy Diwali! May the lights guide you and happiness never leave your side.

…but please ensure your jewellery is correctly insured!

We don’t’ want to put a negative on this wonderful celebration but Asian Gold can be a particular target thieves around Diwali as communities get together to celebrate, leaving homes empty.

Gold is highly desirable to criminals due to the speed that it can be exchanged for large sums of cash.

Anjana Pankhania, Private Clients Manager at PK Partnership said, “with the majority of banks no longer storing jewellery, people have little option but to keep their items at home but they are not always adequately protected. This is not by any stretch just affecting high net worth individuals and we would recommend that families check their current insurance limits. With jewellery being handed down through generations of families it is often hard to prove the value of items as people do not have up to date valuation certificates.”

Recommended steps include keeping all jewellery and other valuables in a safety deposit box, high value gold and jewellery at home, hidden and discreet in public, being vigilant during holidays, weddings and events, and ensuring all jewellery is digitally recorded and insured.

In a house there are only so many places one can hide jewellery and thieves know the obvious places, typically under the bed and between the floor boards.

Top tips to ensure your jewellery is correctly insured

1. Ensure that there is adequate safe protection in your home

2. Have a professional valuation for all high value items

3. Photograph all items of jewellery

4. Avoid wearing an accumulation of high-value pieces in areas or places that you don’t know

For more information please contact Anjana Pankhania at PK Partnership Private Clients Division on 020 8681 4994.

 

Image Courtesy of Flickr_Ishan Manjrekar

Budget Snapshot 2018

The Budget statement was delivered today at 3.30pm by the Chancellor of the Exchequer, Philip Hammond.

This is the first Monday Budget since 1962, the year Ipswich Town were Football League Champions for the only time.

The Budget is a report presented each year by the Chancellor of the Exchequer to Parliament and the nation. The primary role of the Budget is to control public finances by setting out how much tax the Government will collect, how much the Government will borrow and how much the Government will spend. The Budget Responsibility and National Audit Act 2011 requires the Government to produce a Budget Report (which is the formal name for the Budget) for each financial year. The Charter for Budget Responsibility sets out what the Budget Report must cover.

When the Government publishes the Budget, the Chancellor gives a speech to Parliament in which he sets out the key decisions on tax, borrowing and spending, and his reasons for taking those decisions. This speech is known as the Budget Statement.

The official forecast on which the Chancellor bases the Government’s Budget is provided by the Office for Budget Responsibility (OBR). The Budget Responsibility and National Audit Act 2011 requires the OBR to publish two economic and fiscal forecasts for each financial year, including one published at the Budget. The OBR’s duty is to examine and report on the sustainability of the public finances and it is required to do so objectively, transparently and impartially.

PLEASE NOTE: This snapshot is not intended as an in-depth analysis of the Chancellor’s speech (we will leave that to the industry commentators and experts) but we hope this brief summary helps you gain a quick grasp on the key points delivered by the Chancellor from the dispatch box.

More details are available from HM Treasury website.

 

Main Headlines from the Speech

Introduction

This Budget is presented as the ‘era of austerity coming to an end’. If the fiscal outlook changes, that is if there is no Brexit deal, the Spring Statement will be upgraded to a Budget statement.

 

Forecasts

Growth 2019: 1.6%, up from 1.3% in the spring statement

2020: 1.4%, up from 1.3% in the spring statement

2021: 1.4%, matching 1.4% in the spring statement

2022: 1.5%, matching 1.5% in the spring statement

2023: 1.6% (new forecast)

Forecast for borrowing to be £11.6bn lower in 2018/2019 than forecast at the Spring Statement equivalent to 1.2% of GDP.

 

Borrowing forecast

£31.8bn in 2019/2020

£26.7bn in 2020/2021

£23.8bn in 2021/2022

£20.8bn in 2022/2023

£19.8bn in 2023/2024

 

Debt forecast

82.8% in 2019/2020

79.7% in 2020/2021

75.7% in 2021/2022

75.0% in 2022/2023

74.1% in 2023/2024

 

Taxation / Welfare / Finance

  • Personal allowance in 2019/2020: £12,500
  • Higher rate threshold in 2019/2020: £50,000
  • Stamp duty to be abolished for first-time buyers of shared-ownership homes for properties valued up to £500,000.
  • Private residence relief: Lettings relief to be limited
  • Entrepreneur’s relief: qualifying period to be extended to 2 years
  • IR35 rules to be extended to the private sector from April 2020 and will only apply them to large and medium-sized businesses
  • UK digital services tax from April 2020. Not to be on start-ups
  • HMRC to become preferred creditor in insolvencies.
  • Tax on plastic packaging containing less than 30% recyclable plastic.
  • Universal credit: all work allowances to increase by £1000.
  • Extra £1bn for universal credit over five years to fund extra protections for claimants moving over to UC.
  • National Minimum Wage: £8.21 up from £7.83 from April 2019

 

Housing / Infrastructure / Transport

  • £420m to be made available immediately to help councils tackle pot holes
  • No new PFI schemes £695m initiative to help small firms hire apprentices
  • £675m future high street
  • Business rates to be cut by one third for firms with a rateable value of less than £50,000 until next revaluation

 

Health / Education / Child Welfare

  • NHS 10-year plan to include a new NHS crisis service. Children and young people’s crisis teams will be available in all parts of the country
  • Mental health funding up by more than £2 billion by 2023/2024
  • Green paper on the future of social care to be published soon £400m fund to help schools buy ‘extras’ they need.

