A week in tax and politics
Sunday 30 March 1997
Clampdowns on PEPs, pension tax relief and a range of other tax breaks are all on Gordon Brown's hidden agenda, these financial experts would have us believe - all the more reason to act (for which read buy) now, they say. Well, maybe.
Certainly the panic tactics haven't worked yet. People aren't piling into PEPs in the numbers expected, suggesting investors are more worried about the stock market bubble bursting than what Labour might do to PEPs and tax on investments.
But hype aside, what wheezes are worth considering before the end-of- tax-year deadline on 5 April?
Buying a PEP with the stock market at its present level may well mean signing up to lose money this year. This may not be of great concern for those investing for the long term - say, a minimum of five years. Over this period the stock market should still be a better home for savings than the building society.
So if you're prepared to take these short-term risks and you're determined to use this year's PEP allowance then go ahead. But most people are probably better off waiting.
If Labour wins and decides to clamp down on PEPs then it might do something as early as June, but any earlier change is unlikely. In the meantime, PEPs will still be available and the stock market could be lower.
If you still want to go ahead this tax year - perhaps because you want to ensure you get at least two years' PEPs in before any change - then my recommendations for all but the professionals are as follows: for pounds 6,000 or less, the Legal & General UK Index Tracking PEP using its phased investment option. This will drip-feed your money into the stock market over the next year, which should benefit you if the market tumbles and then struggles to recover.
As well as a pounds 6,000 PEP, you can put another pounds 3,000 into a single-company PEP. These are often not worth the risks but Legal & General's Election PEP offers a relatively low-risk way of taking up this allowance. I covered both these deals in detail last week.
If you are sitting on big profits in a share portfolio and haven't used up this year's capital gains tax allowance, it is worth looking at selling this week (utility companies facing Labour's windfall tax might be good candidates), "bed-and-breakfasting" or even "bed-and-PEPping". Never mind what Labour might do, this is good financial housekeeping, full stop. And if you sell you'll also be less exposed to any stock market fall.
The argument for paying more into a personal pension before the end of the tax year seems weaker: unused allow-ances can be carried forward up to six years, and a Labour move to cut tax relief would be surprising given the consensus that people should be encouraged to make their own retirement provision.
Inheritance tax is an area where Labour has said it wants to close "loopholes". There is a pounds 3,000 tax-free annual allowance on gifts, which may be worth taking up. But this is a complicated subject that probably requires advice.
- 1 To those who can’t see the point of International Women’s Day: you are the very reason it exists
- 2 International Women's Day 2014: The shocking statistics that show why it is still so important
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Orgasm machine to deliver climax at the push of a button
- 5 Liam Neeson turned down James Bond role because late wife Natasha Richardson said she wouldn't marry him if he took it
Apple's Tim Cook: Business isn’t just about making profit
Thousands of young people forced to go without food after benefits wrongly stopped under 'draconian' new sanctions regime
Ukraine crisis: New navy chief 'defects' and surrenders Crimean HQ as Putin claims ultranationalists forced intervention
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
iJobs Money & Business
£12000 per annum: Inspiring Interns: The company works with Tier 1 FTSE 100 Ba...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...
Day In a Page
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square
A charming four-bedroom house overlooking Burleigh Square Park, close to Thorpe Bay
A three-bedroom farmhouse with a large inglenook fireplace and exposed beams
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew