Your questions answered by an expert panel from Coopers & Lybrand

I have recently transferred shares into my wife's name as she is a non taxpayer. The shares were purchased under a company share option scheme (5 year SAYE). If my wife sells these shares do the Inland Revenue assume that the gain for calculating CGT liability will be the entire sum realised?

Transfers between husband and wife are deemed by the Inland Revenue to have, been made at no gain or loss. For subsequent tax purposes the recipient of the shares is deemed to have acquired the shares on the same date and at the same cost as the donor. In this case, therefore, your wife's base cost for calculating capital gains tax would be the price you paid for the shares under the share option scheme arrangement.

When is the best time in a month to withdraw Premium Bonds to make sure that I do not lose out in that month's draw.

Prize draws take place on the first working day of each month. If you are considering encashing your Premium Bond, then the sale could be made at the beginning of the month (but after the draw has taken place). Full details can be found in the booklet entitled Premium Bonds which is available from Post Offices.

Following on from a reply in the Independent (8 July) can you tell me how to find out what the indexation allowance was (and is) at any particular time. I understand it is based on the retail price index.

I would also like to know how to calculate a gain on a sale of units in a unit trust into which I paid a lump sum to start with and then instalments for several years I presume I average the cost out?

Capital Gains Tax calculations for shares held for significant periods of time are complex. If you are in the situation that you have owned these particular equities for a considerable length of time, we would suggest that you take advice - or do some research - before trying to calculate the capital gains tax liability.

You also asked how a gain should be calculated on the sale of units in a unit trust acquired by a lump sum to start with and then by instalments for several years.

The calculation for indexation relief in this case is quite complicated in that the initial lump sum and the individual instalments should be indexed separately. There is a concession whereby instalments which are regular monthly premiurns can be calculated by taking an annual indexation figure rather than having to index individual monthly instalments. I would strongly suggest that you either obtain a book which explains all of this in detail to calculate your gains or obtain some professional help.

RPI figures originate from the Central Statistical Office and can be found in a number of publications such as the Employment Gazette which may be found in some public libraries. But the most easily accessible reference source would probably be a book of tax tables, such as that produced by Butterworths Whlllans or CCH/Hardmans. A good book shop should be able to help.

Can you give me some basic advice on pensions? I am not in a company pension scheme. and I have read that more than 5 million people have contracted out of the state scheme. Should I?

You have to choose between the state earnings-related pension scheme (Serps) and a personal pension. The difference is that Serps gives an inflation-proofed pension regardless of stock market performance, while with a money purchase personal scheme your eventual pension depends on future investment performance.

Contracting out therefore only makes sense if, on the balance of probabilities, the personal pension is more than likely to produce a higher benefit. Even then, people who are not comfortable with the uncertainties of stock markets should think carefully before leaving SERPS.

Given the impact of commission and insurance company charges, contracting out is only likely to be of significant benefit to higher-paid people in their 20s and 30s who are comfortable with the uncertainties of the stock markets and prepared to take some investment risk.

Recently, I have read a lot in the press about the Office of Fair Trading's report on endowment mortgages. Just how bad a buy are they?

Ever since life assurance premium relief was abolished in 1984, the attraction of endowment mortgages has never been clear.

So much has been against them: the underlying investments are subject to income and capital gains taxes, commission can account for half the first year's premium, and surrender values can be to change. As, with all personal investment decisions,the basic rules remain: you should think very carefully before buying something accorded few tax advantages, which involves substantial upfront commission payments and which is inflexible if - for whatever reason - one's personal circumstances change over the 20 or so years of the policy.

I am five years from retirement but have changed jobs so many times that my pension will only be a quarter of my final pay.Should I pay additional voluntary contributions (AVCS)?

AVCs are generally seen to be an attractive way of saving for retirement because the contributions are tax deductible at your marginal rate and the investments are free of income and capital gain taxes.

But remember that the Revenue claws some of this back: the pension itself is ultimately taxable.The other drawback is that AVCs are not accessible in the case of a need for funds such as school fees or medical expenses.So you should look at AVCs as just one item on the retirement savings menu. Looked at purely from a tax perspective, Tessas, Peps (for 40 % tax payers) and certain no-frills National Savings products can give a return as good as that from AVCs as well as greater accessibility

I have just left employment and was thinking of investing my transfer value in a personal pension. However, with all the bad publicity I have been put off. Should I transfer?

You need to remember that the transfer value is the actuarial value of the amount required by your old employer's pension scheme to provide the pension when it becomes due.

Because actuaries generally calculate transfer values as investment in bonds, the argument has been that someone transferring could improve their pension if they invest in equities which hopefully will be higher performing. Central to the decision is understanding what investment return - net of charges such as the bid/offer spread and policy charges - is required to break even, and then assessing its achievability.

The golden rule remains that it is better to stay in one's old employer's scheme unless there are tangible reasons for transferring. When there are tangible reasons it is often the case that a new employers scheme can give as good if not better value than a personal pension.

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