Money Matters

This will “hit the rich quite hard” is how Andrew Tailby-Faulkes, partner with Ernst & Young, put it when he called to offer his thoughts on Mr Darling’s address.

But those who are not wealthy also have cause for concern. The combined effects of the government’s move to encourage home ownership and keep the inheritance tax threshold at £325,000 for a further four years means that more of us are likely to draw inheritance tax charges.

As John Richardson, head of Advice Policy at Towry Law explains:

“Freezing the inheritance tax threshold for 4 years will mean more families will be caught by this tax and will therefore need to consider estate planning opportunities by maximising reliefs and exemptions.

“Trustees of discretionary trusts will need to consider more tax efficient investment structures to minimise 10 year anniversary charges,” he adds.

Taulby-Faulkes had predicted that Mr Darling might introduce a higher IHT rate for large estates. But this prophecy has not come to pass.

The rules are the same. After the first £325,000 “nil-rate” band is reached, the remainder of an estate is taxed at 40 per cent. Married couples and civil partners are able to use any unused portion of their partners’ nil-rate band upon their death.

In last week’s column,  FT Money’s Merryn Somerset-Webb fired a shot at Anthony Bolton’s China fund, which floats next month. The fund’s 1.5 per cent management fee looks steep, Somerset-Webb argues, and investors also face a 15 per cent performance fee on returns higher than 2 per cent over the returns made by the fund’s benchmark index – the MSCI China.

Somerset-Webb is not the lone skeptic. In spite of Mr Bolton’s distinguished record, other financial advisers also warn that you should take a look at the fine print before dumping the sum total of your savings account into the fund.

Even a god cannot change the past,  Agathon said (in 445b.c.).  Hopefully, the Athenian poet’s musings on the future would have been more optimistic.

But since Agathon is no longer around and not up for fielding questions about his country’s problems, we turn to market strategists.

This afternoon, a note crossed our desks from David Karsbol, Saxo Bank’s chief economist. Is all the panic in the Greek markets creating opportunities?

Karsbol’s thoughts:

The Greek stock market has dropped 36% from the peak in October 2009, while MSCI World is only down by around 5%. In other words, it looks like a country-specific slow-motion panic that might threaten to evolve into a full-blown panic. And where there is panic, there are usually lots of opportunities. We have therefore screened the Greek stock market for long-term value stocks that might be getting even cheaper if more rumors or even real political action appear.

Continue reading: “Creating opportunities from Greece’s financial woes”