Do you want non investment personal financial advice ?
If you require non investment
personal financial advice then there a range of services we can offer you.
On this web site we give fuller details of some of these
services, and by clicking on the links below, you should find something of interest.
To contact us and ask for our services click here
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Before
entering into a personal loan, it is sensible to seek our advice. Not only
can the terms of any loan vary tremendously from lender to lender, whether
this be in relation to interest or whether the loan is secured or unsecured.
It can also be the case that some lenders will be much more sympathetic if
you hit repayment difficulties in the future. There can
also be taxation considerations. Loans for certain purposes can attract tax
relief, yet other purposes will not. It is sometimes the case that a client
plans to spend money on, say, acquiring a business asset, and, say, on a
holiday. It would be more tax effective to borrow money for the business
asset and use your savings to pay for the holiday, rather than the other way
round. The name of
the borrower can also be important, We recently had a case where a client was
granted a loan by his bank to buy a car. The bank had not appreciated the
taxation implications of making the loan out in the name of the client’s
company, and not to the client personally. If we had not intervened to
correct matters, our client could have faced a personal tax bill of over
£8,000. It is also
important that the loan is correctly structured. A loan repayable over 20
years is not the most appropriate loan to pay for a holiday. Conversely, a
loan repayable over 2 years is not sensible when the money is to be used for
property improvements that will last many years. There may
also be alternatives to entering into the borrowing. It might be more
sensible to sell an asset or investment of some kind to realise your own
resources, rather than entering into a loan that might cost more in the long
run. These are
all matters upon which Peter Brown & Co can help |
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Before
entering into a mortgage loan, it is sensible to seek our advice. The terms
of any mortgage can vary tremendously from lender to lender. Interest
rates can be very different and fees and ‘lock in ‘ charges can be
significant. The question of whether a ‘capped’ mortgage, where the interest
will not exceed a certain figure, or a ‘discounted’ mortgage’ where the
interest rate is a fixed amount below a variable market rate should be looked
at very carefully. This is a matter upon which professional advice is a good
idea, because a decision on which is preferable might be related to
projections in future interest rate movements. A
consideration should also be given to a ‘flexible’ mortgage. A flexible
mortgage is one which combines all your borrowings such as credit cards,
overdrafts, loans etc into one overall borrowing facility secured on the
property, and within the pre agreed limit you are able to draw on the
facility as and when you require. Such a mortgage can produce very
significant savings. It is also
wise to review the methods of charging interest – is it on a daily basis or
an annual basis? This can make a very great difference to the amount to be paid. It is also
important to consider the method of repayment. Should this be an investment
based repayment method, or a simple repayment of capital? Are you to be
allowed ‘payment holidays’, for example if you have a new addition to the
family? It can also
be the case that some lenders will be much more sympathetic if you hit
repayment difficulties in the future, so the choice of lender can be
important. There can
also be taxation considerations. Loans for certain purposes can attract tax
relief, yet other purposes will not. It is also
important that the loan is correctly structured. There may
also be alternatives to entering into the borrowing. It might be more
sensible to sell an asset or investment of some kind to realise your own
resources, rather than entering into a loan that might cost more in the long
run. Only when
all these matters have been considered, can a prospective borrower sensibly
survey the market place and seek out the form of mortgage that most suits the
purpose. These are
all matters upon which Peter Brown & Co can advise, and we can also help
to identify the lender that is most suitable. It is often the case that funds
might be available on a ‘wholesale’ basis to professional intermediaries at a
lower interest rate than would be available to the individual borrower. |
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Credit
cards are a very expensive form of borrowing, but on the other hand are very
convenient. Terms of
credit cards can vary greatly from one institution to another, and it is very
wise to read the small print. Some
lenders allow an interest free period on all transactions, but others may
only permit an interest free period on certain types of transactions. The
interest free period can also vary, and some lenders will allow interest free
periods for transfer of balances from other credit cards. It can
often be very wise to use a credit card for a purchase even when you have the
funds to pay in cash. You can still use the cash to repay the credit card
company. This is because under Consumer Credit legislation you are protected
in a way that does not apply to ordinary cash transactions. If an item is
faulty, or a service is inadequate, and if the item has been purchased with a
credit card, and the cost is more than £100 then a consumer has the same
rights against the credit card holder as they would have against the original
trader who supplied the goods or services. A trader might go out of business,
or be disinclined to meet his commitments. In such a case you can turn to the
credit card company for a remedy. They are obliged to compensate you, and it
is then up to them to seek redress from the trader. It can be
very tempting to allow credit card debt to escalate, because there are only
very small minimum repayments, but as credit cards are a very expensive form
of borrowing (typically an interest rate of 18% apr can be charged), it is
sensible to try to replace credit card borrowing by some alternative source
