Life Insurance: Is it time to review your cover?

If you’ve taken out a life insurance policy it’s tempting to cross this important task off your ‘to do’ list, put the paperwork somewhere safe and forget all about it.

However, if you don’t review your policy from time to time, you could risk being underinsured, or be missing out on a newer, more cost-effective policy that might better suit your needs.

So, here are a few life stages when it often makes sense to talk about protection insurance with us.

GETTING MARRIED OR ENTERING A CIVIL PARTNERSHIP

If you’ve decided to share your lives, the chances are that you’ll also be sharing your wealth. This means that it’s important to make sure that if anything were to happen to either of you, there would be funds available to meet your financial commitments.

MOVING TO A BIGGER HOUSE

A larger home often means a bigger mortgage, so you need to consider taking out more protection insurance to cover the additional amount you’re borrowing.

HAVING MORE CHILDREN

If your family is growing, your financial responsibilities are likely to increase, and your cover will need to reflect this. It is often when families reach this stage that they find it’s appropriate to consider other forms of cover, such as accident, sickness and unemployment, critical illness or income protection.

YOU’VE GONE UP IN THE WORLD

If you’ve received a salary increase or promotion, your lifestyle might have changed too. Your children may be in private school, and your family may have got used to expensive holidays and meals out. If that’s the case, then it might be time to increase your cover, so that if anything were to happen to you, they could continue to enjoy a good standard of living.

RETIREMENT BECKONS

At this time in life, a protection policy can help in Inheritance Tax planning, providing a payout on death that will help cover a tax liability on your estate.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Income protection (with no investment link) has no cash in value at any time and will cease at the end of the term. If you stop paying premiums your cover may end.

New Capital Gains Tax rules on the sale of residential property

28 June 2019

Jennie Brown – Tax Specialist


Selling Residential Property? Soon you will only have 30 days to pay your Capital Gains Tax!

The government have decided they want to receive the tax on residential property sales much sooner, and so the rules have been changed.

From April 2020, UK residents who dispose of UK residential property will need to pay Capital Gains Tax (CGT) and submit CGT returns, within 30 days of completion of the sale.

For example, if the sale completes on 1 July 2020, the CGT will be due by 30 July 2020.

Currently taxpayers have either 10 or 22 months to pay CGT, so this is a big change and there will be penalties and interest charged for failure to comply with these rules.

Due to HM Revenue & Customs (HMRC) plans to ensure the change in rules are communicated to the public, it will be much harder for those who miss the deadline, to successfully appeal against any penalties. It is therefore crucial you seek tax support to ensure you comply with the new rules. Ellacotts can take the stress away and undertake the CGT tax return work for you.

The new rules apply to individuals, trustees and personal representatives. There are some exemptions in place with regards to certain sales, for example the sale of your main residence.

What should you do?

Landlords have faced so many changes over recent years; the restriction to the mortgage interest relief, additional Stamp Duty Land Tax and the new regime for non-UK residents means that the new payment regime is yet another cash-flow blow!

If you own property and you haven’t yet had tax advice to understand how the maze of change will impact you and understand the planning options that are available, then Ellacotts would be happy to help. Our tax team specialise in property taxation for landlords and are well placed to advise. Contact Jennie Brown on 01295 250401 or email jbrown@ellacotts.co.uk.