 

Excise Duty

  • Fuel duty frozen
  • Tobacco duty increased by inflation plus 2.5%
  • Beer and cider duty frozen
  • Duty on spirits frozen
  • Wine duty increased by inflation
  • No increase to air passenger duty on short haul flights

 

Infographic: A look back at arranging insurance for this year’s Gumball 3000 rally

PK Partnership look back at the journey of this year’s Gumball 3000 rally.

As the official insurance partner for the annual Gumball 3000 rally, which started in London and went through Europe and on to the finish line in Tokyo, we look at some key facts from the event that attracted celebrities such as David Hasselhoff and Usher. An eclectic mix of vehicles were entered into the rally with the highest insured vehicle valued at £1.5m.

Gumball_3000_Rally_Insurance_PK_Partnership_2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Click here to read about our logistical challenges.

 

Image Courtesy of Flickr_Ishan Manjrekar

What are my digital assets?

How many things in your life do you manage or store on your computer, tablet, smartphone or online? Like many people today you probably access photos, videos, music, e-books, blogs, movies, emails, conversations, social media, games, bank accounts, medical records, and even maintain your identity – all online. All of these are called “digital assets” and they may be of financial or sentimental value to you and your family. They can be just as precious and important as physical assets that you can touch. They should be part of your general planning for what happens when you die or if at any time you lose mental capacity to manage your own affairs.

Why are my digital assets important?

Within just a few years, digital assets have become important in many areas of our lives. We must plan for what happens to our digital assets on death or when we lose mental capacity, for a number of reasons:

  • Financial Value; such as PayPal accounts, virtual bank accounts, online gaming accounts; bitcoin; photographs; popular domain names or online businesses.
  • Sentimental Value; in this “digital age” personal assets such as photos or emails may not be in physical form, instead they may be stored on a smartphone, a flash drive, an online photo sharing website, a cloud storage server or a social networking account. If you die or lose mental capacity and no one can control or access these treasured memories the emotional impact on family and friends can be significant.
  • Privacy & Confidentiality; private information that other people should be restricted or prevented from seeing. For example, email or Facebook accounts may reveal the existence of relationships or interests that are not widely or otherwise known.
  • Identity Theft; recent statistics estimate that more than 20 people have their identity stolen through online hacking every minute of every day. When you die or lose your mental capacity, you are no longer monitoring the use of your digital assets, and so the risk of identity theft is greatly increased.

How should I plan my digital legacy?

  • Make an inventory list of your digital assets, to provide your representative (agent, executor, personal representative, guardian, attorney, etc.) with details of these assets and where to find them.
  • Appoint a representative – someone you can trust if you are mentally disabled or die.
  • Tell them what you want to do and achieve.
  • Make sure your representative knows how to access your accounts and passwords.
  • Make sure the appointment is effective – different providers and terms of service agreements have different requirements so be specific.

Where can I get help?

Laws in this area are unsettled and vary between countries and even between states within a country. The service agreements you have entered into with various service providers may govern how your representative can work with your digital assets. For information and advice go to the STEP website where you will find more information and links to knowledgeable professionals who can help you through this process.

 

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Gumball 3000 20th Anniversary Rally from London to Tokyo

Insuring the Gumball 3000 Rally

Gumball 1As the official insurance partner for the annual Gumball 3000 rally, PK Partnership have just returned from Japan celebrating their 20th event.

This year’s rally started in London’s Covent Garden with thousands of spectators turning out to see the cars leave and spot some faces attending the rally such as David Hasselhoff and Usher. The passion and enthusiasm of all participants is unprecedented, and the event is attended by largely skilled and experienced drivers with a desire for high performance cars.

Driver and insurance registration took place in London where Anjana and Fabio, the dedicated Gumball 3000 team at PK Partnership, were on hand to ensure all drivers and vehicles met the required level of insurance.

An eclectic mix of vehicles were entered into the rally including a Ferrari 288 GTO, Bugatti Chiron and David Hasslehoff’s KITT Pontiac Firebird.

The final destination was Tokyo, Japan via France, Switzerland and Italy, and this brought along a number of challenges from finding insurers who would cover different territories.

Gumball 7

There were a number of logistical challenges such as transporting the cars via air freight from Italy to Japan – no mean feat for more than 140 vehicles. Along the way there were a number of highs and lows, but PK Partnership were en route from London to Tokyo to ensure that any risk management obstacles could be overcome.

Once again the Gumball 3000 team created a truly world-class event.

Gumball 6

 

Amit Patel, Director of PK Partnership said, “we were delighted to insure the majority of the cars on this year’s rally. Hats off to Max and the fantastic Gumball team for organising such a spectacular event. Work has already started on planning the insurance aspect of next year’s rally.”

The rally and high net worth market is an important and specialist focus for PK Partnership. Our next adventure is next month on the Verve Rally starting at the prestigious London Home House private members club.

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