Archive for November, 2009
Employee Share Schemes – Are the proposed changes all bad news?
For many, receiving shares or options from your employer is a welcome benefit. There are usually no immediate tax or cash flow implications and you simply get access to a new investment that, hopefully, will grow in value.
The May 2009 budget proposed changes to the treatment of these benefits which are likely to affect both the issuance and immediate implications of employee share schemes in the future.
Currently, as a recipient of shares or options under an employee share scheme , you get the choice on when to pay tax on the benefit you receive. If you do nothing, you will be deemed to defer the tax until a later date (the “cessation time”). Alternatively, you can elect to pay tax on the discounted benefit upfront by making an election in your tax return.
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The ‘Secret’ to Wealth Creation
Will a good financial adviser create wealth?
Many in the financial planning and wealth management industry want you to believe they hold the secret to creating wealth. They’ll guide you into the right investments. They’ll use their superior technical skills to minimise tax. And, perhaps, they’ll suggest you borrow and invest to accelerate your wealth accumulation.
Some would want you to believe they can perform the financial equivalent of alchemy. But, realistically, the best a truly competent, professional adviser can offer is to help you develop and effectively use the financial resources or capabilities you already have.
In saying this, we do not want to denigrate the value of good advice. It can be substantial, particularly compared with the damage that can result from poor advice or naïve do-it-yourself wealth management attempts. But the ability to provide that value does depend on having some good raw material to work with.
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