Clients look forward to the time they can get their hands on the money they’ve saved for years in their pension.

Most can obtain 25% of this tax free. But this is not always used for retirement.

In fact, it can be freed up for all matter of things – and its use will determine the next tax-efficient steps to take.

The following case illustrates how business owners can borrow money from their pension in the most tax-efficient way.

The case

Amrit is aged 57 and owns his own limited company. He’s taking a combination of low salary with dividends just up to the higher-rate threshold for income tax. He’s looking to purchase a commercial property for this company to be based out of and is looking to spend about £100,000 on the purchase.

He and the company both have the money for the extra charges, such as conveyancing and stamp duty. In his area, commercial properties are sold very quickly, so speed is of the essence.

Amrit is aware of a property that has just come onto the market within his price range and he’s keen to put an offer in. He’s arranged to see a financial adviser to discuss the options for purchase.

During the fact find, it turns out Amrit has £400,000 in a Sipp. His adviser may think about this as a tax-efficient way to purchase commercial property, but it’s not the quickest.

Commercial borrowing could also be considered but, again, time constraints could be an issue, and there is also the fact that, due to interest being added, it may not be the most cost-efficient.

The Sipp almost seems ideal, as it is £100,000 that is needed and, as Amrit has never taken benefits from his pension before, it’s within the new lump sum allowance and lump sum and death benefits allowance, so can be easily accessed.

But what do we do with this £100,000 once it’s withdrawn?

Amrit could just take the pension commencement lump sum from his Sipp to cover the cost of the purchase in his own name. This will meet the criteria for speed, but will it be very tax-efficient?

The company will have to pay rent on this, which is then taxed as earned income on Amrit personally. This will then have the knock-on effect on the tax efficiency of taking a low salary and dividends to meet the rest of Amrit’s needs. This may even push some of his dividends into the higher-rate band (33.75% dividend tax in the higher rate as opposed to 8.75% in the basic rate band).

There is a way this could be done more tax-efficiently. He could take the £100,000 tax-free from his pension and make a director’s loan of the same amount to his company. This gives the company the money required to make the purchase and will save the company having to pay rent, building up more profit in his business.

The best part is that, when there is enough money in the business, it can be paid back to Amrit free of tax, as the business is simply repaying the loan.

However, he does lose tax-free cash from his pension, but it’s just shifted where this is being held to his company. As the business doesn’t have this spare money, though, it may take a while to build this up.

The adviser’s strategy is twofold, as the director’s loan ensures the process moves at speed. But, what if, behind the scenes, the Sipp was also preparing to purchase the property from Amrit’s company?

This would limit the growth on any property gain being charged to corporation tax from Amrit’s company and ensures any future gains are tax efficient (there is no tax on the gain inside the Sipp).

The rental money (which would be corporation tax deductible) could then be paid to the Sipp and build up more pension commencement lump sum for Amrit to have in the future. The downside would be there is two times the ancillary costs (conveyancing, stamp duty, etc.), but, over time, the tax-efficiency should pay off. That’s the cost for having to move at speed.

And the cherry on top is the business then has the £100,000 back and can repay the loan to Amrit at any time he finds this to be convenient.

Mark Devlin is senior technical manager at M&G Wealth

A SAVVY seller has shared how they managed to make thousands of pounds by flogging goods on eBay.

Joseph Holman made £250,000 profits as a teenager selling items on eBay, using the cash to buy his first Porsche.

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The Luton-based businessman became known locally as “The eBay King’”thanks to his ability to turn clobber into cash.

He now runs his own eco-friendly home furnishing brand, known as Green Doors, but he has been making money from eBay since he was just a kid.

As a pre-teen Holman invested his birthday and pocket money into a bulk order of magnetic ‘stick and ball’ games, which he then sold on individually.

Joseph, now 33, ended up netting a profit of around £2,000 in just six weeks.

“I was hooked on buying and selling anything I could,” he shared.

By the time he was 16 the savvy youngster had £30,000 saved up from eBay profits, eventually purchasing a moped to make deliveries.

The following year he bought a car, which he said made selling larger items possible as he could go and pick them up.

This decision helped him bag £50,000.

His friends started calling him the “The eBay King”, earning the name by selling everything from soaps to statues and baths to bikes.

He added: “By the time I was 20, I had made over two hundred grand, all from selling things on eBay.”

Joesph is sharing his tips for success after eBay announced it had scrapped fees for private sellers, making it more profitable to sell on the platform.

Now sellers using the marketplace can take home more money when they flog secondhand items including CDs, books, toys and furniture.

Before the change, private sellers had to pay an enormous fee of 13.22% when selling items on eBay.

These included a 12.8% “final value” fee plus 30p per order and 0.42% “regulatory operating” fee.

