Questions Of Cash: Can I replace stolen engagement gifts?

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The Independent Online

Q. I am a full-time university student, with Endsleigh student possessions insurance. Recently, jewellery worth £900 was stolen from my room. This includes engagement presents, given to me by my boyfriend's parents, which I need to have replaced so they never know they've been stolen.

Endsleigh has refused to meet my claim because I had moved rooms during the year - to a better room but in the same building, with the same street address. Even when I asked for the insurer to meet just half the claim, and when the local Endsleigh agent intervened on my behalf, the claim was still rejected. Can you help?
MM, London.

A. Endsleigh has now agreed to transfer your insurance cover to your new room and to treat your claim as if you had previously notified it of the move. As a result, it has replaced the engagement gift jewellery and sent you a cheque for £130 for the other stolen items, meeting your claim in full.

It is important in accommodation such as yours - where past keyholders may still have access to the building - to have insurance that covers you where a theft occurs but there has been no break in. You were sensible to take out such a policy but it is important to keep insurers informed of any change of circumstances they may regard as relevant.

Q. I returned a mobile phone to Orange in November 2003 that I had never used, within the permitted 15-day period for changing my mind. Orange said it never received it and after 13 months of correspondence, phone calls and the use by Orange of a debt collector, Orange sent me a letter of apology in January last year, confirming that full credits have been applied and that my credit status was repaired.

But when I recently obtained a credit check from Experian, I found that under "credit account information", there are details of this dispute.

Although my status history is all zeros, I am concerned. Does Experian have the right to show this information? And, despite the zeros, does this collection of information reduce my prospects of getting a mortgage and loans?
VC, Birmingham.

A. Experian says you gave permission for Orange to provide it with all information relating to your Orange account in the small print of your contract in November 2003. That agreement remains in place, despite the contract not being implemented in other ways when you returned the phone and cancelled the account.

Jill Stevens, the director of consumer affairs at Experian, says it is normal for companies to provide positive, as well as negative, experience of consumers for use in credit reference reports. This should provide assurance to lenders and service providers that an individual has a blame-free past record.

"So the presence of this information should be useful to the reader, as it shows any lender doing a credit check that he has met his repayments on this line of credit," she says. "The zeros signify no arrears. A long line of 0s is a very good thing to have." Further information on interpreting an Experian credit-record check can be found on its website, at www.experian.co.uk/learningzone.

Q. I read your answer to the reader who complained that Frizzell automatically renewed his motor insurance policy, using previously supplied credit card details, but without consent (Questions of Cash, 19 May). I have had a similar problem with the Post Office. It automatically renewed my car insurance when I had not requested renewal and had obtained a policy from another, cheaper, insurer.

As a result, my credit card account was excessively and unexpectedly large. To make matters worse, when I complained, the Post Office told me it could have beaten the other price if only I had told it about the cheaper quote at the time. I am so unhappy about this that I am no longer willing to pay for insurance by credit card.
HW, London.

A. The Post Office apologises to you, has cancelled the policy and issued a full refund. But it claims that when you took out the initial policy, you gave specific verbal approval to it making an automatic annual renewal from your credit card. It says it has a tape recording of this conversation, which you have declined to listen to. It adds that it only carries out automatic policy renewals where there is specific customer authorisation.

Q. I remarried last year and we live in my wife's home, so I sold my bungalow. I shall use some of the proceeds to buy a half share in the house but my wife intends to give £180,000 of that money to my three children in equal parts, so that, by the marriage, they do not lose anything they could have expected had I remained a widower. This has the effect of mitigating inheritance tax (IHT) on my own estate.

What are the tax implications? My understanding from previous answers in Questions of Cash is that we have to keep a record of such gifts but they are potentially tax-free and so do not have to be declared. Do the recipients have to declare them?
MC, by email.

A. Glenn Martin, a senior tax manager at Moore Stephens, says: "The gifts by your wife to your three children will be treated as potentially exempt transfers (PETs) for IHT purposes. If your wife survives seven years from the date of the gifts, the transfers are disregarded for IHT.

"Your wife should keep a record of the gifts but there is no reporting requirement, nor is there any reporting needed by your children. If your wife were to die within seven years of making the gifts, the value of the gifts become chargeable to IHT at the death rate of tax (40 per cent), subject to taper relief.

"The taper relief uses a sliding scale, reducing in stages from 100 per cent of the tax charge for deaths occurring between nought and three years after the gift is made, to 20 per cent in years six and seven, before the liability is gone.

"Your IHT mitigation will depend on how you and your wife's wills are drafted and how the property is held legally between you. You should seek further professional advice."

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