Here's our weekly heads-up on the stories that may have caught your clients' attention over the weekend …
Lifetime Isas are not too complicated or dangerous, Ros
Two Professional Adviser regulars were ranged against each other in The Mail over the weekend, with AJ Bell's Tom Selby writing this response to the views of former pensions minister Ros Altmann, a day earlier, that the Lifetime Isa (LISA) should be abandoned and young savers should beware if they are tempted to open one.
Altmann's view the LISA is too complicated for young people and dangerous for those considering it as an alternative to a pension is "deeply offensive to a large section of the population", he says.
Selby characterises Altmann's principal arguments as: LISAs are too complicated and savers will not understand the exit penalty; young people will not see that a workplace pension offers "more free money" than a LISA; those using LISA savings after age 60 cannot be trusted not to blow the lot; people will take too little risk with their investments and miss out on potential stockmarket growth; and LISA charges will be high.
He duly sets about tackling these one by one - and our only observation would be that where there is this much room for debate, there is a lot of scope for financial advice.
New buy-to-let tax: how it works and how to beat it
Higher-rate taxpayers are no longer able to offset all their mortgage interest against rental income before calculating what is due to HM Revenue & Customs and can expect higher tax bills as a result, says this Telegraph article.
Landlords will only be able to offset 75% of their mortgage interest against their profits this year, then 50% in 2018 and 25% in 2019, explains the piece. The following year, the offset measure will be scrapped completely and replaced by a 20% tax credit. Although the changes will mostly affect higher-rate taxpayers, the piece notes, some basic-rate taxpayers will be pushed into a higher bracket and some will even lose means-tested benefits.
According to John Charcol's Alistair Hargreaves, landlords need to plan and be prepared, with some of his clients choosing to sell off their now tax-heavy buy-to-let London properties, even though they face potentially substantial capital gains tax bills. "If you're a top-rate taxpayer, it's probably the right thing to do," he tells The Telegraph. "A lot of things you can do to protect yourself are very costly, so a plan is needed."
ISA investors spurn UK to take a global view
The end of the tax year saw ISA investors shunning their home market in favour of global and emerging market funds, according to this Financial Times article. It says UK equity funds - "one of last year's favourites" were last quarter replaced on brokers' bestseller lists by global income, global equity, Asia Pacific, European small-cap and US equity funds, according to data gathered from brokers by the FT.
As an example, the UK's biggest retail broker Hargreaves Lansdown counted just three UK equity funds among its top 10 sellers for March - Lindsell Train UK Equity, Woodford Equity Income and Woodford Income Focus. "Unusually," the article goes on, "an Indian equity fund managed by Jupiter appeared on several brokers' best-buy lists for the first months of the year."
Other big-selling funds across several brokers who provided data to the FT included Legg Mason Japan Equity, Newton Global Income, Stewart Investors Asia Pacific Leaders and Lindsell Train Global Equity. The article also notes the only US equity fund to appear on the Hargreaves Lansdown bestseller list was an index tracker.
Joining London team
Previously at Old Mutual Wealth
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Inertia has become a key policy mechanism