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Should I buy or should I rent?

The UK has one of the highest home owning percentage rates in the world. No matter how many times we experience boom or bust, the British like the idea of buying their own home.

Part of the attraction is not just financial, but the sentiment of owning your own home, not worrying about having unreputable landlords, and being able to paint your walls whatever colour you want.

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Should your life insurance policy be in trust, and who will benefit from it?

So, you’ve already arranged a life insurance policy, or you may be about to do so. Perhaps you’ve done this to cover a debt such as a mortgage, or to provide a lump sum for your partner or your financial dependents. But should this policy be in trust? Who will get the money and how long will it take?

If you have made a will then it will contain a list of who you wish to receive the benefits of your estate, but before this can be carried out your executors will have to apply for a grant of probate. If you haven’t made a will, any assets will be subject to the Laws of Intestacy which could see them go to the wrong people.

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Pensions Dashboard – Is it time to review your old Pensions?

Did you know that there is over £400million sitting in pensions that people have lost? 1

1 https://www.thisismoney.co.uk/money/pensions/article-4644230/Is-worth-combining-pensions-one.html

On average people undertake 11 jobs during their lifetime which could mean 11 different pensions. This makes it very difficult to work out how much money you will actually have once you retire.

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Income Protection – why wouldn’t you want to protect your income?

Income Protection, also known as IP insurance, can help financially support you if you are unable to work and suffer a loss of earnings as a result of an injury or illness.

When you think about it, the most important skill you possess is being able to work and earn a living to pay for all the nice things in life. Unfortunately, the human body is not indestructible and is prone to getting injured or suffer from various ailments.

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Independent Mortgage Advisers – Why you should speak to them before anyone else!

Even seasoned home owners can find buying a property a complicated and confusing experience, particularly as it’s something most of us only do occasionally during our lifetime. So why should you speak to an Independent Mortgage Adviser before anyone else?

For first time buyers, the process can be even more baffling, so they need a professional, independent mortgage adviser, on their side. 

Although it was a few years ago now, I still remember the initial excitement of buying my first home.  I also remember the stress, worry and anxiety that went with it, which is why I absolutely believe it makes sense to talk with an independent mortgage adviser before even thinking about looking at houses! This applies to anyone, whether you’re a first timer, home mover, or buying a property for investment. It’s important to understand what’s currently happening in the mortgage arena.

We can help with more than just the mortgage

For me, and my fellow advisers at Temple Mortgage, it’s more about forging a two-way relationship (which doesn’t end once the mortgage starts but continues for many years as your life and circumstances change). We will work together on your current situation, finding out where you want to get to and help you to devise a plan and a timescale to get there.

Most advisers go that extra mile and offer practical advice too – I for one wished I had someone like this back in 1992, as I had so many questions. It’s one of the reasons my Financial Services career moved in this direction! Additionally, having access to the whole of the marketplace puts you as the buyer in a better, more informed position all round.

Using an independent mortgage adviser can save time and a lot of stress!

Lots of things can impact on borrow-ability including salaries, employment status, how long you’ve been employed/self-employed, credit commitments, credit status, and age, among other things. We can help you work out who to go to which can be a time-consuming process.  An independent mortgage adviser will recommend a lender from the whole of the market to achieve the best mortgage based on your specific circumstances.

Apart from advising and arranging on the mortgage itself, our services tend to go a lot deeper than just a transaction as the needs and understanding of mortgages can vary from client to client. An experienced mortgage adviser will pitch the advice at the right level, ideally before a property has been found.

How an independent mortgage adviser can help you…

A mortgage adviser can help in many ways, but some in particular include advice on:

  • What a mortgage is and the house buying process. It needs to be explained in plain English by someone who has the knowledge, but more importantly, empathy! 
  • How much can be borrowed, which I call ‘mortgageability’. It’s not just a case of walking into the local bank and they lend the money! It’s competitive out there, some lenders may not be as competitive as another, or their lending policy may mean they won’t lend at all.  This could cost you both time and money, and trying several different lenders has its own implications
  • The Help to Buy scheme and the additional factors that need to be considered with this
  • Reducing your outgoings and advice on what lenders will look for when assessing mortgage applications to be in the best position possible to move forward when a potential home is found
  • Saving for a deposit (including government bonuses such as the Help to Buy scheme) and advising on ways to boost your savings
  • The likely costs involved – solicitors, surveys, arrangement fees etc
  • What information lenders will need so it’s readily available, and if not, there is time to facilitate this
  • How credit scores affect borrowing and ways to improve it, if necessary
  • Making an offer on a property and negotiating with the Estate Agent
  • Recommend other professionals to help such as a solicitor, surveyor or Estate Agent, if you don’t already have one
  • Be there when it gets frustrating and understand the stresses involved
  • What happens at each stage of the process and keeping all parties informed – effective communication is a fundamental part and can help the wheels run more smoothly.  Who does what and why! 

