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Many homeowners in Wales ‘failing to protect their family’s financial futures’

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ALMOST a third of homeowners in Wales are failing to protect their family’s financial futures

25.01.2024 – Almost a third (32%) of adults in Wales have not made financial arrangements to protect their families when they die, new research has revealed.

A survey, by Lycetts Financial Services (LFS), also revealed that 32% do not understand how Inheritance Tax could affect their loved ones.

“Most people focus on earning enough to buy a home and accumulate other assets during their lifetime,” said Nick Straker, LFS Divisional Director. “They regard this as more important than considering the potential tax consequences further down the line.

“However, the start of a new year is the ideal time to take stock of your financial assets and circumstances, and plan for the future. It could be the most important resolution you ever make.”

Currently, the first £325,000 of an estate is not subject to Inheritance Tax under the “Nil Rate Band” (NRB). Where the family home is also passed to a direct descendant then the NRB is boosted by a further £175,000 to £500,000.

If a couple are married and pass assets each to other, then the NRB can be inherited so that it can be up to £1million on the last to die. However, the rise in property values in recent years has still seen more people’s assets exceed the threshold and be subject to a 40% tax rate.

Straker said: “A Potentially Exempt Transfer (PET) allows you to make financial gifts of unlimited value without there being an Inheritance Tax liability. The only proviso is that the individual making the gift must survive for the following seven years, and that the gift itself is potentially subject to Capital Gains Tax (CGT) on transfer.

“Before committing to PETs, consideration should be given to what your future financial needs may be. With life expectancy increasing, you need to consider how much income you will require to continue living the life you want to lead.

“The problem of giving assets away is that you don’t know how long you are going to live and there may also come a time when you need to pay for care and nursing home costs.

“The wisdom of making a PET when your children may be young, impulsive and have not yet established themselves, is another important consideration. Generally, people are getting married later and having children later, so planning becomes more difficult.

“Life Insurance, however, is a good short term measure. It provides protection for loved ones if something were to happen unexpectedly, and is relatively inexpensive. When your children are likely to be settled and more mature, and you have a better idea of your financial needs going forward, a PET might then be explored or other IHT plans can be considered.”

Straker also reinforced the importance of building up a pension fund, which can offer further financial support for a spouse and family.

“Pensions are highly tax efficient and are not affected by Inheritance Tax. You are never too young to start saving for your pension and should aim to build as big a fund as possible.

“My final piece of advice is to seek guidance from an experienced financial adviser. An audit of all assets is a good starting point to plan for the future.

“A YouGov survey revealed that that only 31 per cent of those who made resolutions in 2023 kept them all, but arranging your finances is one you should definitely stick to.”

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Business

Johnston holiday lodges expected to be approved

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PLANS for 20 self-catering holiday lodges in the Pembrokeshire village of Johnston are expected to get the go-ahead next week.

An application before the May 21 meeting of Pembrokeshire County Council’s planning committee by Peter Rawsthorne seeks permission for the short-stay lodges and associated works on land behind The Larder, Vine Road.

The application, sited near a collection of single storey buildings associated with Silverdale lodge which are currently in use as temporary emergency accommodation, is recommended for delegated conditional approval.

A report for planners says: “The application seeks full planning permission for the siting of 20 short-term stay holiday lodges.  The lodges would be positioned on concrete bases either side of a central access road running through the length of the site.

“Comprising of either two or three bedrooms, each unit would have the benefit of an associated car parking space and raised veranda to provide access into the unit and an external amenity area.  The lodges will be finished with timber or timber effect cladding to the walls under a shallow dual pitched roof of metal sheeting with a UPVC framed fenestration and rainwater goods.”

It adds: “The proposal will generate some noise, odours and artificial light nuisance in comparison to a currently vacant site.

“Given the close proximity, at the southern end of the application site, to existing residential in Silverdale Close and Acorn Drive the Head of Housing and Public Protection has advised that a Noise Impact Assessment (NIA) should be required prior to the determination of the application to allow for the assessment of all noise emissions from the proposed development and for this to set out proposed measures of how to attenuate any noise nuisance.

“Consideration has been given to whether requiring such an assessment would be reasonable or necessary to make the development acceptable.

“It is acknowledged that the nature of the use of the site as proposed could generate some noise and disturbance, and that there is likely to be a heightened awareness to this for existing occupiers when the site is first occupied, compared to the current vacant use of the site or its previous use as an informal garden space for occupiers of the Silverdale lodges.

“However, the residential occupation of the space, albeit by short-term visitors who may have less regard for existing permanent residents, is a use typical of and expected in this service centre sized settlement and could be satisfactorily absorbed.

“Excessive noise and anti-social behaviour are matters which can also be dealt with by other legislative controls.”

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Tafarn Sinc community pub’s call to keep disabled access granted

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A PEMBROKESHIRE community pub, which earned the support of a Hollywood star, has been allowed to keep a disabled access walkway and restored platform used for performances by local choirs.

