Professional Connection Newsletter

30th October 2007

Welcome, to the Cockburn Lucas Professional Connection Newsletter. In this edition, there are 2 themes. Firstly, our thoughts on recent market changes and secondly, exciting news of 2 new areas of service for you. Under the first theme we give our take on the continued volatility in the financial markets and look at reaction to the Pre-budget report. For the second theme, mortgages and the irresistable new Pension Review Service.

We hope you enjoy our latest missive and as always for further details on any of the articles please contact us on:

Telephone: 0115 9476005. Website: cockburnlucas.co.uk E-mail: tr@cockburnlucas.co.uk

Mike Horseman reveiws the continued volatility in the markets - Between a rock and a hard place

The credit squeeze over the last couple of months has been well documented and has, not only contributed to a first run on a British bank for many decades, but has also fuelled extreme volatility within financial markets. This has cast a shadow of fear and uncertainty, which, in turn, has caused governments to act swiftly, injecting liquidity into markets in an attempt to limit the damage.

It’s at times like these that many clients will, quite rightly, be concerned about their own investment portfolio and asset allocation, the security of their investments and the stability of the institutions holding those funds.  At Cockburn Lucas, we vigorously screen all of our investment partners to ensure we are able to continue to provide peace of mind to our clients. 

Our multi-asset investment approach, which spreads portfolios across all the major asset classes, has fared extremely well over the past few months and has been a key component in producing low volatility and positive returns in our clients’ portfolios.  Also, the decision to increase our positions in gold in our portfolios has benefited tremendously, as the price of gold has continued to rise to the current level of $760 per ounce.

All in all, it’s been a very interesting summer in financial markets and it’s fair to say that we feel market volatility is likely to continue over the coming months, so both investors and trustees would be well advised to review their asset allocation and take appropriate advice in relation to risk and reward of their investments now.

Contact us for further information on protecting investments from market volatility.

The Cockburn Lucas take on Alistair Darling's first pre-budget announcement

Much has already been said about the Chancellor’s Budget and the various initiatives aimed at capturing the Nation’s hearts and minds.  Leaving, arguably, the best until last, the Chancellor announced an effective doubling of the inheritance tax nil rate threshold for married couples and registered civil partners who may have not otherwise used both nil rate bands.  This measure is welcome and will come into immediate effect as at 9 October 2007.  Additionally, the new measures will also apply to existing widows, widowers or bereaved civil partners who die on or after 9 October. 

Less welcome were the proposed simplification rules for capital gains tax through a move to a flat rate of 18% and the withdrawal of taper relief and indexation.  Although any move towards simplification is welcome, individuals benefiting from business asset taper relief will not fare as well. The new regime will increase the tax payable upon selling a business from 10%, after a qualifying two year period, to 18% in April 2008. Any clients considering selling their business will need to assess the benefits of realising gains before or after these changes are implemented, as the former could result in substantial savings. For existing entrepreneurs, the increase in tax rates from 10% to 18% would does seem anti-business, considering the risks involved in setting up a company.

One of the other interesting effects of the simplification to capital gains tax may well be how this impacts on individual circumstances when considering an appropriate investment structure.  Many clients may well already be holding onshore life assurance bonds – either with profits or unit linked – on the basis of being able to draw 5% tax-deferred income.  The internal rate of tax on these bonds is 20%, coupled together with a further 20% tax payable on surrender for a higher rate taxpayer. Whereas the purchase of, for instance, a collective investment scheme, will qualify immediately for a CGT exemption of £9,200 with a flat rate of 18% tax on any gain over this allowance. Therefore, we would suggest that the sale of investment bonds to higher rate taxpayers, or, indeed, the continuation of those structures, may now need to be reviewed.

All in all, there are plenty of planning opportunities for both new and existing clients to review their own tax position and investment strategy following on from these announcements.

Please contact us if you wish to discuss the implications for clients of the pre-budget report. You can also find further information in the Technical Services Update from Bankhall

But Cockburn Lucas don't do mortgages! We know that... but we also know some very good men who do.

Mortgages-Online – Independent Mortgage professionals

We have recently arranged a strategic partnership with the Nottingham based Mortgages-Online, who have just celebrated their 10th anniversary. When they started 10 years ago they were the first to offer a mortgage service on the internet, hence the name!

For the first four years, they operated completely via the internet but as they grew they realised that their core strengths of online mortgage trading and electronic communication could support a more personalised service for higher net worth clients and professional organisations. Over the years, they have developed an impressive list of satisfied customers including many top flight footballers, cricketers and some of the world’s finest golfers as well as various other celebrities.

Director Robin Johnson says “We have a great reputation with our clients and look forward very much to working with and assisting Cockburn Lucas’ clients and professional connections with their mortgage requirements”.

Services offered by Robin and his team are

• Home purchase mortgages
• Remortgages
• Overseas property mortgages
• Holiday home mortgages
• Mortgages to capital raise

If you have any new mortgage requirements or just need to review your current mortgage, we have arranged for two mortgage specialists to be assigned to Cockburn Lucas clients and professional connections.

Matt Truman – 0115 9082408; matt.t@mortgages-online.co.uk or

Robin Johnson - 0115 9082407; robin.j@mortgages-online.co.uk

If you call them directly please quote 'Cockburn Lucas' to ensure that you receive the finest service. If you are anything less than delighted with Matt and Robin please let us know.

And finally, we are delighted to announce the launch of our all new Pension Review Service. At Cockburn Lucas we have great deal of experience of advising on and dealing with all pensions - Parry and Angus both hold the G60 Pensions qualification with the CII. Additionally, Self Invested Personal Pensions are an area in which we have been developing our expertise for many years.

We are aware that reviewing pension arrangements is something that is rarely of high priority for any individual. However, getting the type of pension and range of investments right now will offer substantial benefits in the long run.

We are, therefore, offering you and your clients the chance to have a free no-obligation review of your pension arrangements. Whether considering a SIPP, worried by the investment performance of your current pension provider or would just value a second opinion please let us know and one of our charming advisers will contact you or your client to arrange to carry out the review.

Further details of the service can be found here. As always if you have any questions then please get in touch.

Cockburn Lucas.

Telephone: 0115 9476005. Website: cockburnlucas.co.uk E-mail: tr@cockburnlucas.co.uk

The views/opinions expressed in this newsletter do not constitute personal advice or a recommendation - it is important to seek independent financial advice.

Cockburn Lucas Independent Financial Consulting Limited. Authorised & regulated by the Financial Services Authority. Registered address Milton Chambers, 19 Milton Street, Nottingham NG1 3EU. Registered Number: 3365186

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