Investment and IHT newsletter for Financial Advisers | December 2008

2009 a great 'platform' for IHT mitigation.

Understandably, for most in the financial services industry 2008 cannot end quickly enough. But here at WAY, it is more that 2009 cannot come quickly enough!

Photo left: WAY IHT plans on Ascentric (apologies to Bob Dylan)

NEWSFLASH!
WAY is delighted to announce that from next month we will start to offer our critically acclaimed Inheritance Tax (IHT) plans with an expanded list of external funds.
This has been achieved initially via collaboration with the wrap platform, Ascentric, the IFA focussed fully integrated online investment management and dealing platform.

THE IHT PLANNERS UTOPIA
It is over five years now since WAY began marketing its range of flexible plans based around its own range of collective funds. New Labour’s rapacious approach to this heinous tax has seen crucial changes to legislation during the intervening period but the plans have remained completely contemporary. Those plans have allowed IFAs to assist their clients to potentially protect several millions of pounds from the impact of IHT when those assets finally pass to their beneficiaries.

With UK plc now looking to replenish its coffers over the next few years it seems incredibly unlikely that even a Conservative election victory would bring any changes that would seek to reduce the revenues available from IHT. Mitigation should therefore remain a staple part of an estate planner's activity.

Let's remind ourselves of the key differentials that are gained by those utilising the WAY plans, compared with the standard life offerings:-

• IHT mitigation via collectives giving both transparency and tax-efficiency (CGT of 18% v IT at up to 40%/45%). The more favourable CGT regime in place for collectives has become progressively more pronounced, with a reduction in the headline rate in the last budget and a potential uplift in income tax for trustees, employing an investment bond solution, in the recent PBR.
• Focus on future financial flexibility for both settlor and beneficiaries. The ability for the settlor to establish his/her own pattern of 'income' and adjust as appropriate on an annual basis together with the flexibility to pass-out 'ad-hoc' loans or appointments to beneficiaries has relaxed so many that were previously concerned about relinquishing access and control of their money when passed into trust.
• Ground breaking products. Aside from the core multi-sold 'Flexible Inheritor Plan', WAY has introduced the only retail plan which enables immediate IHT saving on gifts out of surplus income – so useful in the efficient arrangement of excess pension income - and the combination flexible/discounted plan, the 'Duo'.
• WAY culture focused on high level of sales and technical support. Plans that do not just mimic the competition demand IFA support from a strong representative team and we openly strive to meet this ambition.

THE WAY AHEAD
A parallel development in the IFA world during the last five years has, however, been the 'unbundling' of advice, asset and product choice, cost and charges. This has been promoted and accelerated by the growing influence of wrap and supermarket offerings but, importantly, has been given credence by the changes and variations of business models now adopted by IFA practises.

This has led to one plaintive refrain we have received on an increasingly frequent basis – "we love your plans and trusts but we would prefer to choose/manage the funds ourselves."

Our plans have remained as packaged arrangements for a combination of technical, administrative and commercial reasons and it has come as little surprise to us that, despite the success of our plans and several rumours of intent, no other investment house has come into our territory. This is complex terrain.

We have been listening however and beavering away for a strong solution and now believe that we have developed an efficient 'open architecture' model, courtesy of an exciting alliance with Ascentric.

Full details will be announced in the New Year once the finishing touches are put to the logistics but, in the interests of looking forward to good news rather than looking back on bad, we thought that we would herald some of the outline plan here in our last newsletter of 2008:

• January 2009 – Availability of Flexible Inheritor Plan, Gifts From Income Plan and Loan Trust on Ascentric platform with choice of 50+ external fund links, all low or non-yielding.
• Summer 2009 – We will be looking to progressively increase the funds on offer.

GO SAFELY
If you wish to know a little more right now then please do look at the video on our website (simply follow the related links to this newsletter shown below), introduced by Matthew Vincent (Editor of Financial Times, Money Section) and glance at the brochures on the download section of the site. Bob Dylan fans may watch the video aghast but, should he move over here, then he would be of the age and stage where he (rather, his IFA) would be downloading our brochures (maybe we should have gone for Donovan)!

Photo left: Matthew Vincent (Editor of Financial Times, Money Section)

"Hello, my name is Matthew Vincent. I am here to talk about Inheritance Tax mitigation. Over recent years I have been interested by the development of strategies employed to help taxpayers to minimise this tax. At the same time I think we have all been convinced by recent events that we live in an uncertain world. Investment markets are uncertain and we need a great deal of flexibility in terms of where our assets are invested. Events in our own lives are uncertain ...illnesses, deaths, separation and divorce all serve to remind us that tomorrow may deliver us a rather different personal and family environment to the one that we enjoy today. And finally the political landscape and it's impact on all forms of taxes is proving rather volatile right now. So I believe that serious Inheritance Tax Planning must take all of these uncertainties into account. Placing assets into a mitigation structure should therefore ideally offer:

• flexible investment options,
• the ability to redirect future benefits to beneficiaries as and when appropriate, and
• sufficient flexibility to alter the shape of the structure if the tax environment changes."

"We write about all these strategies and the companies that make them possible in the Money Section of the FT and WAY Group is one of the many firms we have looked at. I think it is fair to say that it's Inheritance Tax structures linked to tax efficient collective funds can provide a lot of this flexibility."

There will be much more to come from WAY as the New Year unfolds, both in providing full detail on the above plus other developments now 'in train'.

How to contact us
If you wish to talk to someone about the issues raised in this e-newsletter or about any of WAY's products, please feel free to call either your local Regional Sales Manager or Tony Lyons, IFA Support Manager, head office telephone number: 01202 890895. Or you can use the website: Contact Form to get in touch. We look forward to hearing from you.

In closing, I would like to thank, on behalf of the Company, all those who have supported our plans this year and to wish all readers a Happy Yuletide and a refreshing 2009.

Yours sincerely,

Ends -

Video link:

Click here to view the new "streaming" product video: WAY IHT on the Ascentric Platform

Plan Documents (Platform Versions)

Click here to access/download: The WAY-Ascentric Brochures - includes: 1. the WAY Flexible Inheritor Plan; 2. the WAY "Gifts From Income" Inheritor Plan; and 3. the WAY Inheritor Loan Plan.

External link:

Click here to visit: the Ascentric website

Newsletter: December 2008.

Note: This newsletter commentary has been prepared for Financial Intermediary Clients and Professional Associates of WAY Investment Services Ltd and is not intended for and must not be distributed to Private Investors. This information is supplied to you in confidence and you may not pass it on to any other party without prior written consent. Past performance is not necessarily a guide to future returns and changes in rates of exchange between currencies may cause the value of investments to rise or fall. No representation or warranty is given (express or implied) as to the accuracy, completeness or correctness of the information nor the opinions, interpretations and conclusions contained in this commentary. The commentary does not constitute investment advice or a recommendation to purchase or sell any security. Neither the author nor WAY Investment Services Ltd accept any liability whatsoever for any loss or damage arising in any way from any use of or reliance placed on the commentary. WAY Investment Services Ltd is an Appointed Representative of WAY Fund Managers Ltd which is authorised and regulated by the Financial Services Authority.