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UK Parliament

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The UK general election has resulted in a hung parliament, with no single party achieving a sufficient majority. While this was initially unexpected, understanding the political landscape gives us a guide to navigate through uncertain markets.

The Political Landscape

The biggest surprises included a surge in support for the Labour party, an impressively increased younger-voter turn-out of over 70% and the SNP conceding seats to both the Conservatives and Labour.

The Conservative party’s prior majority of 17 seats have been lost and the impact that this will have on Brexit negotiations is sharply in focus.  With the Conservatives seemingly performing badly in ‘Remain’ constituencies, it seems that Brexit was a major factor in this result.

There is enormous uncertainty, but at the time of writing the most likely outcome of this is a Conservative minority government, formed with the support of Northern Ireland’s Democratic Unionist Party (DUP) which would produce a slim majority of around 5 or 6 seats.  It currently also looks likely that Theresa May will remain in her role, but we would not be confident of this longer-term.  If no deal can be achieved, a further general election could be scheduled for later this year, potentially in October.

With the deadline for a Brexit deal being immovable this is a setback for the UK’s position, potentially delaying the start of talks (which were due to begin on the 19th June) and the ability of our ambassadors to commit to deals.

Impact on the Markets

While the level of uncertainty is heightened, this is a localised event and thus far we have not seen a significant effect outside of UK equity markets and the currency markets.  The Pound has fallen on the news and the effect on markets has been similar to that experienced after the Brexit vote, although nowhere near as severe.  Those companies whose revenues are largely based in non-sterling currencies, which dominate the FTSE 100, have risen but those that are more domestically-focused have fallen. 

There may be complex and unexpected changes in the coming weeks, but we remain confident that our robust preparation will protect assets where necessary and capitalise on opportunities when they arise.

Tom Sparke, Investment ManagerTom Sparke IMC, CertPFS (DM)
Investment Manager
Gibbs Denley

Email Tom

 

Gibbs Denley London to Cambridge Bike Ride Team

The team, from both the Cambridge and Bury St Edmunds offices, will be cycling around 60 miles – a combined total of 360 miles between the team!

Starting from Pickett’s Lock in north London, the ride winds through beautiful countryside to the finish at Midsummer Common in the heart of Cambridge, where there will be music, refreshments, beer tent and a celebration. 

In the team are Sally Keys, Dawn Chamberlain, Mark Dunnett, Ed George, Benjamin Benson and Megan Entecott.

The London to Cambridge Bike Ride is an annual event run by Bike Events, with hundreds of other people taking part.

To support Arthur Rank Hospice Charity, you can sponsor the team here: https://www.justgiving.com/fundraising/GD-bike-ride

 

Elaine Pink, Marketing & Development ManagerElaine Pink came to Gibbs Denley in 2001, when the company bought a St Neots-based insurance broker Stuart & Verity. She had been with Stuart and Verity since 1985, after starting as an underwriter with General Accident straight out of school. In those first years she soon discovered that she much preferred broking to underwriting, as she got to work much more closely with clients.

Although she began as a general broker, Elaine had been specialising in Schools and Student Travel Insurance for a number of years by the time she joined Gibbs Denley. Elaine is now Marketing & Development Manager and, although she now has responsibilities across the entire business, she still leads the Schools and Student Travel team.

As well as the daily operational tasks of the team, Elaine is responsible for negotiating with insurers to ensure that our Schoolsguard and Studentguard services meet the varied needs of our Language School clients and offer the best terms possible. She is also responsible for Marketing for both the Insurance Services and Financial Services side of the company.

“Having worked in the Language Travel and Education Sector for so many years, you get to know a lot of people along the way,” says Elaine. “The client is always at the heart of everything we do.  Understanding what is going on in their world and what matters to them is so important.”

Outside of work, Elaine loves to travel and often enjoys walking holidays. She lives in St Neots with her husband, and enjoys spending time with their two sons, and their partners. She loves nothing more than being outside in the fresh air.

Insurance Premium Tax Increases to 12% The latest increase takes the rate of tax from 10% up to 12%, meaning that the rate has doubled since 2015. It had previously been increased from 6% to 9.5% in November 2015, and then from 9.5% to 10% in September 2016.

Who will this affect?
This increase will affect all non-exempt insurance policies where cover starts on or after the 1st June 2017. This will include personal insurance, such as car and home insurance, as well as commercial insurance for businesses and property owners.

Guide to Relevant Life Policies

Relevant Life PoliciesThe final instalment in our Business Protection Assurance post series looks at Relevant Life Policies. Other posts are: Introduction to Business Insurance, Shareholder (or Partnership) Protection, Business Loan Protection, and Key Person Protection.

Relevant Life Policies at a glance:

What is it?

Who is covered?

Who benefits?

A tax-efficient individual life assurance policy that company directors and owners can buy through their business, provided they are classed as an employee.

The employees of a small business.

 

NOT sole traders or partners.

The family of the insured individual.

 

This type of assurance is also sometimes known as a ‘death-in-service’ benefit, as the family of the insured person receives the payout, not the business itself.

Larger employers usually have a group policy covering all of their staff, although this is often linked to their pension scheme. This aspect of Business Protection is often seen as a benefit of employment, rather than directly covering the business itself. The benefits to the business come in the form of encouraging high quality staff to join you, and keeping them once they do join. 

For smaller businesses it isn’t always possible or cost-effective to set up a group death-in-service scheme. This is where a Relevant Life Policy can be useful.

Relevant Life Policies only cover individuals who receive a salary from the business. Therefore, sole traders / partners are not eligible for this type of cover (however, this does not preclude them from arranging individual life assurance, paid for out of their personal income).

A Relevant Life Policy can be used to cover company directors and business owners, provided it is a UK company and they receive a PAYE salary.

Taxation of Relevant Life Policies

Relevant Life Policies are tax-efficient because the premiums are usually an allowable business expense, which means that they can be offset against the Corporation Tax bill.

Contrast this to setting up personal life assurance paid for out of your post-tax (or net) income, which effectively works out much more expensive after your remuneration has been subject to Income Tax, Employers’ National Insurance and Employees’ National Insurance Contributions.

Therefore, higher-rate Income Taxpayers in particular can find that it is much cheaper to purchase the same level of life assurance cover through a Relevant Life Policy.

Other benefits of Relevant Life Policies

  • It is distinct from pension contributions, meaning the pension ‘lifetime allowance’ (£1million for 2017/18) is unaffected.
  • Individual cover, meaning that if a director or employee leaves the company, they can maintain their policy without further underwriting, simply by taking over payment of the regular premiums personally.
  • More comprehensive cover. Typical death-in-service cover pays out three or four times an employee’s salary; Relevant Life Policies can insure up to 25 times your earnings (depending on your age and the insurance provider).

Furthermore, total remuneration can be taken into account, including (for example) salary and dividends, opening up further tax planning opportunities without affecting the level of life cover in place.

If you would like to know more about this, or any other part of Business Protection Assurance, then get in touch with us now.

This article is for information only, and does not constitute specific advice. We recommend speaking with a qualified professional before purchasing life assurance.

Craig Hilton, Associate Director and financial planner at Gibbs DenleyBy Craig Hilton DipPFS
Associate Director
Gibbs Denley
Email Craig