As a way of saying thank you to our longstanding members, we've negotiated a package of special offers exclusively for ICAEW life members. From holidays and half-price golf outings to foreign currency and financial planning advice, our range of offers are a great way to help you enjoy your retirement.
- Free membership of the Charity Finance Professionals Community
- Library services and access to the latest information
- Access to business and accountancy resource and research services
- Use of the Business Centre at Chartered Accountants’ Hall
- Confidential advice and support helplines
It is hard to believe that the Individual Savings Allowance (ISA) is nearly 20 years old. What started as a simple cash savings plan of £3,000 per annum tax-free, has transformed into a myriad of options available today. The ISA now has many forms and reincarnations and there is one for nearly every saver; it is one of the best places to stash some of your cash.
The investment limit for 2018/2019 is £20,000 per adult individuals and you can split this between a cash ISA and a stocks and shares ISA. If you haven’t used up your maximum allowance yet this year, make sure you top up before 5 April as your allowance doesn’t roll over to the next tax year. So use it, or lose it.
Tip Everyone should consider an ISA even if it’s just a basic cash ISA to dip into when you need ready cash. You should look around and compare ISA rates each year as they can be very stingy. If you wish to leave your money there for a few years, consider a stocks and shares ISA instead.
The ISA family has grown considerably since 1999 and there are now several other ISAs to consider:
Help-to-buy ISA (HTBI)
The Help-to-buy-ISA is a good option for first-time buyer savings for their first home. You can get a 25% cash bonus from the government on savings made into a HTBI up to a maximum of £3,000. You can initially pay a lump sum of £1,000 and then regular payments of £200 per month. You can save more but the bonus is capped at £3,000. This ISA can be opened up to 30 November 2019 and can be used on first homes worth up to £250,000 or, in London up to £450,000.
You can only have one HTBI and the rules say you can’t pay into a cash ISA and a HBTI in the same tax year. However, several providers allow ‘split ISAs’; they put a HTBI and a cash ISA in the same wrapper effectively allowing you to have both. This option is great for those who’ve already opened a cash ISA this tax year, as you can transfer it in and use some for Help-to-buy. Remember, your maximum ISA allowance per tax year is £20,000, so your combined ISA savings (the combined amount you put into all your ISAs) can’t exceed this.
This allows a spouse or civil partner to inherit the savings in an ISA belonging to their deceased loved one without losing the tax benefits on it. Say you had saved £50,000 into your ISA, when you die your spouse will be able to make an additional contribution to their ISA of up to £50,000, in addition to their own ISA allowance for the year.
When this was introduced in December 2014. HMRC said approximately 150,000 married ISA holders die a year but figures show that perhaps only one in ten people are claiming this. As many couples have saved from joint income, this allowance can help secure the financial future of bereaved individuals. The allowance must be used within three years of the date of death, or 180 days from the completion of the administration of the state, whichever is the later. You don’t have to wait for probate. This allowance is not that well known in the banking sector so do take advice if you think you are eligible.
The Lifetime ISA (LISA) has been available since 6 April 2017 to any UK resident aged between 18-39 but LISA hasn’t made much of an impact, with only one provider offering them at the launch; more are coming on stream in 2018/19. Even with that limited choice, £1,000 annual tax-free cash is worth having.
Eligible savers can contribute up to £4,000 per tax year. The government will then add a 25% bonus at the end of each tax year in respect of the contributions paid. For those savers in the scheme already, there was a bonus in April/May 2018 and then it will be added monthly. You earn interest on the cash in the LISA and you get the bonus on the contributions made, not the growth made by interest or stocks and shares.
If you withdraw your cash from the LSIA before you are 60, other than to buy a first home or in exceptional circumstances such as a terminal illness, you will lose the government bonus. You can split your £20,000 ISA allowance: £4,000 into the LISA and the remaining £16,000 into a cash or stocks and shares ISA. You can have a HTBI and a LISA, but there are a lot of rules around the property bonus so do take advice.
