Archive for December, 2016

Autumn Statement: What it means for you?

Monday, December 19th, 2016

Prices-Rising
In the Autumn Statement, the Chancellor announced that the government will move to a single major fiscal event each year. Following the spring 2017 Budget and Finance Bill, Budgets will be delivered in the Autumn, with the first one taking place in autumn 2017.

So what could this Autumn’s statement mean for you?

Pensions:

The Money Purchase Annual Allowance (MPAA) will be reduced to £4,000 from April 2017. The government does not consider that earners aged 55 and over should be able to enjoy double pension tax relief, such as relief on recycled pension savings, but does wish to offer some scope for those who have needed to access their pension savings to subsequently rebuild them.

The triple lock protecting the state pension will be maintained until 2020 and then reviewed at the next Parliament. The triple lock ensures the state pension rises by the highest of inflation, earnings or 2.5%.

From April 2017, employees who utilise salary sacrifice schemes to receive various non-cash benefits in kind (BIK) will pay the same tax as if the BIK had been received as cash. However, salary sacrifice in lieu of employer pension contributions are excluded from this change (along with ultra-low emission cars, childcare and the cycle-to-work scheme).

Savings and investments:

A new savings bond will be available through National Savings & Investment (NS&I) in spring 2017. The detail will be announced in March but the bond is expected to have an interest rate of around 2.2% gross and a term of 3 years. The return might be adjusted to reflect market conditions when the product is launched. Savers over the age of 16 will be able to deposit up to £3,000, with a minimum investment of £100. The government expects around 2 million people to benefit from the new bond, which will be available for a year.

The annual subscription limit for junior ISAs will be uprated in line with the Consumers Price Index (CPI) to £4,128, alongside the ISA subscription limit increase from £15,240 to £20,000 which was previously announced at Budget 2016. This will be effective from 6 April 2017.

Business issues:

The main rate of corporation tax was cut from 28% to 20% back in 2010. This will be cut again to 17% by 2020. For those looking to offset corporation now at the higher rate, they may wish to consider pension contributions through their company by utilising carry forward of unused annual allowances from the previous 3 tax years.

What we already knew…

The personal allowance is currently £11,000 for this tax year and will rise to £11,500 in 2017/18. Once the personal allowance reaches £12,500, it will increase in line with inflation.

The point at which higher rate income tax kicks in will increase from £43,000 this year, to £45,000 in 2017/18. Although for Scots, this figure will be £43,387 following the devolution of a swathe of new powers to the Scottish Government agreed after the independence referendum.

The launch of a new Lifetime Individual Savings Account (LISA) for those aged between 18 and 40 is to open from April 2017. They can save up to £4,000 a year and the government will add a 25% bonus if the money is used to buy a home or as a pension from the age of 60.

Finally, from 6 April 2017 an additional ‘residence nil-rate band’ of £100,000 per person will be introduced – which will effectively take the threshold at which inheritance tax (IHT) becomes payable to £850,000 for family beneficiaries.

However, it is important to note that this allowance will only apply to wealth tied up in your main residence and it can only be left to direct descendants – children, grandchildren and step, adopted or foster children.
If you wish advice on, or to discuss, any of the topics in this article, please contact any of the James & George Collie Financial Management team by email at FSDepartment@jgcollie.co.uk

Voluntary Registration – Jen Davidson, trainee solicitor, asks what’s in it for you?

Monday, December 19th, 2016

The Land Register for Scotland is a digital map-based system of land registration established by the Land Registration (Scotland) Act 1979.

The Scottish Government have asked the Keeper of the Registers of Scotland to complete the Land Register by 2024 with all public land being registered by 2019.  The most recent data shows that around 30% of land in Scotland is currently registered. This means that a great deal of land in Scotland is still registered in the old deeds-based General Register of Sasines which is less user-friendly and arguably offers less transparency as to who owns what.

The Land Registration etc. (Scotland) Act 2012 came into force in 2014 with the aim of accelerating the process of land registration. From April 2016, the list of deeds that trigger compulsory registration in the Land Register was extended to include standard securities.

However, with a view to achieving the targets set out by the Government, the Keeper wishes to encourage voluntary registration (i.e. registration without a deed) by owners of land in Scotland, particularly in rural areas.

So, what are the benefits of voluntary registration?

-          By registering title to your property in the Land Register, you firmly establish and define what you own. You enjoy certainty as to the boundaries of your property and the rights and obligations affecting it. This also provides a secure legacy for the next generation.

-          Should someone challenge your title, you can quickly and easily identify what you own by exhibiting the title sheet. This is simple and accessible and saves lengthy title examination and avoids disputes that may arise where old deeds are unclear.

-          In larger rural properties, plots of land or estates, voluntary registration avoids piecemeal registration where, for example, a transaction takes place over only one part of the land triggering registration that results in only that part being registered.

-          Once you have registered your title, the process of any transfer or re-finance in the future is much simpler and smoother.

-          Voluntary registration allows you take control over the registering of your title with more emphasis being given to your own understanding of the land you own and what it is you actually possess. You also control the timing. The 2012 Act makes provision for the keeper to exercise Keeper-induced registration whereby land would be registered without any action on the part of the owner. This process remains fairly uncertain so voluntary registration avoids the risks that it may present.

-          And finally, Registers of Scotland will offer you a 25% discount on registration dues should you undertake the process.

Given the pressure from the Government, some landowners feel there is a “Race to the Register” and are keen to reap the benefits of voluntary registration. A degree of Solicitor involvement will always be required when undertaking voluntary registration and with more complex titles, such as rural property or farms, the cost to the land owner could escalate.

It is important that you measure the benefits against the potential costs and this is something your Solicitor will be happy to advise you on.

Should you wish to consider voluntary registration or require any other advice along these lines, please get in touch with your usual contact at James & George Collie.

Residential property review of the year

Monday, December 19th, 2016

2016 has, to put it mildly, been a challenging year for property sales in Aberdeen and Aberdeenshire.  The well publicised downturn in the local economy, as a direct result of the decrease in the price of oil from mid 2014, has led to numerous job losses and a consequent negative impact on the property market.

Figures from Aberdeen Solicitors’ Property Centre show the volume of sales down by almost a third compared with the year before (up to the end of the third quarter).  Average prices are also down by 10% in the city and suburbs over the same period.  However, over a 5 year period prices are still up by an average of 2%.

Closing dates are few and far between and most sales are being negotiated at percentages under the Home Report valuation.  This should not discourage property sellers as when they come to buy, they should be able to negotiate a similar discount on their purchase.

There are some positive signs, however.  The volume of sales in the third quarter of 2016 showed a slight increase over the second quarter.  A recent oil and gas survey showed that two thirds of businesses believed that the sector had reached the bottom of the current cycle or will do in the next year.  The oil price has also bounced back from under $30 per barrel in January to over $50 per barrel this month.  Property purchasers are benefiting from historically low interest rates and new home builders are offering generous incentives.

James & George Collie’s dedicated sales office at 450 Union Street, Aberdeen, located between Rose Street and Chapel Street, in the heart of the city centre, enjoys a prominent position on Aberdeen’s main street and provides ideal exposure for properties on the market for sale.  Located directly opposite the new Capitol and Silver Fin office developments, it is ideally placed for advertising properties for sale and to benefit from the inevitable bounce back in the property market.

For further information or advice please contact our property sales office on 01224 572777 or our estate agency partner Brian Sutton on 01224 563340 or by email at b.sutton@jgcollie.co.uk