Money
Our experts
Q&A: Inheritance tax, SERPs, mortgages and tax incentives on property
Saga Magazine money expert John Husband answers your personal finance questions in his regular Money clinic Q&As:
Q: Are there any tax incentives for buying second or third houses and ring-fencing them into a retirement fund, and would the same tax incentives apply if I were to rent them out?
A: I'm afraid not. When the Government announced its intention to give investors more freedom in investing for retirement there were hopes that this might include homes, second homes and even holiday homes. But the Government has specifically ruled out Self Invested Pension Plans (SIPPs) investing in homes or possessions such as cars, fine wines, art and antiques. However, you can invest through through pension in commercial property through Real Estate Investment Trusts - REITs.
Q: My wife and I have been separated for 10 years but we never divorced. Would there be any inheritance tax to pay if I left all or part of my estate to her in my will?
A: Not if you are still legally married, as transfers to a spouse are exempt.
Q: Many years ago I opted out of the State Earnings Related Pension Scheme - SERPs - and put money into a personal pension instead. I am now 55. Should I stay out of SERPs or rejoin it?
A: You are probably better off opting back in, because the state scheme now offers better money for the value invested. However, if you intend to retire before you reach your official state retirement age your private pension has the bonus that you can take it any time after you turn 50. If you can afford it, I would suggest you opt back in to SERPs and continue contributing to your private pension, as you cannot have too much pension. Also take a look at the FSA factsheet The State Second Pension - should you be contracted out? This will help you make a decision about how you want to take your benefits and your attitude to risk.
Q: My son wants to buy a house but several estate agents won't let him make an offer until he has a mortgage. Surely he must find a property first?
A: Estate agents are keen to see that he can afford to buy. Contact a financial adviser who can work out what he can afford to borrow. The adviser can run credit checks with the most suitable lender and provide an "agreement in principle". This states how much the lender would be happy to lend.
* John Husband's answers represent his own opinions and are for general information only. Always seek independent financial advice. Email John your personal finance questions at web.editor@saga.co.uk
