J’AIME MARCH/APRIL 2024

FINANCE
ADVERTISING FEATURE
Wealth Matters
A BI-MONTHLY LOOK AT THE WORLD OF FINANCE FROM LICHFIELD
FINANCIAL ADVISER KEVIN JENKINS APFS, CERT CII(MP)
TAX YEAR END PLANNING
Firstly, as we close in on the end of the tax year, planning
is worth considering. The tax year ends on the April 5th
each year and many tax allowances are lost if not used by
this date.
Among these allowances is contributions to an Individual
Savings Accounts (ISA). This allows each individual to
invest £20,000 in either a Cash ISA or a Stocks and Shares
ISA. Returns are free of income tax and capital gains tax,
where applicable.
It is also important to look at whether a pension
contribution is suitable. Dependent on an individual’s
income it could be possible to make a contribution of up
to £60,000. It is also potentially possible to use unused
allowances from previous tax years, going back three tax
years, though the current year allowance must be used first.
In terms of inheritance tax, the annual gift exemption
of £3,000 is a useful way to reduce the potential of
inheritance tax on an individual’s estate. It is also possible
to use the previous tax years allowance, where this hasn’t
been used. Inheritance tax is charged at 40% above the nil
rate band and residence nil rate band (if applicable), which
will vary from person to person.
There are other tax allowances that can be used to benefit
individuals depending on circumstances and seeking
professional advice can add substantial value.
PROTECTING YOUR ESTATE FROM
INHERITANCE TAX
If affected by Inheritance Tax then there are a myriad of
options to help protect the wealth you have built up to pass
on as much of it as is possible.
Naturally, you can do nothing and allow your heirs to pay
any tax liability due and that will be the default position
for those who don’t make plans to navigate this tax, often
called a tax of choice.
Someone famously said, tongue in cheek, that those who
don’t plan must trust the tax man more than their family/
heirs.
Having advised clients for more than two decades I am
always quizzed about a little extra return or slightly lower
charges, whilst the spectre of 40% inheritance tax looms
where no planning is undertaken. In other words, making
a little more each year can be scuppered by this large tax
threat.
WHAT ARE YOUR OPTIONS?
For most, gifting means loss of assets they need in
retirement. Ignoring the exemptions then generally
surviving seven years will make gifting inheritance tax
effective.
Using the annual exemption of £3,000 and the most
underused, ‘gift out of ordinary expenditure’ is the first
place to start. The latter allows a regular gift each year and
the seven year rule should not apply provided the gift is
affordable and from excess income, which doesn’t affect the
ability to cover ordinary expenditure.
Among many other options are insurance to cover a
liability, various trust solutions and reviewing the treatment
of existing pension and death in service/life insurance
death benefits.
Many assume the latter are Inheritance tax exempt,
though generally in the absence of planning, death benefits
fall to a spouse/civil partner and form part of their estate
for inheritance tax purposes. There is NO inheritance tax
on assets passed between spouses/civil partners.
IN CONCLUSION
It makes sense to discuss with the family your aims and
objectives and seek professional advice to determine what
your options are to protect your assets from various risks
including taxation.
The value of an investment with St. James’s Place will be
directly linked to the performance of the funds you select
and the value can therefore go down as well as up. You
may get back less than you invested.
An investment in a Stocks and Shares ISA will not provide
the same security of capital associated with a Cash ISA.
The levels and bases of taxation, and reliefs from taxation,
can change at any time and are generally dependent on
individual circumstances.
Trusts are not regulated by the Financial Conduct
Authority.
Please note that St. James’s Place does not offer Cash ISAs.
Kevin M. Jenkins APFS, Cert CII(MP)
Chartered Financial Planner & Director of Jenkins & Co Financial Management Ltd
M. +44 (0) 07795 172000 - T. +44 (0) 345 430 1475 - E. kevin.jenkins@sjpp.co.uk - www.jenkinsandcofm.co.uk
Jenkins & Co Financial Management Ltd is an Appointed Representative of and represents only St. James’s Place Wealth Management plc
(which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management
products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products.
SJP Approved 04/03/2024
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