Good morning and welcome to your Morning Briefing for Monday 29 January 2024. To get this in your inbox every morning click here.
Novia Global launches Isa for expats living in ‘suspended animation’
International investment platform Novia Global has launched its own Stocks and Shares Isa to address the issue of expats’ savings being left in “suspended animation”.
This is where UK expats invested in Isas can no longer add additional funds, and any gains/income derived from the Isa could be subject to tax in their country of residence.
The offering is intended to help plug a significant gap in the market by allowing Britons who move or work abroad to have their Isas managed alongside their other assets.
Ownership of UK government bonds drops to lowest level since 1996
Volatile gilt prices during the past two years have resulted in the ownership of UK government bonds by private investors to drop to their lowest level since 1996.
Data from the Office for National Statistics (ONS) revealed that, as of September 2023, £3bn in UK government debt is now held by individuals.
This means private investors’ holdings of gilts have now declined by 44% over the last three years, having previously stood at £5.4bn in September 2021.
Quilter hires three new investment directors
Quilter has hired three new investment directors to promote the company’s investment solutions to advisers and external audiences.
Ryan Medlock and Filipo Madonia were both formerly at Royal London, while Nick Davison joins from Liontrust. They will report to lead investment director Andy Miller.
All three will be responsible for helping with queries about Quilter’s investments, such as the WealthSelect Managed Portfolio Service and the Cirilium portfolio range, and the key drivers of performance.
Quote Of The Day
The new year will bring a fight for survival as the debt storm that has been brewing for years looks like it is breaking across the country.
– Julie Palmer, a partner at Begbies Traynor, predicts a difficult 2024 for ‘tens of thousands of British businesses’.
Stat Attack
A £650m fraud settlement agreed by former Formula One boss Bernie Ecclestone made him the second-biggest taxpayer in the UK last year, according to The Sunday Times Tax List.
£664.5m
Amount paid by Russian-born financial trader Alex Gerko, who topped the list
£375.9m
Amount paid by Bet365 founders Denise, John and Peter Coates, who claimed third place.
£39.6m
Amount paid by songwriter Ed Sheeran – at 32, the youngest person on the list.
£12.2m
Amount paid by boxer Anthony Joshua, the newest entrant.
Source: The Sunday Times
In Other News
EdenTree Investment Management, a specialist in responsible and sustainable asset management, has announced the appointment of Will Oulton as the Chair of its Responsible Investment Advisory Panel.
The EdenTree Responsible Investment Advisory Panel consists of senior financial and business figures appointed for their knowledge and expertise to independently monitor the firm’s responsible and sustainable investment approach. Members advise on EdenTree’s responsible investment process, approach and ethical dilemmas.
Oulton currently serves as the Chair of the European Sustainable Investment Forum (Eurosif), a Non-Executive Director and Board Champion for Ocean Recovery at the UK-based Marine Conservation Society, and Chair of King Charles III’s Accounting for Sustainability (A4S) Expert Panel.
Commenting on his appointment, Oulton said: “Having served as a member of the Panel in the past, I am fully aware of the value the members can collectively bring to the thinking of the team. The landscape for responsible and sustainable investment is becoming more challenging and complex and I am sure that my experience can help the Panel to provide valuable guidance to Carlota and her team going forward.”
Carlota Esguevillas, Head of Responsible Investment, EdenTree, added: “The Responsible Investment Advisory Panel is a critical component of our commitment to responsible and sustainable investing. The panel ensures we have a forum to debate, test and evolve ideas that underpin our investment approach and that we remain fully accountable in our actions. Will’s experience and expertise speaks for itself and will be invaluable as we navigate a continued period of change for the industry and our clients.”
HMRC opened 1,091 serious tax investigations in the last year (March 31, 2023), says multinational law firm Pinsent Masons.
These probes – known as COP8 and COP9 investigations – provide an opportunity for taxpayers to avoid the heaviest penalties, including prison sentences, if they cooperate fully with HMRC.
417 investigations into the most serious suspected cases of tax evasion under COP9 were carried out in the year. Additionally, 674 COP8 civil investigations into those believed to be avoiding tax were also carried out. In total HMRC has 3,300 of these COP8 and COP9 investigations under way.
The scale of these most serious investigations forms part of a crackdown on major tax evasion and avoidance by HMRC.
The UK’s Tax Gap – the difference between the total amount of tax expected to be paid and the total amount of tax actually paid – specifically caused by tax evasion stood at £4.7bn for 2021/22, up by £1bn from 2020/21. Tax avoidance schemes added another £1.4bn in 2021/22.
In both COP8 and COP9 investigations, the scale of penalties levied by HMRC are behaviour based, depending on whether the taxpayer took reasonable care, was careless or deliberate. If the taxpayer is found to have deliberately concealed irregularities from HMRC, the penalty range imposed will be much higher and could be as much as 100% of the tax for UK matters. Penalties can be even higher still for offshore matters.
Penalties can however, be significantly reduced if the taxpayer cooperates fully with the investigation. This involves making a complete, accurate, open and honest disclosure of all their deliberate behaviour bringing about a loss of tax or duty and any other irregularities in their tax affairs.
Sophie Warren, Tax Manager at Pinsent Masons, says: “A COP8 or COP9 investigation represents the ‘last chance saloon’ for people who have been involved in fraudulent evasion of tax or have partaken in tax avoidance schemes. It’s the final opportunity to come clean to HMRC. If they don’t, the scale of the penalties can be eye-watering – hundreds of millions in fines or even years in prison.”
Bank of England set to hold rates despite improving inflation backdrop (Financial Times)
Taylor Swift, Joe Biden, Dead Kids: Fake AI Content Floods In (Bloomberg)
Conservative chair hints at tax cuts in March and later in year (Reuters)
Did You See?
An ageing population and economic uncertainty means retirement advice remains a cornerstone of financial planning, a new report has found.
NextWealth’s Managing Lifetime Wealth: Navigating Retirement Advice report, sponsored by Aegon, shows over two in three advisers (67%) see people living longer changing demand.
The ongoing cost-of-living crisis, alongside higher interest rates and volatile markets, also continues to impact demand for retirement advice, the report found.
Overall, 58% of the 220 advisers surveyed believe the economic environment will prompt clients to seek financial advice.
This was followed by current pensions and tax rules and allowances, including abolition of the Lifetime Allowance and increases in annual allowance rules.
However, affordability tops the list of factors suppressing demand (19%).
