Member Update 10th January 2020
Written by Charlie Palmer on 09/01/2020

In the NHS Pensions flexibility consultation document what accrual options are proposed?

a) Anywhere between 20 percent and 100 percent in 20 percent increments

b) 0 percent, 25 percent, 50 percent, 75 percent and 100 percent

c) 50 percent and 100 percent

d) Anywhere between 10 percent and 100 percent in 10 percent increments

the correct answer is D


CMA fines Berkshire estate agents for fee-fixing. 

The Competition and Markets Authority has decided that four estate agents operating in the Berkshire area have breached the Chapter I prohibition of the Competition Act 1998 by price-fixing. It imposed total fines of over £600,000 on three of the estate agents, with the fourth benefiting from immunity from fines.

Beware price fixing!

Queen's Speech: business tax developments. 

The Queen's Speech was delivered on 19 December 2019. Announcements that may be of interest to business tax practitioners included confirmation of an increase in the R&D tax credit from 12% to 13% and a review of qualifying expenditure for R&D so that investments in cloud computing and data are incentivised.



Loan Trusts and collectives?

Traditionally loan trusts are pushed by Life offices and used in conjunction with Investment Bonds.  The great advantage of Investment Bonds, of course, is that they don’t pay income, and can be assigned for nil money’s worth.  You can also manage the assets inside the bond without incurring capital gains tax on the buy/sell. 

However you can also use other investments inside the trust.  

For instance accumulation units work well in an ETF and cut down the accountancy work required to keep track of dividends, by rolling the income up internally. 

This means you don’t have to hire an accountant.  

The settlor is only entitled to the loan under the trust as the growth is held for the trust beneficiaries.   Loan repayments will not affect the effectiveness of the trust.

The process is reasonably straightforward, as long as the income tax assessment on the settlor is accepted, otherwise you’re as well off to stick to investment bonds or non income producing investment trusts.

A loan can be made only in cash. 

This means that a loan trust cannot be set up with an existing investment (be it a single premium investment bond or collectives).   You have to sell and buy again inside the trust.  The trust is a new client. 

Loan trusts are simple inheritance tax planning, and particularly attractive where individuals may wish to retain access or change their mind in the future and make a gift.


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