Savings and Investments thread

Diebythesword said:

Rob7Lee said:

Diebythesword said:

Rob7Lee said:

Well the markets continue to do well, is it now time to bank some more profit, especially US? I’m exactly 18 months away from being able to access my pension which is riding at an all time high by some margin….. surely the orange man is going to do something stupid again soon to spook the markets and a drop will come……

Expecting a pull back at some point, but not a bear market. Currently on the waiting list for a t212 SIPP, has anyone else managed to get one and how long did it take from waitlist to having the SIPP? Hopefully when I’m transferring it will be when the dip happens….

I have a T212 ISA but am probably going to switch out. Tried to draw some money when buying a car which was stopped and they wanted all manner of paperwork to prove what I needed MY money for. At one point refused to release the money to me and only the car dealer. Gave up in the end so will switch it elsewhere.

I use t212 for my stocks and shares isa and have never had any problems. Are you non uk based? Might be an issue 

redman said:

I would like to fund a Junior ISA for my grandchild. I have done a bit of research and it would seem the parents have to open but anyone can contribute (up to £9k per year). The long term intention would be to fund uni fees or help them get started in adult life at 18. 
I believe me funding would not reduce either my own or my daughter's ISA £20k pa allowance.
As it's long term, a stocks and shares ISA looks appropriate, with funds in global fund (probably index linked). I see Vanguard offer one with fees of .15% which seem very reasonable but Hargreaves Landsdown currently offer free of charges. 

Does anybody have any experience or any comments please. 

redman said:

Inheritance tax question. Is this a stupid plan? I am very unlikely to live 7 years, my wife statistically should. There is no inheritance tax between spouses. Therefore if we want to gift money now my plan would be; I drawdown some of my pension (particularly the tax free element), I then gift this to my wife , who subsequently gifts it to my kids. I will put letters in place. Any reason this shouldn't work? 

I'm thinking that if I gave it to my kids directly, it would then be treated as a gift and although wouldn't incur IHT, it will reduce the £325k that eventually my wife's estate would be able to claim eventually. 

Huskaris said:

redman said:

Inheritance tax question. Is this a stupid plan? I am very unlikely to live 7 years, my wife statistically should. There is no inheritance tax between spouses. Therefore if we want to gift money now my plan would be; I drawdown some of my pension (particularly the tax free element), I then gift this to my wife , who subsequently gifts it to my kids. I will put letters in place. Any reason this shouldn't work? 

I'm thinking that if I gave it to my kids directly, it would then be treated as a gift and although wouldn't incur IHT, it will reduce the £325k that eventually my wife's estate would be able to claim eventually. 

Its not a stupid plan but you will need to be careful. 

As an example, don't send her the cash at 10am and her send it on at 10.15, as HMRC will try and argue it was effectively from you to the child

Document separate intentions by using signed notes (as you outlined) from you to her and then one from her to your children. This will then need to be documented on the IHT403 form.

Huskaris said:

I've taken my first dabble in the past year moving out of ETFs and doing some specific stock picks, something which I told myself I probably wouldn't do but of my financial investments, this still is under 3% but I might raise it to 5-7, and it's been fun doing the analysis on the picks. 

My best pick was last month with Novo Nordisk. I fundamentally believe there is room for "Pepsi and Coke" in this market, and I feel like they are massively undervalued vs what they will become with more investment in R&D and some of the products they currently have in the pipeline which could get them closer to Eli Lilly (who have staggering p/e ratios of 36-ish vs nordo at approx 10).

Bought at $36.21 right in the new ISA year, around April 6 and currently today $44.99, 22.5% growth already. In 2024 they were trading at $142 for a period. 42% EBT margin (Lilly are similar too).

redman said:

I would like to fund a Junior ISA for my grandchild. I have done a bit of research and it would seem the parents have to open but anyone can contribute (up to £9k per year). The long term intention would be to fund uni fees or help them get started in adult life at 18. 
I believe me funding would not reduce either my own or my daughter's ISA £20k pa allowance.
As it's long term, a stocks and shares ISA looks appropriate, with funds in global fund (probably index linked). I see Vanguard offer one with fees of .15% which seem very reasonable but Hargreaves Landsdown currently offer free of charges. 

Does anybody have any experience or any comments please. 

PragueAddick said:

golfaddick said:

Jon_CAFC_ said:

Colleague is going mad about the spacex ipo, seems meme coin territory and perhaps x2 inflated price any perspectives which could help to talk him down from what could be quite a risk 

Tell him to buy a US tracker fund. Upon launch (no pun intended) the shares will be included in all tracker funds by default. If its a true tracker  then the fund manager will have to buy the relevant % for its fund. 

Soon everyone who invests in a US fund will own a (very small) chunk. 

Today an FT article was explaining that it won't get on to the S&P500 index for at least a year. So funds that track that won't have it straight away. Nasdaq tracker would. 

But your basic advice is sound, IMO. I'm not going near it precisely because Musk is overtly courting "retail investors". Reminds me of the companies that chose "multi-level marketing" rather than doing the hard yards on the High Street. But that argument probably won't resonate with the OP's colleague.