For a seller listing a chest of drawers worth £20 the change would save them £2.94 in fees.

They will now take home the full £20 instead of the previous £17.06.

For items worth just one or two pounds the fee changes will have an even greater impact.

This is because previously there was a fixed 30p element to how the final value fee was calculated.

On a £3 transaction, this would be equal to 10% of the seller’s total profit, without including the other elements of the fees.

It comes just months after eBay slashed fees to sell secondhand clothes on its website in a bid to compete with other platforms including Vinted and Depop.

Here are Joseph’s top tips for making money on eBay.

Do your research

The eBay king recommends carefully researching the product you are selling – and taking a simple screenshot can mean bagging a buyer willing to pay more.

He said: “Try to find the highest original Recommended Retail Price (RRP) online, take a screenshot of this, and add it to the eBay photos.

The RRP is the price a manufacturer suggests a retailer should sell a product for, but in some cases they can charge higher or lower.

Joesph said by showing customers the highest RRP they can see how much they are saving if they bought it somewhere else.

Cause a stir

To make sure your product stands out Joseph said to list your items as “Buy it Now/Best Offer”’.

By listing your product as “Buy it Now” it means customers can snap it up immediately for a fixed price that you as the seller have decided on.

Alternatively, you can list it as “Best Offer” which allows sellers to invite buyers to negotiate the price of an item.

 For example, you can list an item for £60 but be open to offers either higher or lower.

“This allows customers to quickly purchase your product, rather than waiting for an auction to end, which they might forget to bid on,” he said.

You can set your preferences to automatically accept or decline offers of a certain amount, and use the counteroffer feature to negotiate with prospective buyers.

The counteroffer allows sellers to come back with a different price than the buyer offered.

For example, if someone offers £40 for an item you can go back and suggest they pay £50.

The buyer has 48 hours to accept the new offer from the seller.

Ensure your item is looking the best

Joseph said it is important to know your audience and provide lots of pictures of the item you’re selling to ensure you make a sale.

He said: “Take the maximum number of photos you can upload and a video if necessary, so the customer can see all angles.”

The pro also said sellers should describe any defects to demonstrate that “you’re an honest seller, and provide a clear and engaging description”.

He added: “Understand the product and the type of customer it will attract – listings for a piece of art should be more detailed than those for an IKEA chair.”

Use keywords

When listing an item sellers should also consider using keywords to make their product stand out.

“The eBay title is crucial, especially the first four words, as they affect the algorithm,” Joesph said.

“Make sure to use relevant keywords first and use the entire space available for the title.”

When doing this sellers should pick three to five keywords that relate closely to their item.

Ask yourself what words people are likely to use in a search engine when looking for what you’re selling.

For example, if you are selling a dress from a specific brand make sure you use that in your title.

Once you have these keywords, use them appropriately in your listing title and item description.

You should make sure that you do not make any typos in keywords or listing titles as this can stop customers from finding your product.

eBay is not the only platform you can sell your goods on.

The Sun recently shared top tricks and tips for how to make your items stand out on Vinted.

You can read more about this by clicking the link here.

Commercial legal finance, or litigation funding, litigation finance, or third-party funding, involves businesses and law firms utilizing funds from an external financial provider to cover commercial litigation and arbitration costs.

This funding can take various forms (such as fees, expenses, advances, or portfolio funding) and does not affect control, which stays with the claimant. Normally non-recourse, the capital does not involve debt, with the investment and returns contingent upon a successful resolution.

What Are the Benefits of Legal Aid

Legal aid is frequently the sole support for individuals confronting impactful outcomes like losing their residence, job, or custody of their children.

Studies indicate that offering legal services “substantially reduces cases of domestic violence.” The help provided varies based on the client’s legal issue.

Legal aid attorneys support clients in diverse areas beyond courtrooms, represent them during legal proceedings, and frequently spearhead intricate legal efforts aiming to bring about systemic changes that impact numerous individuals in similar situations.

Who Qualifies for Legal Aid?

Despite the dedicated efforts of lawyers who frequently dedicate their careers to assisting low-income individuals, programs lack sufficient resources. They must prioritize helping the most disadvantaged clients with a limited number of critical legal issues.

Despite this, around half of eligible individuals seeking help from legal aid programs cannot receive assistance. Those who do receive help usually get brief advice and limited services. Those who are not helped must depend on self-help materials and legal information, which are also inaccessible to everyone in need.

Why Businesses Opt for Litigation Financing

Litigation financing provides numerous benefits that appeal to companies dealing with expensive legal disputes. This guide to litigation finance offers additional details on the topic, including why businesses opt for this form of financial support.

Here are several primary reasons why businesses are increasingly embracing this type of financial assistance.

Financial Support

Legal disputes are known for their high costs. With expenses such as attorney fees and court charges, the financial burden escalates rapidly.