Tip If parents funded the maximum LISA contribution of £4,000 per annum for seven years for their adult child, it would cost them £28,000. That could cut their Inheritance Tax (IHT) bill – levied at 40% by £11,200. So, the net cost to the family would be £16,800 but the Government top-up of £1,000 for every £4,000 put into the LISA would lift the savings value to £35,000 without investment growth.
A comparison of LISA and HTBI
Lifetime ISA (for home purchase) Help-to-buy ISA Max qualifying contribution £4,000/year
£2,400/year (£3,400 in year one)
Lump sums? Yes No, need to save monthly Max bonus? £33,000 (assumes max contribution every year from 18-49)
£3,000 (assumes max contribution over four years and eight months) When’s the bonus added? First year’s bonus was added in April/May 2018; after which it’s added monthly On completion when you buy a home
Investment option too?
Yes, via Stocks & Shares LISAs No, cash savings only Max property price?
£250,000 (£450,000 in London) How quickly can you use it?
Once the LISA has been opened 12 months
Once you’ve saved £1,600 (can be done in a minimum of 3 months) Who can open it?
Anyone aged 18 to 39
Any first-time buyers aged 16+ What can it be used for?
The home and mortgage deposit Just the mortgage deposit Can I withdraw money if not buying a home?
Yes, at age 60+; if earlier you don’t get the bonus and will pay a penalty
Yes, at any time, you just don’t get the bonus
Introduced in 2016, this is a basic ISA which allows you to withdraw and replace money from your ISA. Sounds simple enough, but if you had saved £20,000 into a traditional ISA, and then had to withdraw £5,000 for an emergency, you would not be able to put that £5,000 back into your ISA for that tax year. This is because you had already contributed the full £20,000. The Flexible ISA gets around this, so, if this applies to you, check with your ISA provider that your ISA is eligible. If not and it’s something you will do often think about switching to a provider of a flexible ISA.
Innovative Finance ISA
An Innovative Finance ISA (IFISA) lets you put your savings with peer-to-peer lenders or invest in companies through crowd funding websites. This is not covered by the Financial Services Compensation Scheme.
ISA limit is £20,000 for 2018/2019 Ways to use your ISA allowance
Stocks & Shares ISA Lifetime ISA (aged 18-39) Cash ISA Innovative Finance ISA Total 2018/2019 ISA allowance Invest in Stocks and Shares ISA only
£0 £0 £0 £20,000 Invest in a Lifetime ISA only
£4,000 £0 £0
£20,000 Invest in a combination of ISA types
Split your allowance across ISA types however you choose, as long as the combined amount doesn’t exceed £20,000 and you don’t put more than £4,000 in a Lifetime ISA. £20,000
Invest in a Cash ISA only
Invest in an Innovative Finance ISA only
Junior ISA (JISA)
The Junior ISA can be opened by a parent or guardian for anyone under 18 who lives in the UK and the annual limit that can be invested is £4,260 in 2018/19.
There are two types of JISA: a cash JISA, a savings account where there is no tax interest on the cash saved, and a stocks and shares JISA, where the cash is invested and there is no tax on any capital growth or dividends received.
Children are taxed just like adults and, just like adults, that means that if they have no other income, they can earn up to £17,500 a year from savings without paying tax on it (that’s the £11,500 personal allowance +£5,000 starting savings allowance +£1,000 personal savings allowance).
So why have a JISA?
- You want to lock away the cash until they are 18? A good saving plan to send them off to university with?
- If the money is given from parents, the child can only earn £100 per parent per annum from it in normal savings; any more is taxed on the parent at their marginal tax rate.
- JISAs usually pay more than normal savings accounts.
Tip Some of the best paying JISAs offer cash rates of 3.25% so it is worth encouraging grandparents and other family members to contribute to your child’s JISA. In doing so the grandparent is moving money out of their estate for IHT purposes which could be exempt if certain conditions are met.