of finance. Peter Brown
can assist you with a financial review of your circumstances to see whether a
better way of arranging your affairs might be achieved. |
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Personal
banking ( or none business banking)
in the UK tends to be cheaper than business banking in the sense that
bank charges are often very much lower. Bank charges cover such things as the
fees for processing cheques and so on. However, personal banking tends to be
more expensive than business banking in relation to the interest charged on
overdrafts. Some banks,
such as Abbey National and the Halifax, specialise in personal banking, and
the specialist personal bankers tend to offer accounts free of bank charges,
and sometimes with quite low rates of overdraft interest. A personal
bank account provider is more likely to operate a bank account on a ‘cleared
funds’ basis, than would be the case with a business bank account. That is to
say that when a cheque is paid into the account, an account holder is unable
to draw against the cheque ( the technical term is drawing against ‘uncleared
effects’) until it has cleared through to the bank upon which it is drawn. In
reality, in the UK banking system, this should only take three business days,
but some personal bankers extend this period, without justification, for up
to one week or even ten days. Overdrafts,
( which are essentially a unique British phenomenon – in other countries it
can be a criminal offence to go into overdraft – the only alternative is to
negotiate a formal bank loan) are usually available to personal account
customers on an unsecured basis, up to a level based on personal circumstances. If a client
gets into difficulties with a personal bank account, Peter brown & Co can
advise the client about the position, but in general terms matters relating
to personal bank accounts tend to be a personal matter between the bank and
the client. If a cheque
is written on any bank account when there are insufficient funds ( or an
insufficient overdraft facility) to cover the cheque, then a criminal offence
under the Theft Act is committed, unless the underlying transaction was not a
commercial transaction ( for example a gift from one person to another). In
law, the recipient of a bounced cheque is entitled to sue on the cheque
regardless of any rights that might arise under the underlying contract for
the supply of goods or services. The bounced cheque itself is evidence of the
claimant’s rights. It should
be noted that anybody submitting a personal tax return should ensure that the
personal bank statements are carefully retained for 7 years following the end
of the tax year in accordance with the normal record retention rules, as the
Inland Revenue can call for the personal records. |
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Debit cards
are cards that can be used in a similar manner to personal cheques, provided
there are sufficient funds in the account to cover the transaction. They do
not create any borrowings on the card themselves. If they
bear a Visa or Mastercard symbol they can be used at any outlet where a
credit card can be used |
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Making a
will can be a very sound move, and it can be done very cheaply. There are
three essential reasons for making a will. These are :- 1)
If somebody
dies without a will ( ie intestate) the assets left at death are divided up
according to rules laid down in law. Those rules might well be different to
the wishes of the deceased. For example, a certain proportion goes to a
spouse, with the remainder being divided between children. The person who has
died might have wished to leave a legacy to others, or to reduce the
entitlement of his children. There can be some very unpredictable effects of
intestacy, particularly when remarriages and step children are factored into
the equation. If a husband and wife die in an accident, the elder is assumed
to have died first. The other will then get a share under intestacy rules,
which will then pass to their children under the same rules. If the man and
wife have only just married and both have been married before , this could
mean that a large part of the wealth of one partner goes to the children of
the other partner, and the children of the original wealthy partner are left
with less than everybody might have expected. Making a will overrides the rule of intestacy.
2)
If a will
is in place, an executor can start dealing with the estate fairly quickly.
For example, an insurance company might pay out quickly and that might help
survivors to manage in the short term. 3)
Inheritance tax comes into play when somebody
dies. Enormous amounts of tax can be saved by very simple and basic planning
of a will. A recent case of which Peter Brown & Co are aware saved over
£80,000 in tax simply because a client made a will in a cancer hospice three
days before his death. Perhaps not of great concern to him, but it was very
significant to his widow, who might live many more years. Careful estate
planning can help to ensure that the family of anybody who dies benefits,
quite legally, at the expense of the Inland Revenue. Making a will is
essential part of this process. It can take only a very short time to
make a will. In simple cases, this can be done for under £100 in solicitors’
fees and taxation advice fees. In more complicated cases it might be a little
more expensive, but the benefits far outweigh the costs. The actual procedure
is that we take the details of how you wish your estate to be divided up on
death. We look at the overall position and advise you of the most effective
way of achieving this within the tax laws, and then we let you have a report
which you can pass on to your solicitors as the basis for the drawing up of
the wills. Peter Brown and Co would be pleased to
assist in this very important area. |
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Pensions
legislation has altered many times over the years, and each individual’s
circumstances can vary , so that the precise state pension to which anybody
is entitled can be quite different from another person’s. That is why
you are entitled to ask the Department for Welfare and Pensions for a pension
forecast, stating what their computer predicts to be you entitlement.