Rob7Lee said:

redman said:

Inheritance tax question. Is this a stupid plan? I am very unlikely to live 7 years, my wife statistically should. There is no inheritance tax between spouses. Therefore if we want to gift money now my plan would be; I drawdown some of my pension (particularly the tax free element), I then gift this to my wife , who subsequently gifts it to my kids. I will put letters in place. Any reason this shouldn't work? 

I'm thinking that if I gave it to my kids directly, it would then be treated as a gift and although wouldn't incur IHT, it will reduce the £325k that eventually my wife's estate would be able to claim eventually. 

Seems sensible, others have commented how etc.

Ultimately (although rules and amounts can change of course) assuming you have a property also that would be left to direct descendants, between you and your wife you have up to £1m of allowance. So partly depends on your joint estate value.

you probably want to make sure your will leaves as much of the £325k allowance as possible (ideally the full amount) not to your wife, ie to your children. Whilst it currently carries over, that could change.

for example, your pension, would your wife need it all or can you complete an expression of wish to leave some/all to your children? Does your wife have funds in her own name she could gift?

redman said:

I would like to fund a Junior ISA for my grandchild. I have done a bit of research and it would seem the parents have to open but anyone can contribute (up to £9k per year). The long term intention would be to fund uni fees or help them get started in adult life at 18. 
I believe me funding would not reduce either my own or my daughter's ISA £20k pa allowance.
As it's long term, a stocks and shares ISA looks appropriate, with funds in global fund (probably index linked). I see Vanguard offer one with fees of .15% which seem very reasonable but Hargreaves Landsdown currently offer free of charges. 

Does anybody have any experience or any comments please. 

golfaddick said:

redman said:

Rob7Lee said:

redman said:

Inheritance tax question. Is this a stupid plan? I am very unlikely to live 7 years, my wife statistically should. There is no inheritance tax between spouses. Therefore if we want to gift money now my plan would be; I drawdown some of my pension (particularly the tax free element), I then gift this to my wife , who subsequently gifts it to my kids. I will put letters in place. Any reason this shouldn't work? 

I'm thinking that if I gave it to my kids directly, it would then be treated as a gift and although wouldn't incur IHT, it will reduce the £325k that eventually my wife's estate would be able to claim eventually. 

Seems sensible, others have commented how etc.

Ultimately (although rules and amounts can change of course) assuming you have a property also that would be left to direct descendants, between you and your wife you have up to £1m of allowance. So partly depends on your joint estate value.

you probably want to make sure your will leaves as much of the £325k allowance as possible (ideally the full amount) not to your wife, ie to your children. Whilst it currently carries over, that could change.

for example, your pension, would your wife need it all or can you complete an expression of wish to leave some/all to your children? Does your wife have funds in her own name she could gift?

Thanks to all those who have commented. 

I am aware of the property point. However with property prices continuing to rise, likely frozen thresholds and the £2m cut off before it disappears, it just adds to the complication.

The possibility that allowances won't carry over to my wife isn't something I had thought about. Seems remote but perhaps I need to consider.

I do currently have an expression of wish to leave some of my pension to my children, which currently will be tax free. However from next April comes into IHT and then within a year I'm 75 so further tax implications. 

Re the pension. 

As posted a few days ago, HMRC have now decreed that after next April a pension will be subject to IHT first before any income tax is liable by the beneficiaries (if  you die over the age of 75)

robinofottershaw said:

SE9toDA2 said:

@robinofottershaw are you aware that your annual gifting allowance to grandchildren/ others is 3k?

So potentially your estate is liable for IHT on the other 9k you are gifting if you pass within 7 years of making the gift.

Yes, am fully clued up on the annual gifting allowance and potential for exposure to IHT. However, I am making use of the “normal expenditure out of income” exemption for IHT. Periodically you see articles in the financial pages of the newspapers reminding readers of this useful tax exemption.

I have a spreadsheet going back  20+ years which mirrors Page 8 of the IHT 403 Inheritance Form. This details all my one off lump sums gifted to my 4 sons towards house deposits and other things, most of which were longer than 7 years ago, therefore not exposed to IHT.

The spreadsheet also details all my contributions towards my grandchildren’s Junior ISAs, which with 3 of them now amounts to just over £13K per annum, which in theory could be exposed to IHT if I pass within 7 years of the gifting.

However, I can demonstrate that I can make this regular £13k expenditure out of my normal income (i.e. pensions, interest income and dividends), without affecting my standard of living. In IHT 403 you have to list your sources of income and list your regular expenditures, giving you a net surplus income. You also list your annual gifts, e.g. the £13k to grandchildren less the £3k annual gifting allowance, effectively an annual net gifting of £10K. As long as I can demonstrate that my regular income less regular expenditures is more than the £10K of gifts, there is no exposure to IHT, i.e. the 7 year rule is irrelevant. 

Every year after I complete my annual tax return I add a column to this spreadsheet for that tax year just ended and input that year's income,, expenditure and gifts. I file a copy of the updated spreadsheet with my will in order my executors have all the details they would need to complete the IHT forms relating to gifting.

I suspect this IHT exemption is not known or used as much as it might be, but it is extremely useful. I think you need to be meticulous in your record keeping. There is also guidance regarding whether or not HMRC would require large one-off expenditures (eg a car purchase funded out of savings) to be reflected within annual normal expenditures (the answer is no, a car purchase would be regarded as a one-off capital cost, rather than a normal income-based expense).