In a retrospective application submitted to Pembrokeshire Coast National Park, Cymdeithas Tafarn Sinc sought permission to retain works at the Tafarn Sinc community pub in Rosebush.

In its submission, the community group said: “An existing platform adjacent to the pub has been restored and slightly expanded; with a new access walkway installed.

“The walkway was added for Health and Safety reasons and allows both able bodied and disabled people to safely access the platform. The platform is used for a variety of activities, such as performances by local choirs.

“The platform was formerly railway platform on a small branch line, and has been restored to look as it did when it was operational.”

The works were undertaken in 2022, the application said.

Tafarn Sinc had been in danger of closing when the old landlord and landlady retired back in 2017 but a huge fund-raising effort that attracted worldwide interest – including support from Hollywood star Rhys Ifans – meant it is now owned and run by the local community.

Campaigners raised a staggering £325,000 in little more than three months to buy the pub and keep it open and at the heart of community life.

Other public figures like Huw Edwards, Jamie Owen, Dewi Pws, Dafydd Hywel and ‘Heno’ presenter Mari Grug gave their support, with £200 shares bought by people from all over the world.

An officer report for the scheme proposed said: “The pub itself is constructed from corrugated metal and has an historical, industrial appearance. Historically, Rosebush Railway Station was adjacent and to the west of the pub building, built as part of the same development in the latter 19th century.

“A section of the Maenclochog Railway and platform still exist and form part of the pub and village’s visitor attraction. An inaccessible platform mock-up of a family of passengers had existed prior to this current development.”

Recommending approval it said: “The scale of proposal is proportionate to the existing ‘railway’ features and will create little impact on the special qualities of the National Park.

“There is concern however that the proposal could create an amenity impact for which this proposal has not been assessed for. An appropriate condition restricting the use of the development to prevent harmful noise pollution is therefore included.”

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Council set to lease Haverfordwest airport in bid for financial stability

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SENIOR Pembrokeshire councillors are next week being recommended to lease Haverfordwest airport as part of plans to make the council-run facility, which had a circa £119,000 deficit last  year, cost-neutral to the authority.

Last year, Pembrokeshire County Council’s Cabinet, members heard the financial position at the council-supported Haverfordwest/Withybush airport deteriorated in 2022/23, with an out-turn position for 2022/23 of £238,000.

In March of this year, Pembrokeshire County Council’s services overview and scrutiny committee backed a recommendation that a lease to an existing stakeholder / established aviation company was pursued, including a wider stakeholder consultation.

A report before members at that meeting said the £238,000 loss had been reduced to an expected £119,000 for 2023/24 “following an extensive review of the operations of the airport”.

The report listed reasons for the halving of this deficit, including: an increased profit margin on fuel £40,000; increased landing fees £7,000; reduction in staff training £8,000; reduction in equipment and equipment maintenance costs £10,000; and a reduction in one off costs of hedges and sewers £53,000.

Following the scrutiny meeting, a more detailed recommendation is to be presented to Cabinet on May 20, and, if approved, would be dealt with under the delegated authority of the Assistant Chief Executive, with relevant input from officers.

The report before Cabinet says, following discussions with existing stakeholders: “It seems likely that the council would be able to agree a lease of the airport to an experienced and well-established aviation company who is an existing stakeholder with a good track record.”

The lease would be for an initial 10-year term, with a requirement to obtain/keep a CAA [Civil Aviation Authority] Cat II licence and at a market rent.

It adds: “This option would make the airport cost-neutral to the council from the day the lease is signed whilst also ensuring that an operational airport remains for Pembrokeshire to benefit from.

“The council intends to exclude Hangar 5 [indoor trampolines] from any lease as it is not part of the operational area of the airport and doesn’t house an aviation-linked business. This enables the council to keep the rental income from this property.

“The council also intends to include an option to take back, at no cost, part of the airport that may have the potential to be developed as a solar farm or industrial units.  Any staff currently employed at the airport would transfer to any new tenant/operator.

“Any lease would have to allow the operator to run the airport on the commercial terms of their choosing to give a chance of long-term sustainability, so, the council will lose full control of how the airport operates.

“However, any lease will require that the airport be maintained to an acceptable standard and that a CAA Cat II licence is maintained. If these terms of the agreement are breached, then the facility will return to the council.”

The report finishes: “It should be of note that an alternative proposal has recently been put forward by another existing stakeholder who does not have aviation experience.

“The proposal is one of a land swap whereby the council would exchange the airport land for other land owned by the stakeholder concerned. If this option were to be taken, the council would relinquish all its interest and any element of control it has in the airport, and accordingly there is no guarantee that an operational airport would remain in the county.”

It is recommended the former proposal is adopted; that the airport is leased to an existing stakeholder and established aviation company.

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