Unfortunately, the Department can take many weeks before they respond, and
often they provide inaccurate information. However, it is worthwhile
obtaining a forecast, and checking the details they have on file for you. If
there is a discrepancy, you then have the opportunity to have it corrected before
you retire. |
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Our firm
has a number of clients who are solicitors. Also, it is inevitable from time
to time that our clients employ the services of a solicitor for a number of different purposes. That means
we have an extensive knowledge of the particular skills and expertise of different
solicitors. Some might specialise in criminal work, others in conveyancing,
and yet others in commercial law. We also
know what level of fees particular solicitors are likely to charge. Choosing
the right solicitor for the particular matter in hand can be a little hit and
miss without this background knowledge. This means that we are able to assist
our clients in choosing the solicitor who is best placed to deal with the
particular legal matter in hand at the most appropriate fee level. It used to
be the case that a barrister could only be instructed via a solicitor, but
our professional body, the ACCA, has entered into an agreement with the Bar
Council which now enables this firm to give instructions directly to a
barrister, where the matter concerned is one where we are acting
professionally for a client. Again, we would use our knowledge of the skills
of particular barristers, to advise our clients upon the most appropriate
barrister to instruct. |
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There is a
confusing array of State Benefits, and the law is constantly changing. Often, when
somebody enquires about their entitlements to various benefits and reliefs,
the Government departments involved give inaccurate or conflicting
information. It is therefore important to have the information checked by
somebody who has been trained in the benefits system This is one
area where Peter Brown & Co do not have a particular expertise, but trained Welfare Benefits Officers can
usually be found at any Citizen’s Advice Bureau, where a private and
confidential consultation can be obtained, free of charge. Often,
entitlement to benefits can be related to income, and when it has been
established what are your entitlements, Peter Brown & Co can then help by
working in association with the Benefits Welfare Officer to document your
income, particularly if you are self employed or in receipt of casual income,
when accounts might have to be prepared. |
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It can be a
common situation that people reach retirement age and find that they are cash
poor but asset rich. For example, a couple over retirement age may find they
own a house with substantial value, but are short of ready funds to live on.
One option might be to sell up and buy a smaller house, but this may be an
option that is either not desirable or not possible. This is
where equity release schemes can help. Free
information A free guide to equity release schemes is available from The Sunday Times, entitled ‘ Guide to Equity Release’ sponsored by Key Retirement Solutions. It is available by calling 0800 0855 755. Age Concern
have published a factsheet – Factsheet no 12 – Raising Income or capital from
your home, which is available from 0800 009966 or ageconcern.org.uk What is
equity release ? A typical equity release scheme would be available to homeowners aged 60 or over. The schemes operate by creating a mortgage loan over the home, or alternatively, by selling a percentage part of the home. The maximum loan depends on the age of the borrowers, and is generally about 20% of property values at age 60 rising to about 50% for a borrower over 80. The interest on the loan is not payable by the borrower, but is rolled up, increasing the amount of the loan, which is then repaid on death. In other words, it replicates the original meaning of a mortgage in earlier times when a mortgage was , as the name implies in Norman French, a gift on death. To avoid
the dangers that the debt that is repaid on death is not covered by the value
of the house, and so becomes a burden on the surviving family members, it is
essential the arrangement includes a ‘ no negative equity ‘ guarantee. In
other words, the lender promises that the value of the loan, plus rolled up
interest should not exceed the value of the home on death. Some
schemes allow the loan to be taken out in tranches or instalments, so that
living expenses can be met from time to time, yet reducing the amount of interest that is being rolled up, so
increasing the value that can be left to family members on death. The effect
of such a scheme on entitlements to state benefits should also be explored. There are
different forms that such schemes can take, and advice should be taken on the
one most appropriate for individual circumstances. These
schemes attracted bad publicity a number of years ago because of unscrupulous
arrangements that exploited vulnerable homeowners. For this reason, it is
essential that schemes are only entered into with companies who are members
of Safe Home Income Plans (SHIP). Ship has a code of conduct , and requires
independent professional advice, including legal advice. From 2004,
The Financial Services Authority will be regulating such schemes. How to get advice Advice on such schemes can be obtained
via Interalliance plc , with whom Peter Brown & Co has formal
arrangements. Interalliance plc are a national company of some
reputation and are authorised Independent Financial Advisors under the system
of regulation, and Peter Brown & Co would be happy to effect an
introduction to them, in accordance with an agreement for referrals in a form
acceptable to the Chartered Association of Certified Accountants. Peter Brown & Co offers no investment
advice on this website, but is happy to supply clients on request with
relevant extracts from the professional briefings of Interalliance plc, with
their consent, who are entirely responsible for their content. Interalliance can be contacted direct on www.inter-alliance.com. When
contacting Interalliance, please inform them that you have made contact with
them via Peter Brown & Co, so that you can take full benefits of our
professional relationship with them. |
Last revised 19/01/03