Tax Free Savings – the Personal Savings Allowance
Since 6 April 2016 almost all savings interest has been paid without deduction of tax. The first £1,000 of interest earned on savings has been tax free for basic-rate taxpayers (£500 for higher rate taxpayers). Additional rate (45%) tax payers do not benefit from this tax-free allowance.
Any interest you earn from bank accounts, savings accounts, credit union accounts, building societies, corporate bonds, government bonds and gilts is covered. This includes interest earned on other currencies (e.g. US dollars, euros) held in UK-based savings accounts. It is extremely beneficial; a basic-rate tax payer could have almost £80,000 of savings in an account paying 1.3%pa and pay no tax at all on the interest received. A higher-rate payer could have savings of almost £40,000 tax free.
Beware if you are close to the higher-rate tax threshold (the higher rate of tax starts on income above £46,350 in 2018/19 tax year for England, Wales and NI, and £43,431 for Scotland). Say you earn $45,349 plus £1,000 in savings interest; as your total income including interest is above the higher-rate threshold you’ll only get the £500 Personal Savings Allowance (PSA). So, £500 of your interest would be tax-free, while the remaining £500 would be taxed at the higher rate.
Tip Basic-rate taxpayers over the PSA limit. For every £100 interest you earn in normal savings you only get £80, whereas in an ISA you get the full £100. Therefore, the normal savings rate would have to be 25% higher for it to beat a cash ISA.
Higher-rate taxpayers over the PSA limit. For every £100 interest you earn in normal savings you only get £60, whereas in an ISA you get the full £100. Therefore, the normal savings rate would have to be 66% higher for it to beat a cash ISA.
Top-rate taxpayers: For every £100 interest you earn in normal savings you only get £55, whereas in an ISA you get the full £100. Therefore, the normal savings rate would have to be 82% higher for it to beat a cash ISA.
Use all your reliefs
There are attractive income tax reliefs (of between 30% and 50%) available for investments in Venture Capital Trusts (VCT). Seed Enterprise Investment Schemes (SEIS) and Enterprise Investment Schemes (EIS). Individuals can get up to £60,000 income tax relief via a VCT, £50,000 from a SEIS or £300,000 from an EIS or Social Investment Tax Relief (SITR).
The SITR offers tax incentives for investment in share or loan instruments issued by social enterprises. From 6 April 2018, the maximum investment in ‘knowledge intensive companies’ which will qualify for tax relief increased from £1m to £2m, with certain provisos.
Everyone has a Capital Gains Tax (CGT) free allowance of £11,700 in 2018/19.
- If you haven’t realised gains of this amount, take a look at whether you have any assets that could be sold before 6 April 2019.
- If you have used up your allowance, consider deferring selling assets until the next year.
- If your spouse is not a higher rate income tax payer, gains on assets transferred to them will only attract tax at the lower 10% CGT rate (with the exception of residential property) to the extent of their unused income tax basic rate band.
Tip If you have substantial investments, take advice to see if it is possible to restructure them so that they produce either a tax-free return or a return of capital taxed at a maximum of only 20% under CGT, rather than income tax at up to 45%.
This article was first appeared in Tax Planning Tips 2018: For Individuals by Mazars Financial Planning Ltd.
Buying wines ‘En Primeur’
It is not a very complicated process, nor is En Primeur the preserve of the rich and famous, but a method of buying claret relatively cheaply for enjoying in the years to come - open to all comers!
There are three stages to buying En Primeur:
You buy the wine as and when the Châteaux release it over the two months or so of the campaign and invoices are payable immediately. The invoices are for the cost of the wine under bond (tax free) in London. Theoretically, it is unlikely that they will ever be available again at lower prices than those first offered.
The Classed Growths will be shipped in bottle or Magnum when they are physically released by the Château, in the Spring and early summer three years after the vintage, and will be delivered into a bonded warehouse. You will then be charged storage and insurance at the prevailing rate until such time as you want to take delivery.
To take delivery and finally hold the bottles in your hands, you will need to pay the duty on each case and VAT on the original cost of your wine, storage, insurance and, believe it or not, on the duty as well!