In a nutshell, using an independent mortgage adviser can make life that little bit easier. Having a professional overseeing the process with the lender, estate agent and solicitor, will leave you to concentrate on the more enjoyable side, such as looking at furniture or planning your new kitchen!

To find out how we can help you, whether you are a seasoned home owner, or you are looking at saving for and buying your first house, contact Diane Blackman by email diane.blackman@templemortgage.co.uk, call Temple Mortgage on 01305 213150 / 07977 467117, or send us a message on our Contact Us or Diane’s Facebook page.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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Inheritance tax – What is the main residence nil rate band?

Inheritance tax can cost loved one’s thousands of pounds in the event of your death, yet it’s possible to legally avoid huge swathes of it, or possibly pay none at all.


Benjamin Franklin said “the only things certain in life are death and taxes”
Inheritance Tax (IHT) touches on both.

My first entry is to do with the main IHT allowances, and to explain the new main residence nil rate band allowance, namely who is entitled to the new allowance and what it is all about.

The most important thing to do is examine whether you’ll pay inheritance tax and what to do about it. The following could help you to decide to reduce your potential Inheritance Tax bill or do nothing at all. The rules discussed here include the Government rule changes introduced by George Osbourne in 2015 that now give people an extra property allowance.

Inheritance tax is the tax paid on assets (after inheritance tax allowances are deducted) left when someone dies.

Where to start?

A good place to start from is by making sure that your WILL is up to date, and it details who is to benefit from your estate when you are gone. Reviewing it periodically will ensure that as your estate increases in value, the planning is an ongoing process to prevent you passing your hard-earned wealth to HMRC and not your family when you have died.

Firstly, you need to assess how much your estate is worth, then deduct your debts from this to give the value of your estate. Your assets include: cash in the bank, investments, any property or business you own, vehicles and pay-outs from life insurance policies, your entire wealth.

Every individual living in the UK is entitled to a £325,000 Inheritance Tax Nil Rate band.

On death, when your estate value is added up and valued above £325,000, anything above £325,000 it is currently taxed at 40%.

A married couple’s Executors on death would able to claim two Nil Rate Bands making a nil rate band total of £650,000; and if they qualify, would be able to also claim from the 2017/18 tax year the Main Residence Nil Rate band (which, from April 2020, is a further £175,000 each – making an individual’s total Nil Rate band of £500,000 and a married couple’s £1,000,000).

So, this would exclude most estates from any payment of Inheritance tax. But, and there are always buts, there are certain conditions around the Main Residence Nil Rate Band and in Part 1 the following should explain this in some detail for you, and you could see if you qualify for this added tax benefit.

How does the new ‘main residence nil-rate band’ work?

New for the 2017/18 tax year was the additional ‘main residence’ allowance. Known as the residence nil rate band. It is only valid on a main residence and where the recipient of a home is a direct descendant (classed as children, step-children and grandchildren). This is gradually being phased in and is what you’ll get on top of your existing allowance.

For the tax year 2019/20, it’s starting at £150,000 (meaning a total allowance of £475,000), rising by £25,000 in 2020 until it reaches £175,000 (meaning a total allowance of £500,000).

So, in 2019/20 tax year, the maximum that can be passed on tax-free is £950,000 for married couples or those in a civil partnership, £475,000 for others. For singles, this is made up of the existing £325,000 Nil Rate Band, plus the extra £150,000.

For couples, when the first one dies their allowance is passed to the survivor, so that £475,000 is doubled to £950,000.

By the 2020/21 tax year, the tax-free amount will rise to £1 million for couples (made up of £325,000 x 2 plus £175,000 x 2) and £500,000 for singles (made up of £325,000 plus £175,000), as the main residence allowance rises.

