Inheritance Tax Planning
Capital Gains Tax
Capital Gains Tax (CGT) is payable in respect of sales of AIM stocks and any losses can be set off against losses in the usual way. The RSITP portfolio is managed from a CGT point of view exclusive of any other assets managed for the same client, either within Rensburg Sheppards or elsewhere.
Fair Dealing Policy
Normally shares are acquired or sold in small tranches for clients as and when the investment in the RSITP is made or withdrawn, for instance following the granting of probate. These transactions are put through the market without difficulty. However, from time to time, it is necessary to deal with relatively large quantities of stock on behalf of a large number of clients, for instance when the shares in a company are sold on its transfer to a full listing or acquisition. The resultant cash is then re-deployed as soon as possible in an alternative stock to preserve the IHT exemption. However, it is not always possible to deal out (or in) to a specific stock in one transaction due possibly to illiquidity in that company's share at that particular time. The Managers have therefore a policy of reviewing individual holdings of the particular stock and prioritising those clients with large residual cash balances or in the case of a partial sale of a stock those with larger weightings than would be recommended at that time. This may mean that some clients may pay either more or less than others for an individual stock as the market price may alter as each tranche is sold or acquired, even if the transactions take place over a relatively short time span.
Cash Balances
From time to time, usually as a result of the sale of shares or an accumulation of dividend income, there may be a substantial cash balance awaiting re-deployment in a replacement AIM stock or stocks. The cash balance may take some time to be utilised due to liquidity constraints and it should be noted that any cash balance will not qualify for BPR and therefore IHT relief, until it is reinvested in another company that meets the BPR criteria.
Interest
Interest will be paid on credit cash balances on a quarterly basis based on the prevailing Bank of England base rate.
| Cash Balance | Interest Rates |
|---|---|
| Under £5,000 | 3.00% below base rate |
| £5,000 - £10,000 | 2.25% below base rate |
| £10,000 - £25,000 | 1.50% below base rate |
| £25,000 - £50,000 | 1.00% below base rate |
| £50,000 + | 0.50% below base rate |
Interest is subject to Income Tax which will be deducted at source at the basic rate.
In the event that Base rate falls to 3% or less, the firm reserves the right to vary the rates paid on client deposits. However, the rates paid will be no lower than those in the above table and in any case will be no lower than 0%.
Charges
This forms part of our Agreement with you, as defined in our Terms and Conditions. Initial commission will be charged on the amount invested on the following basis.
| Amount | % |
|---|---|
| £0 - £100,000 | 2.0% |
| £100,000+ | 1.0% |
This means that for an investment of £250,000 a fee of 1.4%, or £3,500, will be paid to the Managers. Up to a further 3% may be payable to your IFA.
An annual fee of 1.5% of the portfolio value will also be charged. Your IFA may receive up to 0.5% of this annual fee as renewal commission. Your IFA should discuss with you the amount of introductory and renewal commission received from us. Annual fees will be charged quarterly in arrears in February, May, August and November. VAT will be added to the annual fee (but not the initial commission) at the standard rate.
Stock Exchange Levy
For certain UK transactions greater than £10,000 a Stock Exchange Levy will be payable. This levy funds the Panel on Takeovers and Mergers and will be shown as PTM Levy as a separate item on contract notes.
Contract Charges
All transactions will also be subject to a contract charge of £25.
Termination
No fees are charged on termination.
Stamp Duty
Stamp Duty of 0.5%, rounded up to the nearest £5, is payable on all certificated UK equity purchases.
Other Information
We collect all dividends and interest on your behalf and these will be reinvested in your portfolio. Alternatively, income can be paid into your bank account at regular intervals using the Bank Automated Clearing system (BACS). Dividends are subject to Income Tax.
You will receive half-yearly valuations and statements and contract notes will be sent to you following each transaction.
A Consolidated Tax Voucher is produced at the end of each tax year listing all dividends, interest and related tax credits received on your behalf. It replaces individual tax vouchers and is of benefit when completing your tax return.
We include a Full Nominee Service to ensure the prompt settlement of transactions at the best prices. Our nominee company is a member of CREST and saves the administrative work involved with direct ownership of shares. We are also able to take action on your behalf in respect of takeovers, rights issues and open offers.
Complaints and Compensation
If you wish to register a complaint, please contact The Compliance Officer, Rensburg Sheppards Investment Management Limited, The Plaza, 100 Old Hall Street, Liverpool, L3 9AB, or telephone 0151 227 2030.
If you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service.
We are covered by the Financial Services Compensation Scheme (FSCS). You may be entitled to compensation from the scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim. Most types of investment business are covered for 100% of the first £30,000 and 90% of the next £20,000 so the maximum compensation is £48,000. Further information about compensation scheme arrangements is available from the FSCS.
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