Since you ask

Mar 28 2006

By Peter Rutherford, The Journal

Your money queries answered by Peter Rutherford, chief executive of Rutherford Wilkinson plc, independent financial advisors. Mr A H from Westerhope asks: I have been reading about Real Estate Investment Trusts (REITs). Can you explain a bit more about these? Answer: REITs were first mentioned in last March's budget and further detail was given in the Chancellor's pre-budget speech last December and will probably become available from next January. In simple terms REITs are to be quoted companies where at least three-quarters of its business derives from a "qualifying letting business." This core business must contain at least three properties with no single property exceeding 40% of the total value of the rental properties that the REIT owns. It is anticipated that these will be allowable investments within personal equity plans, individual savings accounts and pension schemes, but we will have to wait for further details which should come out in the 2006 Finance Act. Story continues ADVERTISEMENT Mrs P J from Stocksfield asks: My mother has recently placed some investments into a trust for the benefit of my children, with a view to reducing her potential inheritance tax liability. I'm not a beneficiary but I'm a trustee along with my mother. It is her wish that the children can have the money when they reach 25, which means some of the money will be invested for over 17 years. Other than signing over the funds when my children reach 25, is there anything else I need to do? Answer: All trustees have a very responsible job. You are required to invest the funds as any prudent person would do, taking account of the timescale to each of your children's 25th birthdays. As trustees, you and your mother should review the performance of where the funds are invested and if appropriate make adjustments. Reviews should take place at least annually and be documented. To this end, I recommend that you should take professional advice from an independent financial adviser. Miss J S from Byker asks: I work for a company that does not have a pension scheme, but I do have a private pension I fund myself. If the National Pensions Savings Scheme proposed by Adair Turner comes in, will I have to pay into that as well? Answer: I think that we are a long way from any National Pensions Savings scheme being introduced but, eventually, something like this will come. The way it is being proposed is that it will not be compulsory to join, but you will need to opt out if you don't want to be in it. The figures I have seen suggest you would need to put in 3% of salary, your employer 4% and the Government would add a further 1%. As this is very much in the debate stage, we will need to wait and see how things develop. *********** Investors Guide is a booklet with information on all aspects of investment and is available to readers. To apply for your free copy, freephone (0800) 074-5489 or write to me at Rutherford Wilkinson Plc, 21-23 Bridge Street, Morpeth, Northumberland, NE61 1NT. Please also write with any queries you would like answered. Rutherford Wilkinson Plc is authorised and regulated by the Financial Services Authority.

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