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Morfitt & Turnbull

Issue 3   

Mulligan’s New Recruits?!

I will start by wishing you all a very Happy New Year and convey best wishes from all at M&T for 2012, although we are already almost two months in and fast approaching the upcoming historic events of the Queen's Diamond Jubilee, the London Olympics and my parents 50th wedding anniversary
(this one may not get as much publicity as the others)  - how time flies by!

2012 is a pivotal year on a number of financial matters too. As a pensions man at heart there is the start of the roll out to all employers of having to enrol all employees into a pension scheme as well as capping maximum pension funds to £1.5m from 6th April 2012. Also don’t forget to look at ISA and pension contributions before the end of the tax year and if you are in the business of having a business, a bit of pre year-end Corporation Tax planning is always worth looking at. If you want to talk about any of these then give me a call on 01565 624370.

I’ll be back again in April for more from the M&T family, and who knows, if I can talk Gareth into letting me have my own way, there could be a couple of new additions too by then...



Martyn takes interviewing staff to a new level 
following the M&T Christmas party!

The Greek bailout package - made simple!!
There is so much press coverage regarding the turbulent situation in Europe so here's how the complicated financial system actually works...

It is a slow day in a little Greek Village… The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.

On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.
    The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the taverna. The publican slips the money along to the local “lady of the night” drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit. The “lady” then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.
The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything. At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism.

And that, Ladies and Gentlemen, is how the bailout package works!

Adam’s Technical...
Inheritance Tax planning
This month Adam focuses on how to tackle potential Inheritance Tax (IHT) liabilities…

Inheritance Tax (IHT) is a tax which is payable on the estate of an individual who has died. It has been around for many years and its current form was introduced in 1986 but it does go back as far as 1796 when it was used to raise funds for the Napoleonic war.
If the deceased’s total estate is below £325,000 (2011/12) no tax is payable. If it’s above this amount then the tax rate is 40% on the excess. In 1857 tax was applied to an estate valued at over £20! The “IHT net” is trapping more people now, mainly due to the increase in house prices as well as the £325,000 limit set to remain fixed until 2015.

Some ways to plan for IHT is to gift away capital and reduce the estate value. In many circumstances this cannot be done as assets are in use and money is needed to maintain standard of living.

One way to look at meeting the tax liability is to set-up a guaranteed Whole of Life plan. With this type of plan, an amount called the sum assured equal to the tax that would be due is secured by paying regular premiums like a standard term life policy. However the premiums are paid until death and most importantly the sum assured is guaranteed to be paid out.

There is the option to increase the sum assured at regular intervals within certain limits, for example, to keep pace with inflation or meet an increase in the tax liability. The plan needs to be placed in a suitable trust so that on death the sum assured can be paid directly to the beneficiaries, not to the estate, to meet the tax liability immediately.


The table on the right gives an idea of the premium payable at set ages. These figures are based on a male first life and female spouse 3 years younger, fixed sum assured of £100,000 with the benefit paid on second death.

You should also be aware that tax laws now allow, on the first death, for an individual to inherit their spouse’s £325,000 (or a percentage of it) provided that it has not been used previously.

If you would like to speak to us regarding IHT planning and this, as well as other, options open to you, please get in touch with your usual Adviser at M&T on 01565 624370.


Individual's Age

Monthly Premium
40  £56.39
50  £76.80
60 £113.53
70 £207.25
79 £354.25

These figures are for illustrative purposes only and are not guaranteed

Gareth Says... 
Watch the FTSE!

Always with an eye on the stock markets, Gareth this month has made a very interesting observation...

“The FTSE appears to be heading back to the 6000 mark (it is 5782 at time of writing). It has been a struggle for the past few years, however consider this - the first time it passed this mythical barrier was actually back in March 1998, nearly 14 years ago!”.

Staff Matters
One of the major investment managers, JP Morgan Asset Management, run a “fantasy fund manager” league whereby you have a fantasy £100m to invest in funds with the aim of generating the best returns over an 11 month period. As a bit of fun, all of the staff at M&T have entered especially as there is a “team competition” where we all pull together to beat other firms involved.

As is usually the case with such things, competitive spirit soon overtakes the fun and it is pleasing to see that since it started on 5th December the M&T team sits atop the team competition! (see right)
Still a long way to run until November but considering there are over 10,000 individuals taking part, this shows that when it comes to fund selection, you are in the best place with us!!!


No. 1 Booths Park, Chelford Road, Knutsford, WA16 8GS
Tel: 01565 624 370   Email: 

Morfitt and Turnbull (Management Services) Limited 
Authorised and Regulated by the Financial Services Authority.
Registered Number 740613 England

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