ICAEW life membership
Enjoy exclusive offers and discounts as a life member - including discounts on fine wines from Jascots.
Care home fees – a daunting prospect
Funding long term care is an issue that more and more will have to face. There are however good sources of sound advice available to help you through the minefield. This brief article deals with financial and legal matters to consider in additional to the task of assessing care needs and finding a suitable care environment. The following are not exclusive but provides ideas of the scope of research and enquiry that should be considered:
Reeves Financial Planning Limited is a Chartered Independent Financial advice firm; their representative Paul Howson is a Chartered Financial Planner and member of SOLLA. For independent advice and an initial consultation please call 01227 768231.
ICAEW life membership
Enjoy exclusive offers and discounts as a life member - including a free financial planning consultation from an FSA-regulated financial planning firm.
Enterprise Investment Schemes
ICAEW life membership
Enjoy exclusive offers and discounts as a life member - including a free financial planning consultation from an FSA-regulated financial planning firm.
An introduction to financial planners
A financial planner can add value as well as provide reassurance to those who are entering a new phase in their life, notably retirement.
The following provides some guidance on a number of different areas which those looking for a financial planner should consider.
ICAEW life membership
Enjoy exclusive offers and discounts as a life member - including a free financial planning consultation from an FSA regulated financial planning firm. Find out more
Life member offers and discounts
London: culinary cosmopolitanism
For a sense of London's distinctive, eclectic dining scene we might begin with the old markets by the Thames. At Borough and at Billingsgate, London has received traders of produce from around the world; if distribution habits have changed, the spirit of receptivity hasn't. The cultural and culinary diversity in this vivacious capital city plays testament to this old and ongoing co-relation between food and free trade.
From down-to-earth pie and mash to five-star haute cuisine, in London you're never going to be without some excellent dining options. Some of the country's finest venues call the capital their home, and of course quality British cuisine is top of the menu.
Whether you're grabbing a curry on Brick Lane, trying out an old Venetian recipe in Soho, or a Lebanese five-spice lamb in Piccadilly, when dining out in London you're certainly in for a real culinary treat.
ICAEW life membership
Enjoy exclusive offers and discounts as a life member - including money off your restaurant bills with a Gourmet Society card.
Pensions: avoid the traps
Pensions have long been an integral part of people’s financial planning. Their primary attraction has been the range of tax breaks available, compared to other forms of saving or investment.
However, people are increasingly likely to find they have unwelcome tax liabilities when they fill out their annual tax returns or come to take their benefits.
Here’s an overview of the advantages and tax traps of paying into a pension scheme. It highlights the importance of reviewing your pension arrangements regularly.
Smith & Williamson LLP
Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International. The word partner is used to refer to a member of Smith & Williamson LLP.
Smith & Williamson Financial Services Limited
Authorised and regulated by the Financial Services Authority
Thoughts on Inheritance Tax and how to reduce it
However, we can make both small and large strides to reduce the amount of inheritance tax (IHT) our families pay.
Tips on how to increase your fuel economy
Fuel prices, the chance of petrol shortages and the ever-growing focus on sustainability make greener and more economical driving a priority for motorists. Making your tank go that extra mile will help you reduce costs and also ensure you get more for your money. Of course, driving more efficiently also results in less carbon coming from your car and less environmental harm.
So, how do you make your fuel go further?
Lost Luggage Protection
- TRACE ME Smart ID prevents airline luggage from being lost for ever
- Globally effective, Personalised, Simple and Secure
- A 3-month free trial for all Association members
- An exclusive 50% discount on ongoing cover
Every year over 1 million bags go missing at airports globally, and are never returned to their owners. Attaching a TRACE ME Smart ID luggage tag helps prevent that happening to you. Integrated with the SITA WorldTracer global baggage tracing system, your Smart ID will work at virtually all airports and airlines around the world. It’s secure, anonymous and provides you with complete peace of mind when you travel. No moving parts or batteries, always works where RFID, GSM or GPS signals are compromised.
