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
Which investment is best for my teenage daughter?
I would like to encourage my teenage daughter to develop the ‘saving habit’. She has a Saturday job and is happy to put a small sum away each week. Can you recommend a good account aimed at this age group?
Gina Evans of Cardiff based Blackstone Partners replied: ‘Cash ISA’s are available from the age of 16 – these are excellent as your daughter’s savings will be able to grow free of all taxes, and she can save up to 5,100 per annum.
How can I build up my credit score so I can get a mortgage?
I have tried to apply for a mortgage but was declined due to my credit rating. I have never had a credit card, loan or such like which means that I am in the average category on my Experian credit report. I have been advised to apply for a credit card to build up my rating but have now been declined a card as well. What can we do?
Gina Evans of Cardiff based Blackstone Partners replied: ‘Firstly – stop applying for credit – each credit score you have leaves a “footprint” on your credit file. The more footprints that you have, the lower your credit score!
‘Your first step should be to ensure you are easily identified and located at your address – if not at the same address for the last 5 years, then your previous addresses too. If a company has difficulty in locating you, this also reduces your credit score.
‘The best ways of improving your credit score are:
Stop applying for credit cards, loans, mortgages and HP agreements – as these are more sophisticated credit arrangements, and you need to improve your score first – which will take at least 12 months, if not more.
Do you have a bank account? Even a basic starter or step account – if not, set one up.
If you do have a bank account – it may be worth approaching your bank or building society. You already have an established history with them and this might count in your favour when applying for a credit card.
Make sure you are on the electoral roll – even if you do not want to vote – check with your local authority to see if you are registered, if not then request the forms.
Create a credit history by applying (making single applications – not multiple) for basic credit items, such as mail order catalogues – or a basic contract mobile phone. It is important that you maintain a clear and perfect payment history, so whatever you buy – settle the invoice immediately. For example, if you are paying for a mobile phone – set up a direct debit – it is vital you have sufficient funds in your bank account to cover payments when they are due.
If you are urgently in need of a mortgage, you could ask your parents to act as guarantors. Do bear in mind; however, this will make them responsible for your mortgage debt.’
We are ex-pats – should we arrange for our pension to be paid into an off-shore account to save time and money?
We live in Cyprus and are registered to pay tax in Cyprus. Our pensions are paid into our UK Halifax account, we then have to write a cheque and deposit this in our sterling account and wait 3 weeks for this to clear then we transfer it to our euro account. Both of these transactions incur charges up to approx £20 to change £1500. But we get a good exchange rate from the Bank in Cyprus.
We are wondering if we should consider off shore banking and we would be grateful for advice regarding this, we need to have our pensions paid in and easy access to our money monthly.
Gina Evans of Cardiff based Blackstone Partners replied: ‘Only the pension provider can advise you whether or not it would be prepared to pay the pension into an overseas bank account.
‘It does not matter where your pension is paid into – a UK bank or a Cyprus bank – you are liable to UK tax on income arising in the UK, subject to your annual tax free allowance. There is, however, a double taxation agreement between Cyprus and the UK which means that, although Cyprus will also tax the pension, they will give credit for any UK tax paid on it.
‘If your pension provider is unwilling to pay your pension into a non UK bank account, then there are other banks / building societies that do not charge for accessing your money overseas – so shop around.’
What would be our capital gains liability on demolishing our property and building two houses?
We are a retired couple living in the 1950’s built family home. We would like to downsize but remain in this location. Our idea is to demolish our principle residence and rebuild two smaller houses – live in one and sell the other. Would we be liable for Capital Gains Tax and if so, how do we calculate this liability?
Gina Evans of Cardiff based Blackstone Partners replied: ‘Capital Gains Tax is charged on the net gains arising in the tax year, so in other words, chargeable gains after deduction of allowable losses and the annual exemption. The procedure is to all up all the gains made on disposals in the tax year, and deduct any losses in the same tax year to arrive at net chargeable gains.
‘If chargeable gains are not more than 10,100 (2009/2010 annual exemption), no tax is payable
If chargeable gains exceed 10,100 – the excess is taxed at the single capital gains tax rate of 18%
Husband and wife each have their own 10,100 annual exemptions
The 10,100 annual exemptions cannot be rolled forward if it is not used however.
‘As the original property is your principle private residence you should speak to an accountant before you decide how to proceed to ensure that you maximise any reliefs that are available to you.’
Gina Evans started out in the financial services industry 8 years ago as a Mortgage and Protection Specialist. These days, her areas of expertise include first and second charge mortgages, buy to let/portfolios, commercial mortgages and residential and BTL/commercial bridging finance.
She also helps clients obtain Government backed and Non Government backed VC/Asset Finance/ Business Growth Investment/MBO’s Investment.
Gina prides herself on excellent customer service and giving clients un-biased, whole of market, holistic financial planning advice.
For more information contact: gina.evans@blackstonepartners.com
Tags: Ask an Expert, Ask Gaynor, ex-pats, Pensions, Personal Finance, Property Industry, teenagers
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