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.

Start your day with The Independent, sign up for daily news emails
New Articles
tvDownton Abbey Christmas special
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
News
news
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
i100
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
Japanese artist Megumi Igarashi showing a small mascot shaped like a vagina
art
News
The Queen delivers her Christmas message
newsTwitter reacts to Her Majesty's Christmas Message
Arts and Entertainment
tv
Life and Style
fashion
Finacial products from our partners
Property search

Simon Read: The point of having protection insurance? The right cover can help reduce your financial concerns at a time of extreme worry

In May Nicola Groves got a massive shock. The 45-year-old mother of two was told, bluntly, that she had breast cancer. "When I heard the words, 'You do have breast cancer and you are going to lose your breast', I felt as if time stood still," she says.

Mark Dampier: Maybe boom, maybe bust, but we'll probably just muddle along

It's that time again when the media looks back over the past year and forward to the next. I am reminded of an old film, The Day the Earth Caught Fire (1961). Near the end of the film a newspaper prints two headlines – which one it uses will depend on whether the world is saved or doomed.

Sainsbury’s sank 7 per cent to 234p; Tesco fell 3.2 per cent to 180.2p ; and Morrisons dropped 5 per cent to 159.9p

Money Insider: Supermarkets: the real challenger banks

The supermarket banks have always excelled at offering simple, no nonsense products, and savings accounts is another area in which they fare well

Pat and Richard Astbury at their home in Norton Canes, Staffordshire. They have benefitted from the Community Energy Project aimed at helping council tenants with their energy bills. They have had solar panels installed.

Locals in Staffordshire to save hundreds after new council-backed project to install solar panels

The sun is shining on people who struggle to heat their homes and it’s thanks to a sense of community

Gross household debt reached a historic high of around 160 per cent of combined incomes in 2007

Simon Read: Give people struggling with debt some breathing space

Struggling people need help, understanding and forbearance, not ill-thought-out pronouncements

A person walks through the City of London during the early morning rush hour in London

Simon Read: Caught up in the scandal about leaks at the regulator

You won’t find me bashing the banks for the sake of it, but sadly they’ve deserved all the criticism that’s been sent their way in recent years

There were around 750,000 victims of mobile phone theft in England and Wales last year, according to official figures

Money alert: Stolen mobile phones

Gillian Guy, chief executive of Citizens Advice: 'The injustice of shock bills for crime victims must end. The Government must stand up for consumers and cap bills from lost or stolen phones at £50'

Indian workers boil sugarcane juice to make jaggery, a traditional cane sugar, at a jaggery plant in Muradnagar, Uttar Pradesh's Ghaziabad district

Mark Dampier: A hot investment story is taking shape as India lets the light in

Stirring the pot: the Indian Government’s reforms of labour rules offer hope of a brighter future for businesses 

An AA patrol man helping a woman whose scooter had broken down.

Bargain hunter: Whisk up those leftovers instead of just throwing them in the bin

Knight of the road, look out: you’ve got a new rival 

How to raise money for charity this Christmas

There are so many ways you can raise money - and awareness - for charity. Rob Griffin explains how easy it is to donate and reap financial rewards

Simon Read: The Chancellor has stamped on an unfair tax. But will the delight of homebuyers mean misery for others?

Were you surprised by the sudden reform of the rules for stamp duty on property purchases? I certainly was. I've been calling for ages for a change in the tax to make it more fair – and, at a stroke, George Osborne did just that on Wednesday in his Autumn Statement.

Santander, whose ads have been fronted by the Olympic gold medallist Jessica Ennis-Hill, was among the banks where there were potential pitfalls with shared licences

Best savings rates are not all they might seem

Consumers can sometimes think they are shopping around for a rewarding account when in one important aspect, writes Samantha Downes, they are not
The sunlit uplands: switching out of a final salary pension may seem like madness, but there could be cases where it makes sense

Gold-plated pensions – the key to retirement freedom?

With some people are weighing up whether they will be better off cashing in their final salary pension next spring, Samantha Downes asks the experts

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Selby Jennings: Oil Operations

    Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

    The Jenrick Group: Night Shift Operations Manager

    £43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

    SThree: Trainee Recruitment Consultant - LONDON

    £20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

    Day In a Page

    A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

    Christmas without hope

    Gaza fears grow that conflict with Israel will soon reignite
    After 150 years, you can finally visit the grisliest museum in the country

    The 'Black Museum'

    After 150 years, you can finally visit Britain's grisliest museum
    No ho-ho-hos with Nick Frost's badass Santa

    No ho-ho-hos with Nick Frost's badass Santa

    Doctor Who Christmas Special TV review
    Chilly Christmas: Swimmers take festive dip for charity

    Chilly Christmas

    Swimmers dive into freezing British waters for charity
    Veterans' hostel 'overwhelmed by kindness' for festive dinner

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

    'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

    Yazidi girls killing themselves to escape rape and imprisonment
    Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

    Ed Balls interview

    'If I think about the deficit when I'm playing the piano, it all goes wrong'
    He's behind you, dude!

    US stars in UK panto

    From David Hasselhoff to Jerry Hall
    Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

    Grace Dent's Christmas Quiz

    What are you – a festive curmudgeon or top of the tree?
    Nasa planning to build cloud cities in airships above Venus

    Nasa planning to build cloud cities in airships above Venus

    Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
    Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

    Clocks, rifles, swords, frogmen’s uniforms

    Surrounded by high-rise flats is a little house filled with Lebanon’s history
    Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

    Four months after the bombardment, Gaza’s wounds are yet to heal

    Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
    Gastric surgery: Is it really the answer to the UK's obesity epidemic?

    Is gastric surgery really the answer to the UK's obesity epidemic?

    Critics argue that it’s crazy to operate on healthy people just to stop them eating
    Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

    Homeless Veterans appeal: Christmas charity auction

    Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
    Pantomime rings the changes to welcome autistic theatre-goers

    Autism-friendly theatre

    Pantomime leads the pack in quest to welcome all