In the 2019/20 tax year, everyone can leave an estate valued at up to £325,000 plus the new ‘main residence’ band of £150,000 giving a total allowance of £475,000 per person. From the 2020/21 tax year the residence band will rise to £175,000 making a total of £500,000 each in total. So, for any estate valued under this their beneficiaries won’t pay inheritance tax. The amount is set by the Government and is called the nil-rate band, because it’s the amount you pay a ‘nil-rate’ of IHT on.

The Main Residence Nil Rate Band (RNRB) is for generational passing down of the benefit – namely the property in your WILL has to be passed to sons and daughters, blood line. If it is not, then it cannot pass the test and you would only be eligible for the standard IHT NRB of £325,000 and not the main residence NRB of £175,00 from April 6th, 2020. (current Main Residence Nil Rate Band is an added £150,000 from April 6th, 2019)

Above that amount, anything you leave behind is subject to tax of 40% (or 36% if you leave at least 10% of your assets to a charity).

For example…

If you leave behind assets in 2019/20 worth £500,000 (assuming you have just one property), your estate pays nothing on the first £475,000, and 40% on the remaining £25,000 – a total of £10,000 in tax – if you’re not leaving anything to charity. Officially, the £325,000 limit has been frozen until at least 2020/21, while the additional main residence allowance will be phased in until April 2020.

On estates worth between £1 million and £2 million, inheritance tax will be paid as normal on the amount above the tax-free amount. On estates worth £2 million or more, homeowners will lose £1 of the ‘main residence’ allowance for every £2 of value above £2 million. So, for a couple, properties worth £2,350,000 or more will get no additional allowance.

So, how much tax do you pay?

Your estate will owe tax at 40% on anything above the £325,000 inheritance tax threshold when you die (or 36% if you leave at least 10% to a charity) – excluding the ‘main residence’ allowance (see below). Some simple actions can save you thousands, yet sadly many people ignore it, either not wanting to consider the future or simply unable to broach it with relatives for fear of seeming grasping.

Former Chancellor of the Exchequer George Osborne revealed in July 2015’s Summer Budget that he’d scrap the duty when parents or grandparents pass on a home worth up to £1 million (£500,000 for singles). This is being phased in gradually, reaching a £1m exemption for couples in the tax year 2020/21.

The current nil rate band allowance is charged on the first £325,000 (per person) of someone’s estate – which is the value of their total assets they leave behind when they die. Couples can leave a home worth £650,000 without it attracting inheritance tax (singles £325,000). Above the threshold, the charge is 40%. This remains unchanged. What is new is the introduction of a new ‘main residence’ band.

Exemptions from inheritance tax

People in certain ‘risky’ roles are exempt from paying inheritance tax if they die in active service. Included in this are armed forces personnel, police, firefighters and paramedics, plus humanitarian aid workers.

The exemption also comes into play if a person who was injured on active service has their death hastened by the injury, even if they’re no longer on active service.

Other questions that need answering are:

When you die, assets left to your spouse or registered civil partner, provided they’re living in the UK, are exempt from inheritance tax. On top of this, your partner’s inheritance tax allowance rises by the proportion of your allowance that you didn’t use, meaning together a couple can currently leave £950,000 tax-free.

What if I’m not married? – While transfers of property and other assets between married couples or civil partners don’t attract inheritance tax, this isn’t the case for unmarried couples. If you’re not married, but own assets jointly with another person, the situation gets complicated, especially where a residential property is involved. Your liability to pay IHT will depend on whether you and your partner own the property as ‘joint tenants’ or ‘tenants in common’ and whether there’s a will.

If you’re joint tenants – (you both own all the property), and your partner’s left you everything in the will, then if your partner’s assets, including the property, exceed the £450,000 inheritance tax threshold, you’d have to pay it on any assets in the estate above that. After your partner’s death, your property would then be owned by you in its entirety.

If your partner didn’t leave a will – thanks to something called the ‘right of survivorship’, the property would still go entirely to you although the inheritance tax rules above would still apply. However, your partner’s family would still have a claim to his or her share of other assets such as insurance policies and pension investments.

A good place to start is with your WILL and needs to state clearly who is to be the beneficiary of your estate following your death. Your estate includes your hard-earned property that includes everything from savings investment and property of all types. For Inheritance Tax all your property as far as HMRC is concerned means the value of all worldwide held assets including property held in the UK.

