Acronyms Flashcards
Pros of limited company?
Can becoming limited put me in the LEAD-PLS
Legal entity
Employee
Aquire protection
Deductible contributions for business made to pension
Paid dividends
Low NIC
Salary sacrifice
Requirements of a loan
ATE
Arangment in place and reported
Taxable interest
Executors can demand payment/write off
Advantages of an investment bond
Invesment bonds are GASH-LINT
Growth potential
Attitude for risk and capacity for loss can be matched
Segments can be assigned
Hold jointly
Long-term care is not considered
Investment choices are wide
Non-chargable event on assignment
Tax on liability passes onto assignee
What is the core to most tax efficiency/retirement questions?
WICT PPP
Wills/LPAs/State benefits
Investment/savings
Cashflow
Tax efficient investing/fund choice/allowances
Pension contributions
Pension nominations
Protection and trusts
Benefits of ESG?
FIL yourself with ESG to remain longstanding and forward looking
Forward thinking
Investment in Promising areas
Long-standing funds are not better or worse.
Disadvantages of ESG
If you DRIVE Poor you be environmentally unsound and pay more charges
Difficult to screen
Restricted fund choice
Investment charges higher (actively managed)
Volatile (small/ medium-sized companies)
Expect less dividends
Poorer performance
Drawbacks of limited company
Limited limitations won’t make you HAPPY-D
Higher ongoing costs
Ability to borrow could be affected
ension contributions
Privacy diminished (accounts in public)
offPayroling rules
You’ll be expected to do more administration/reporting
Dividends can’t pay pension contributions
Benefits of diversification
MAN-GAP Divesify for a manly sized gap from risk
Match ATR
Avoids over exposure to a single asset
Non-corrolation of assets
Growth potential
Allows rebalance
Protection against inflation
Factors that affect risk tolerance
FACTORS-HI
A high number of factors affect risk
Finacial objectives
Age
Capacity for loss
Time horizon
Obligations
Risk attitude
Stability
Health
Investment experience
Benefits of pension sharing?
CLEANED and TIPD
Clean break
Lumpsum allowances kept separate
Enhancement for LSA/LSDBA can be applied for. (Hannah)
Any tax for Hannah at her marginal rate and avoids IHT in pension
No tax implications for Kabir
Entitled to remarry with no effect
Death of Kabir has no effect
Transfer or become a member of the scheme (Hannah)
Irrevocably passed on. No rights revert.
Percentage passed may be less than the attachment
Devides pension on divorce immediately
Pension sharing process
Best practice CASIM because losing his pension could kill him
Court order made
Award pension credit to Hannah
Send order to Kabirs scheme
Implement credit within 4 months
Member or transfer
Benefits of interest only mortage
If you want to allow growth and repay early TEAR up paying interest for tax and reduced outgoings
Tax efficient investments available
Early repayment possible
Allows growth on investments
Reduced outgoings
Disadvantages of interest only mortagage
Interest only has HARD Interest risk and is hard to remortgage because there isn’t much choice, so you better have advice and a savings vehicle.
Hard to remortgage
Advice required for monitoring and charges
Requires savings vehicle and temptation could lead to early withdrawal
Doesn’t have much choice on the market
Interest risk
Benefits of repayment mortages
MISC Benefits of repayment mortgage are micilanious
Market timing issues not a problem
Investment risk not a problem
Shortfall risk not a problem
Cheaper interest as time goes
AIM shares
AIM shares are HIGH RISC especially for regulatory and event
High risk
IHT free after 2 years
Growth potential high
High number of small companies
Regualtory risk and event risk (low regulation and reporting)
Income and dividends are possible
Some liquidity but might be low
Can be used in an ISA
