NLP Financial Management joins Truinvest Group

By | Financial Planning, Investment News, Latest News

We are delighted to announce an exciting development for our company.

We have now joined the Truinvest Group, one of the country’s most innovative emerging financial services groups.  We will be the core business within the group, offering our investment management service via our discretionary platform to other companies within the Truinvest Group.

Truinvest was established in 2019 by co-founders Mark Smith and Micky Johal, former colleagues at wealth management advisors Mattioli Woods plc. Truinvest has the backing of Stonewood Wealth Management, a prominent family office that looks after assets in excess of $2.5 billion.

The addition of NLP Financial Management to the Truinvest Group, results in a new Group already handling assets under advice and management of almost £1.1 billion.  This also provides a great platform for the NLPFM group to develop and provide new avenues for the delivery of financial services and bespoke specialist advice to our clients, complementing how financial planning has been “traditionally” delivered.

There will be no changes in the day to day management of your affairs, it’s business as usual from our point of view.  Adam Katten remains NLPFM Managing Director and Lee Pittal, Chief Operations Officer.   Adam and Lee will also join the Truinvest Leadership Team.

We look forward to continuing to provide you with a high quality and ever-improving financial planning service.

If you do have any questions about this exciting development, please do not hesitate to contact your usual financial planner or contact us at [email protected]

The Budget Highlights – 2021

By | Financial Planning, Investment News, Latest News

The 12 months between the March 2020 budget and the one delivered on 3rd March 2021 has been, to coin a popular phrase – “unprecedented.”  We have seen 3 lockdowns, the economy shrink by 9.9%, Coronavirus support measures costing upwards of £280 billion and a tragic death toll within the UK from a pandemic we simply never saw coming.

As a result, Government borrowing – the budget deficit – is expected to rise from a forecasted £55 billion to about £355 billion by the end of 2020-21. Meanwhile, national debt is already approaching 100 per cent of GDP at £2.1 trillion and could rise to 120 per cent of GDP during the first half of the decade according to the Office for Budget Responsibility (OBR).

The widely respected Institute for Fiscal Studies (IFS) warned late last year that around £40 billion of tax rises will be needed by the middle of the decade to keep borrowing down to £80 billion a year and debt down to 100 per cent of GDP, prompting intense speculation that they could come as soon as this Budget.

With the Conservatives having committed in their 2019 General Election Manifesto not to raise the rates of Income Tax, National Insurance or VAT, there was much speculation about where and how the Chancellor would start to recoup these huge losses and over what period of time.

Thankfully, the UK is feeling the optimistic effects of a robust vaccination programme which at the time of writing has seen more than 20 million people vaccinated against Coronavirus, with set dates in the diary for the pathway out of lockdown.

So what does this new Budget mean for you and your personal finances?  Read more in our highlights document and as always, if you have any questions about your financial goals, investments or portfolio please do get in touch.

Lockdown number 3, but it’s business as usual…

By | Investment News, Latest News

Whilst we were still wishing friends and colleagues Happy New Year, last Monday England once again plunged into another lockdown.  Although for many of us, it didn’t come as a huge surprise, at least this time round there is some light at the end of the tunnel with the acceleration of the vaccination programme rolling out across the UK.

For us, at NLP Financial Management, it really is still business as usual – or at least the usual we are now accustomed to.  We learnt many lessons last year during the first lockdown period and so we can absolutely reassure you that we are still pro-actively working and still at the other end of a telephone or email to answer any questions you may have.

Our teams are now primarily working from home although an office presence is being maintained to deal with the post.   In addition, our investment committee is still meeting regularly online to ensure we provide as comprehensive a service as we did before the pandemic existed.

We are hopeful, as are the rest of the nation, that this lockdown will be short and sharp and we can return to a degree of normality as we head towards Spring.   Please rest assured that we are here Monday to Friday during normal opening hours and hopefully we will see some of you face to face in the not too distant future.

Offshore Bonds and their use in Financial Planning

By | Financial Planning, Investment News, Latest News

There are a number of tax wrappers available when building an investment portfolio, and this article explores what offshore bonds are, their tax treatment and how they can be effectively used in certain circumstances to invest tax-efficiently.

The advantages can be summarized as follows:

Managing Investment without Tax

An offshore bond is an investment wrapper offered by a life insurance company, held in a jurisdiction with a favourable tax regime, like the Isle of Man.  The funds grow in a virtually tax-free environment, in what is referred to as “gross roll-up”.  The gain on the bond is ultimately subject to income tax when a “chargeable event” occurs but in the meantime, you can buy and sell funds within the bond without paying tax.

Annual Tax Deferred Income

Investors can withdraw up to 5% of their original investment each year for 20 years, without incurring tax and unused allowances can be carried forward.  For example, someone investing £200,000 into an offshore bond could withdraw £10,000 per annum without any immediate tax liability.

Chargeable events include surrendering the bond, withdrawals in excess of the 5% tax-deferred allowance or the death of the life assured.  When such an event occurs, a calculation takes place to assess the tax liability and the gain is subject to income tax at one’s marginal rate.

Bonds are split into “segments”, and withdrawals can be taken by either encashing whole segments or across the whole policy, providing further flexibility depending on one’s circumstances.

Going Abroad

Offshore bonds can be effectively used when an individual retires abroad.  For example, someone who emigrates from the UK can potentially encash the offshore bond and avoid tax altogether!

IHT and Other Tax Planning

Parents may use offshore bonds to save for children, as they retain control of the investments until they feel it appropriate to gift them where importantly such gifts do NOT give rise to income tax.   Therefore, the option to gift part or all of a policy to a lower rate taxpayer can reduce tax on gains.  They can also be used effectively through the tax deferred withdrawals to fund school fees.

Investment Management

Many providers offer access to a wide range of investments within offshore bonds, including Discretionary Fund Managers, enabling diversified portfolios to be implemented to suit different risk profiles and objectives.  Bonds can sit alongside ISAs and Unit Trust portfolios as part of a broad investment strategy.  With a Unit Trust portfolio, gains above one’s annual exemption of £12,300 are subject to Capital Gains Tax, and whilst CGT rates have historically been lower than income tax, this may change in the next Budget, making offshore bonds an attractive alternative in certain cases.

In summary, offshore bonds provide tax-efficiency, access to the funds, broad investment opportunities and flexibility.  However, they can be complex and are not suitable for all investors, so it is essential to seek financial advice.

Elliot Gothold is a Chartered Financial Planner with NLP Financial Management Limited and can be contacted on 020 7472 5555 or at [email protected].