This week our Personal Finance expert, Gaynor Pengelly, answers your questions and joins forces with Lesley Collins from Edinburgh-based investment consultants Independent Women.
Are you confused by an aspect of your money or are you seeking help with a more specific financial matter? Then please send your query to our Ask Gaynor section.
Each week we choose up to five questions for our panel of experts to answer – and publish the results on the FMWF site. Unfortunately we are unable to answer all the questions we receive or send personal replies.
To increase your chances of being chosen, please write your question carefully in simple, concise English and include any facts and figures that you feel will help us fully understand your situation.
Email: women@financialmail.co.uk
I’m an Ex-Pat – Will I have to pay Capital Gains Tax on my inheritance ?
I have lived in Spain for 11 years and do not pay tax in the UK.
I have inherited a Trust Fund left by my uncle who died in 1985. When he died it passed to his housekeeper, on her death in January 2009 it passed to me.
The Trust Fund comprises 8 different sets of shares and 3 unit trusts. The share certificates have been passed on to me, but the monies from the unit trusts are still held by the solicitors.
The solicitors are now telling me that the whole inheritance is subject to UK Capital Gains Tax, taking into consideration the value of the shares and the rest of the money. The whole amount is about £90,000.
Can you tell me if this is correct – should I have to pay CGT as an ex-pat of 11 years standing? If I do have to pay, am I right in thinking that CGT is set at 18%, but a certain amount of the money is exempt?
My husband and I complete Spanish tax forms every year, but we have a low income as we are pensioners. Wendy, Costa Brava
Lesley Collins, CEO of Edinburgh investment consultants Independent Women replies: The CGT treatment of assets within a trust will vary depending on the type of trust. Firstly, if this is a UK trust (which will be the case if any of the trustees are UK resident and if your uncle was UK resident), the trust will be liable to UK tax and this should be paid by the trustees from the trust assets. Unless this is a bare trust, which does not sound to be the case, the trustees will need to pay tax at 28% on any gains over the annual exemption of up to £5,050. Your solicitor should be able to confirm the type of trust and you may want then want to obtain tax advice to clarify your position.
Can I boost my state pension with my husband’s NI’s?
I started getting my pension 3 years ago. I had received a pension forecast which showed that I owed about 4 year’s worth of NIs. They gave me one year’s Home Responsibilities so I paid the rest to enable me to get a full Government pension. My husband will get his pension in 2 year’s time and by that stage he would’ve paid in 49 years of NIs. The question is this – could some of his NIs have paid those that I owed? Jill, Waltham St Lawrence
Lesley Collins, CEO of Edinburgh investment consultants Independent Women replies: It is possible to boost your State Pension entitlement using your husband’s NI record; however, this is only possible when you have both reached State Pension age, which by the sounds of it is not the case for your husband so this would not have been an option for you when you reached State Pension age.
What are my rights if a bank collapses?
I understand that the government guarantees that all UK bank account holders are assured that £50,000 of their assets with a UK bank, will be paid to them, in the event of a UK bank’s collapse (after the Northern Rock catastrophe). Am I correct in assuming that this guarantee covers the total of all accounts held with the bank – savings, investments, current and deposit accounts?
Also, in the context of the Iceland Bank collapse, does this apply to accounts held with foreign banks operating in the UK? I am of course referring to the Spanish Bank Santander, which has now a large number of UK residents using their banking facilities. What is the current government’s classification with regard to the Santander Bank? Susan, Battersea, London
Lesley Collins, CEO of Edinburgh investment consultants Independent Women replies: The Financial Services Compensation Scheme (FSCS) is separated into distinct claim categories and this means that the limit of £50,000 applies separately for deposits (including savings and current accounts) and investments.
These compensations limits are per person and per firm so by spreading your savings across a number of firms you could potentially benefit from a higher compensation limit. Conversely, keeping your savings with a single institution could mean that your savings are not fully protected if you have more than £50,000 on deposit.
Under the EU Deposit Guarantee Schemes Directive, all member states of the EEA are required to establish a deposit guarantee scheme which gives a minimum level of protection for depositors of 50,000 Euros in the event of a bank failure. EEA banks can also choose to opt in to FSCS and ‘top up’ their compensation limits to £50,000.
In the case of Santander, they have chosen to become authorised in the UK, as Santander UK plc, and, as such, are full members of the FSCS.
Lesley Collins is CEO of Edinburgh investment consultants Independent Women
www.independentwomen.co.uk
Tags: Ask an Expert, Ask Gaynor, Personal Finance
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