A Since April 1999 it has not been possible to take out a new Tessa, as both Tessas and Personal Equity Plans (Peps) were replaced by Individual Savings Accounts (ISAs) at that point.
However, it is possible to roll over the original capit
al invested in your Tessa (up to a maximum of £39,000) into a Tessa-only ISA without affecting your overall contribution levels into ISAs. It is not possible to roll over any interest earned on your Tessa and this will have to be invested elsewhere.
Q I am one of four receptionists at a dental surgery. The partners have decided it would improve "first impressions" if we all wore a uniform. We are all quite happy because it saves us having to wear our own clothes. The uniforms are from a well-known high street store - not from a specialist outfitters - and we each had an input into the choice of outfits. We are worried that this may be seen as a "perk" and that we might be taxed. Could you advise? A It is becoming increasingly popular for people to wear uniforms. However, you are right to be concerned about the tax implications. If you couldn’t wear the outfit outside work - for example butchers’ overalls, mechanics boiler suits, nurses uniforms etc - then there isn’t a problem.
If the uniform is suitable to wear outside the office, then you could be taxed - but not if the uniform carries a conspicuous logo or badge making it clearly identifiable as a uniform and therefore unsuitable to wear privately.
Q I am self employed and have my own self invested pension plan. Can I use the fund to give loans to my wife or myself? My wife is not a member of the plan. A No. Loans to members or any persons connected with a member are expressly prohibited under the regulations governing these plans.
Q Can you suggest a monthly savings plan which might be suitable for me? I’m female, in my early 20s, and I envisage being in a position to put away £70-80 a week over the next 15 years or so. You wish to save surplus cash, but do not mention your attitude to risk, which needs to be considered carefully. Options could include high interest savings accounts with banks or building societies, a mini cash ISA, and mini or maxi equity ISA, or a collective investment such as a unit trust or Open Ended Investment Company (OEIC).
As you do not mention issues such as your attitude to risk, whether you are a nil, basic or higher rate tax payer, whether you are employed or self employed, whether you have a requirement for accessibility to your capital, or require tax efficient investments, I suggest you work with a suitably authorised Independent Financial Adviser to establish the most appropriate products. IFA Promotions (0117 971 1177) may be a good starting point.
Q For 25 years I have run a decorative lighting business but recently my business partner suffered a heart attack and has decided to retire. Rather than dissolve the partnership we decided to sell the business. A rival has offered to buy us out and as part of the deal has invited me to become a non-executive director. Will my responsibilities now be limited? A Directors’ responsibilities, whether executive or non-executive, are considerably more onerous than those of a partner or sole trader: directors undertake personal responsibility for the company so they must always be informed about what is happening within the business.
As a director, you must always act in the best interests of the company, which is not necessarily the equivalent to the best interests of the shareholders. You must make sure that the business complies with the Companies Act, which involves filing accounts regularly and informing Companies House of changes to the Board. Failure to meet these conditions can result in fines for both the company itself and individual directors.
Q I took out an endowment policy in conjunction with my interest-only mortgage five years ago and have become concerned after reading reports in the press that the maturity value could be insufficient to repay the mortgage. Should I surrender my policy? After five years it is unlikely that your policy will have accumulated a value that is greater than the premiums paid and, in fact, the surrender value may be very low. Before you even consider surrendering the policy I suggest you ask the policy provider to send you an illustration that estimates the policy value at the maturity date. This should give an indication as to whether a shortfall is likely. I suggest you discuss this further with an independent financial adviser, who will be able to suggest alternatives to simply increasing monthly premiums, which are appropriate to your circumstances, for example, using ISA allowances or changing your mortgage type to a repayment mortgage.
If you would like to ask a question about tax or financial planning then please write to the Tax/FP team at Grant Thornton, 1/4 Atholl Crescent, Edinburgh. Answers given are for guidance only