If your bag doesn’t arrive, TRACE ME can prevent it being lost for ever, and can help bring it back to you faster.
Full details can be found at tmlt.co.uk.
This offer has two parts:
- All ICAEW members get access to a FREE downloadable trial offer, featuring our Self-Print Smart ID, use it for 3 months on us, totally free of charge, with no obligation.*
- For ongoing protection, you can get 50% off when you purchase any TRACE ME Smart ID pack. These include a durable luggage tag with 12 month renewal membership and our USD $500 Product Performance Warranty.
- Normally a single pack is £12.50 incl VAT, members can get one year’s peace of mind for just £6.25 plus P&P.
- Looking to cover your whole family? Or increase the membership length? There are better value multi-packs available in the online shop.
How to Redeem This Offer
- Get your FREE Self-Print Smart ID. Your personal Self-Print Smart ID will start downloading automatically.
- To claim your members-only annual membership upgrade, purchase online and enter promo code PHN50 at checkout. You can use this promo code for all TRACE ME products.
Terms and Conditions
Sales Terms and Conditions are available on our website at www.tmlt.co.uk
* Please note the Self-Print Smart ID is valid 3 months only and it does not carry the Product Performance Warranty. **Provider price promise terms and conditions: We will refund the price difference and pay a further £10 in compensation, if your alternative quotation is provided in writing, including submission of the providing competitor’s terms and conditions, within 14 days of purchasing your Trace Me Luggage cover.
The lost luggage cover must be for an annual term of cover only, offer the same or better cover than the cover purchased through Trace Me Luggage and the premium payable must be displayed on the provider’s direct website.
Any amounts refunded to price match the cover will be limited to the difference between the discounted cover you have already paid for your Trace Me Luggage cover and the price displayed on the competitor provider’s direct website, prior to any discounts and promotions, for the same level of cover or better.
To be valid, a claim for a refund must be presented in writing to: Parliament Hill Limited, 127 Cheapside, London, EC2V 6BT or emailed to firstname.lastname@example.org within 14 days of purchasing your Trace Me Luggage cover.
Claims for refunds after 14 days of your Trace Me Luggage cover date will not be valid.
This price promise may be withdrawn at any time at our discretion.
Only one refund claim can be made per household against Coverage.
This price promise is valid until 1 April 2020.
We realise that it is becoming increasingly easy to find ‘competitive’ deals and offers through work or on the internet. That’s why the collective buying power of the membership has been harnessed to bring you, wherever possible, prices which we believe are very hard to beat.
You will find that many of the benefits will bear a price promise stamp:
*National price promise - you should be getting the best possible rates in the UK, for this product or service.
**Provider price promise - you should be getting the best possible price / deal that this company makes available.
Although there will of course be exceptions, it is our intention to ensure that members can always access the very best prices available. And if we are ever wrong, we will do our best to make sure that you end up with the best rate and something extra in recognition of your time. (Terms and conditions apply on a written like-for-like basis.)
Terms and conditions apply to all offers. See individual offers for details. Offers and prices subject to change.
Calculate how much you could save
Use our handy savings calculator for an example of how much you could save with your life member offers and discounts.
Keep up to date
Make sure you update your communications preferences to keep up to date with our latest life member offers throughout the year. Select ‘Life member offers’ under the ‘Business services and member offers’ section.
How to become a life member
When you become a life member you will receive a life membership welcome pack, containing all the information you need to take advantage of your offers and discounts.
|How do I apply?||You can select to become a life member when you do your next annual membership renewal or you can call us now on +44 (0)1908 248 250.|
|Am I eligible?||
If you are fully retired, aged 60 or over and have been an ICAEW member for 30 years or more, you can become a life member by paying a one-off life membership fee of £600.00 (1.5 times the standard annual subscription).
Life membership is free to retired members aged 75 and over, or those who have been a member for at least 50 years.
Life membership will be granted to eligible members, provided that all remunerated business and professional activities have ceased and that a practising certificate, if held, is surrendered.