Litigation financing eases this financial pressure. This enables businesses to concentrate on their core activities without the concern of growing legal fees.

Risk Mitigation

Litigation inherently carries risks. Even strong cases can crumble, resulting in substantial financial setbacks. Through litigation financing, companies can shift some of this risk to the financing entity.

If the case doesn’t succeed, the business is typically not obligated to reimburse the funds, making it a more secure option.

Resource Allocation

By obtaining external financing, businesses can distribute their internal resources more effectively. Instead of drawing funds from vital areas like research and development or marketing, companies can utilize litigation funding for legal costs. This strategy ensures that legal challenges do not hinder the company’s progress and creativity.

Who Provides Legal Aid?

Legal aid providers come in various sizes and focus areas; some cater to local needs or specialize in specific issues like domestic violence or employment practices, while others handle cases citywide or statewide with minimal constraints on the type of cases.

The total funding for civil legal aid delivery in the U.S. is approximately $1.345 billion. The Legal Services Corporation is the country’s primary financial legal assistance supporter initiative, contributing roughly a quarter of this funding.

LSC, a federally funded nonprofit organization, distributes grants to 134 recipients nationwide. Unlike other funding sources for civil legal aid, grantees receiving federal aid from LSC must adhere to specific advocacy and client eligibility regulations.

Endnote

Seeking legal information and resources demonstrates strength and a proactive stance in safeguarding your interests. Feel free to contact us for assistance, even if you have doubts about eligibility. Let your legal aid organization assess your eligibility and choose to handle your case.

There is still time to register for our flagship conference, Money Marketing Interactive London, which takes place in five days’ time.

This not-to-be missed event, in association with Fundment, will be held at Convene, 155 Bishopsgate, on Tuesday, 8 October.

The day will be packed with intriguing sessions led by industry experts and thought leaders.

Some of the subjects they will explore include the impact of the Consumer Duty twelve months on and the implications of the FCA’s new SDR proposals.

MMI London will feature practical sessions on key supplier relationships including platforms, back-office systems, and investment management options as well as run the rule over tax planning and investment strategies to help advisers provide value-added advice.

NextGen Planners will also be there to talk more on philanthropy and sustainable investing.

Our keynote speaker, broadcaster and journalist will chat to delegates about the impact of the new Labour government on financial regulation.

Timeline’s CEO Abraham Okusanya and Benchmark Capital CEO Ed Dymott will be among those on a panel discussion to help you choose the right tech stack for your business.

The event will give people the chance to connect with peers, experts and potential collaborators during our networking sessions.

The conference is not just about gaining knowledge; it’s an opportunity to foster meaningful relationships that can drive your business’ success.

There will be workshops from SimplyBiz, Albemarle Street Partners, HSBC Life, EV, Verve and a breakfast briefing by The Financial Planning Club too.

Workshop selections are now closed, but there is still opportunity to sign up on the day at the registration desk.

Reserve your 5-hour CPD accredited place today and join us.

You can register for free here.

To see the full agenda, click this link.

THE areas where house prices are falling the most and the “affordable” locations where they’re rising have been revealed.

A typical home in the UK was worth £267,100 in August, 0.7%, or £1,970, more than a year ago, according to Zoopla.

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On a monthly basis, the value of a typical home rose by £700.

House prices are now on track to rise 2.5% higher by the end of the year, Zoopla estimates.

Property sales have increased as mortgage rates are now at their lowest level for 15 months, making it cheaper for homeowners to borrow money.

A borrower who is looking to remortgage and owns 25% of their home can now lock into a five-year deal at 4.3% down from 5.5% a year ago.

On a loan with £250,000 left to pay this would be equivalent to a £250 decrease in the amount they would need to spend on their mortgage each month.

Meanwhile, interest rates have continued to fall as lenders compete with each other to attract borrowers.

The number of buyers looking for a new home and homeowners putting their property on the market has risen as a result.

As more buyers return to the market the level of competition for each home has increased, which has moderately pushed up property prices.

The website said affordability continues to constrain house price growth, particularly in southern England.

Greater choice for home buyers is also expected to keep house price growth in check in the months ahead.

And not all homes are fresh to the market. A fifth of homes currently for sale were previously on the market at some stage in the past two years, according to Zoopla’s data.

Setting the right price is important to attract buyers, Zoopla said.

How have prices changed per region?

Manchester has seen the greatest increase in house prices of any region in England, with the value of a typical property up 2.3% in the past year.

An average home in the city is now worth £227,200.

Liverpool has also seen prices climb in the past 12 months, pushing up the value of a typical property to £160,400, which is 2% higher than a year ago.

But not all regions have seen house prices rise in the last year.

Aberdeen and Glasgow have both seen prices tumble by 1% since last August, the greatest fall of any UK region.

