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Financial Advisers London – Autumn Statement

With the  Chancellor George Osborne about to deliver another bleak Autumn Statement on  Wednesday, our independent financial advisers in London are keeping a close  look out to see how the extra year of austerity will impact our clients.     According  to The Times; “Mr Osborne is planning to sting  wealthy savers by squeezing the amount of money that they can put into their  pension pots. It appeared that the Chancellor, who has already cut the tax-free  threshold from £225,000 a year to £50,000, may limit the rate of relief for the  highest earners.”

This may mean that the annual tax free threshold for pension  contribution is reduced to say £30,000, which if correct will save the  government around £1 billion. It will also mean that for higher earners our  financial advisers in London will have to look at other legitimate tax planning  solutions.

An  example of that could be for investors seeking to optimise tax reliefs in the  current financial year to use the Seed Enterprise Investment Scheme (SEIS).  Introduced in April this year, and not dissimilar to the well established EIS  and VCT reliefs, SEIS is a highly constructive,   but still surprisingly little known move by Government to correlate tax  reliefs with business risk.

SEIS is  designed to encourage investors to provide finance for start up businesses by  offering a 50% tax break irrespective of the investors marginal rate of tax. In  addition, up to 100% IHT relief after 2 years and loss relief at the investor’s  marginal rate is available but the most attractive feature may well be the  treatment of capital gains realised in 2012-13. SEIS provides for an investor  paying no CGT on any asset sold if the gain is reinvested in a qualifying SEIS  investment in this current financial year providing a further 28% relief.  In addition, and as with EIS, SEIS  investments are not subject to CGT if held for more than three years.

At  present SEIS has been introduced for one year only although there is every  expectation it will be renewed for 2013-14. There is currently however no such  certainty for the CGT relief and therefore investors should be alert to this  remarkable short term opportunity. The full range of reliefs is entertainingly  explained in detail on the Government web site http://www.seiswindow.org.uk.

While  our financial advisers in London to not advise on individual company  investments we can introduce experienced investors to companies seeking to  raise SEIS funds.

For more information call Geoff Newman 0n 01582 715777.

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