Next quarter I will follow up with the HMRC permitted allowances for inheritance tax and how they can play a part in reducing your final inheritance tax bill, as well as the gifting allowances and other available solutions you can use. In the meantime, enjoy the Spring and the coming Summer months.

As an Independent Financial Adviser, I would be pleased to assist with any questions you might have.

Most importantly, if you found this interesting and want to know about all the solutions now then please contact me, David Rackham, at david.rackham@templewealth.co.uk or on 01329 282882 / 07734 17268, where I would welcome your call.

The Financial Conduct Authority does not regulate Inheritance Tax Planning or Wills. Level of taxation may be subject to change and their value depends on your individual circumstances. The content of this article is for information purposes only and based on our current understanding of legislation, which are subject to change.

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Help to Buy ISAs: Are they as good as they sound?

For first-time buyers who are saving toward a deposit, opening a Help to Buy ISA really is a no-brainer. Offering a 25% bonus of the total you have saved, in addition to interest accrued, there is no other savings account that can get close to these returns.

For many first-time buyers, saving for a deposit represents the biggest hurdle between them and getting on the property ladder. For this reason, the Help to Buy ISA will be music to many people’s ears.

The government backed scheme means that for every £1,000 you save, the government will credit you with an additional £250. This type of return is streets ahead of traditional savings platforms and is why over 1 million people have opened accounts since their inception.

If you want to reap the rewards of this scheme you will need to act fast;
the deadline to open a Help to Buy ISA account is 30th November 2019.

The account allows for regular saving; the first instalment can be of up to £1,200, with a maximum of £200 able to be deposited in each month thereafter. Whilst there is no limit on the amount that can be saved into a Help to Buy ISA, the bonus is capped at a maximum of £3,000. In other words, you will attract the 25% bonus on the first £12,000 of savings only. Given the monthly caps on deposits, it would take just over four and half years to qualify for the maximum bonus so opening an account early is essential to fully make use of the scheme.

The accounts are available to anyone aged 16+ and can be used to buy a property of up to £250,000 (£450,000 in London). If you are looking to buy with a partner or friend, you can each open an account meaning your bonus could total £6,000.  Although the accounts are designed for longer term saving, the bonus can be applied to as little as £1,600 meaning it is still worthwhile opening an account, even if you are as little as three months away from purchasing.

What are the alternatives?

In some circumstances, a Help to Buy ISA may not be the best fit; perhaps you wish to buy a property in excess of the threshold or you wish to deposit more than the ISA allows.

Whilst the Help to Buy ISA has had much press, the Lifetime ISA (LISA) has flown largely below the radar. One of the reasons for this is the lack of availability; to date, only a handful of providers offer the LISA. Another is its name; the Lifetime ISA is predominantly thought of as product for retirement planning.

Lifetime ISA (LISA)

Sure enough, a LISA has many benefits for retirement planning, but it can also benefit first time buyers in much the same way as a Help to Buy ISA, with some key differences.

With a LISA, you are not capped at £200 per month and you can pay in anything up to £4,000 per financial year, in a lump sum or regular instalments. This could suit you if you already hold savings as you can invest much more quickly. With the end of the tax year just a few days away, you could make a £4,000 deposit now (before 5th April 2019) and then invest a further £4,000 as soon as 6th April 2019.

Upon withdrawal, the LISA will also qualify for the 25% bonus, providing the account has been open for at least 12 months. The £4,000 yearly limit means a potential bonus of £1,000 per year with essentially no cap on the maximum bonus allowed (the bonus is capped at £33,000 meaning you would have to have the account for more than 33 years to hit the limit).

The LISA also allows for a higher purchase price outside of London with a £450,000 limit applicable anywhere in the country.

There are many factors that will determine which type of account is right for you. The table below highlights some of the main features and differences of each:

Help to Buy ISA vs Lifetime ISA

  Help to Buy ISA Lifetime ISA
Opening ageAnyone aged 16+ Anyone aged 18-39
Maximum contribution£200 per month (£1,200 in the first month) £4,000 per tax year  
Maximum property value£450,000 £250,000 (£450,000 in London)  
Maximum bonus£3,000 £33,000
Penalty if you don’t buy a house None
(You just don’t get the bonus)
Yes, unless you leave it until you are aged 60+    
How long before the account qualifies for bonus Once you have saved £1600 (minimum 3 months) 12 months from opening the account
When is the bonus paidOn completion On exchange  

Should you have any questions, or need help deciding if a Help to Buy ISA is best for you, please contact one of Temple Wealth’s advisers. We can advise you on all aspects of the house buying process – from beginning to save for your deposit to finally buying a house and getting the right mortgage for you.