A typical home in Aberdeen is now worth £135,700 while in Glasgow it’s £150,200.

Cambridge also saw prices edge down by 0.1% in the past year but the value of an average home is still well above the national average.

A typical property in the area was worth £469,300 in August, £202,200 more than the national average.

Meanwhile, prices remained unchanged in Bournemouth and Leicester over the past year.

A typical home in Bournemouth is still worth £333,800 after seeing nothing added to its value in the past 12 months.

Meanwhile, an average property in Leicester is worth £226,200 after its value failed to increase in the past year.

Here are the average prices in August and their annual change, according to Zoopla:

• Belfast – £1,78,200, 5.1%
• Manchester – £227,200, 2.3%
• Liverpool – £160,400, 2%
• Glasgow – £150,200, 1.9%
• Leeds – £210,600, 1.7%
• Cardiff – £256,000, 1.6%
• Sheffield – £173,300, 1.4%
• Birmingham – £211,800, 1.3%
• Newcastle – £155,400, 1%
• Nottingham – £203,700, 0.9%
• Edinburgh – £273,400, 0.8%
• Oxford – £452,000, 0.6%
• Bristol – £340,100, 0.3%
• Southampton – £258,400, 0.2%
• Bournemouth – £333,800, 0%
• Leicester – £226,200, 0%
• Cambridge – £469,300, -0.1%
• Aberdeen – £135,700, -0.1%
• Portsmouth – £279,800, -1%

Richard Donnell, executive director at Zoopla said: “Lower mortgage rates are delivering a much-needed confidence boost to homeowners, many of whom have sat on the sidelines over the last two years. 

“Market activity is up across the board and expectations of lower borrowing costs will continue to bring buyers and sellers into the market.”

Who else tracks house prices?

Halifax is part of Lloyds Group, which is the UK’s biggest mortgage lender.

Its monthly house price index is based on the mortgage data it holds and has been going since 1983.

It’s one of several key barometers of the property market.

The official measure of house prices is from the Office for National Statistics, which uses data from the Land Registry where the actual sold price is recorded.

This is the most accurate of all the indices, but the figures come out three months after the homes are sold, so there’s a big time lag.

Halifax and Nationwide each publish a monthly index tracking the average prices of homes on which they provide mortgages.

While they do adjust their figures to iron out big outliers, both lenders measure average house prices based on the properties they see.

As it’s based on mortgage approvals, cash buyers are not included.

Rightmove and Zoopla also publish monthly house price data.

The former is based on asking prices from the property listings on its website.

The latter uses sold prices, mortgage valuations and data on agreed sales.

Neither takes into account the price a property actually sold for like the ONS Land Registry, which could end up being higher or lower and some might not even sell at all.

Here’s the latest data from other indices:

• Rightmove (September 2024) +0.8% monthly, +1.2% annually
• Nationwide (August 2024) +0.7% monthly, +3.2% annually
• Halifax (August 2024) +0.3% monthly, +4.3% annually
• ONS Land Registry (July 2024) +2.2% monthly, +2.2% annually

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

ZeroKey has brought on board former FE fundinfo head of proposition Stephen Mitchell in an advisory role.

He previously spent 18 years at FE fundinfo and spanned both the asset management and financial advice sides of the business, including FE Analytics and FE CashCalc.

Since leaving FE fundinfo earlier this year he has taken a variety of advisory roles, which he will combine with his latest role with ZeroKey.

ZeroKey co-founder and chief executive Joseph Williams said: “Steve is a big believer in how 1% improvements can all add up to make a significant difference.

“His approach is therefore completely aligned to what we are seeking to achieve with ZeroKey, but more importantly Steve brings with him vast knowledge and experience, and will inject an exciting dynamic into the team.”

Mitchell added: “I passionately believe in the theory that the aggregation of marginal gains can slowly but surely transform our profession and help to close the advice gap.

“So as soon as I heard what Joe [Williams] and Matt [Wiltshire] were up to, I was keen to get involved. They are a formidable team and I’m very excited by what’s to come.”

The news of Mitchell joining ZeroKey comes shortly after the publication of NextWealth’s latest research, which highlighted integration between systems is still a significant pain point and re-keying data is a major source of frustration.

This further added to the findings published independently by Intelliflo and FE fundinfo earlier this year and original research by Origo and the Lang Cat in 2019.

ZeroKey is currently available to use in beta mode.

This includes integrations with both Intelliflo and Iress, as well as ‘quick actions’ into FE CashCalc, Voyant, 7IM, Fidelity, Fintegrate, Fundment, Oxford Risk, Transact, Aviva, Timeline, Mabel Insights, M&G and Abrdn.

A ‘quick action’ is a feature that is designed to help streamline repetitive tasks, such as manually keying client details into a platform.