Call 01329 282882 or use the form on our Contact Us page.


The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

Your home maybe repossessed if you do not keep up repayment on your mortgage.

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Planning for the end of the 2019 tax year

With the help of a financial adviser and some simple financial planning ahead of the tax year-end (5th April 2019) you can make the most of the tax allowances available to you such as your ISA and pension Annual Allowance.

ISA allowance

You have a £20,000 ISA allowance each tax year. This is a ‘use it or lose it’ allowance as it cannot be carried forward if it is not fully utilised. This allowance will remain at the same level in the 2019/2020 tax year.

There are 4 types of ISA and you can put money into one of each kind of ISA each tax year:

  • Cash ISAs
  • Stocks and Shares ISAs
  • Innovative Finance ISAs
  • Lifetime ISAs

An ISA such as the Help to Buy ISA can be beneficial if you are saving to buy your first home. First time buyers get a 25% bonus from the Government on savings in a Help-to-buy ISA. The maximum bonus you can receive is £3,000 (if £12,000 has been saved). The deadline for opening a new Help to buy ISA is 30th November 2019.

With a Junior ISA,a UK child under 18 can currently save up to £4,260 in one tax year.

A financial adviser will be able to help you find the type of ISA most suitable for you and your investment goals.

Pension Annual Allowance

UK individuals can ‘normally’ contribute up to £40,000 gross, or up to their annual gross income, per tax year into a pension scheme. This allowance will remain at the same level in the 2019/2020 tax year.

Funds are tax efficient within a pension although the Lifetime Allowance (currently £1,030,000) limits the total amount you can accrue in a pension pot without an additional tax charge. 

You can take a look at our previous blog to find out if you are making enough pension contributions.

The Annual Allowance can be carried forward, subject to a few rules. If you have been a member of a pension scheme but have not fully utilised your Annual Allowance for the previous three tax years, you could be able to carry this forward to make a larger contribution in the current tax year.

Tapered Annual Allowance – this is when the Annual Allowance is reduced by £1 for every £2 of ‘adjusted income’ over £150,000. It can affect you if your income from all sources is over £110,000.

Inheritance Tax

The Inheritance Tax (IHT) nil rate band is currently frozen at £325,000 until 5th April 2021.

Inheritance tax planning can enable you to utilise the available exemptions including:

  • Annual Exemption – up to £3,000 can be given away each tax year and unused amounts can be carried forward and utilised in the next tax year.
  • Small Gifts Exemption – up to £250 can be gifted to as many people as you wish each tax year.
  • Gifts out of Income – you can gift regular disposable income if your income often exceeds your expenditure.
  • IHT efficient investments can benefit from business property relief and are then IHT exempt after being owned for two years. These investments can be high risk and financial advice should be sought.

Capital Gains Tax 

The annual exemption for the current tax year is £11,700. This is also an allowance that cannot be carried forward if it is not fully utilised. Unused losses are carried forward and can be offset against future gains.


2019/2020 tax year – changes to some of these allowances

Minimum/Living Wage

After 6th April 2019, the minimum wage for 18-20 year olds will increase from £5.90 to £6.15 per hour. For 21-24 year olds it will increase from £7.38 to £7.70 and for anyone aged 25+ it will increase from £7.83 to £8.21 per hour.

Personal Allowance

This will increase from £11,850 to £12,500 in the 2019/2020 tax year.

Lifetime allowance

This will increase from £1,030,000 to £1,055,000 in the 2019/2020 tax year.

CGT Annual Exemption

This will increase from £11,700 to £12,000 in the 2019/2020 tax year.

One of our independent financial advisers at Temple Wealth Management can advise you on how best to plan for the end of the tax year, as well as how to fully utilise your available allowances in the new tax year.

To discuss your end of tax year planning needs, contact one of our advisers on 01329 282882 or use our website contact form.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. The Financial Conduct Authority does not regulate Tax Advice.