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What is a Lasting Power of Attorney (LPA) and what are the potential benefits of holding one.

What is an LPA?

A Lasting Power of Attorney (LPA) is a legal document that lets you (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help you make decisions or to make decisions on your behalf.

An LPA would give more control over what happens to you if you had an accident or an illness and can’t make your own decisions if you lack mental capacity. The donor needs to be 18 or over and have mental capacity when making an LPA.

Two types of LPAs which would give power to your attorney enabling them to make decisions such as:

Wondering where to start with retirement planning?

The first 5 steps for pension and retirement planning.

Money Purchase Annual Allowance (MPAA) does this affect you?

What is MPAA?

The MPAA is in connection to the annual allowance for pension contributions which is £40,000 however you can carry forward unused pension contributions for the previous three years. The MPAA was introduced on 6th April 2015. It was £10,000 in tax years 2015/16 and 2016/17. MPAA was reduced to £4,000 from 2017/18, It remains at £4,000 in 2018/19.

Incapacity Crisis: Why you need a Welfare Power of Attorney.

The number of people living with dementia worldwide in 2015 was 47 million; by 2030 that figure will reach 75 million. A new case is diagnosed every 3.2 seconds.

With these shocking statistics it is not surprising that there is a widening gap between the rising number of people likely to lose capacity and the relatively small number who have arranged a Health and Welfare Lasting Power of Attorney (H&W LPA). Only 928,000 H&W LPAs have been registered with the Office of the Public Guardian. This suggests there are 12 million people at significant risk of losing mental capacity who have not made proper arrangements for their care in old age.

What is tapered annual allowance and how does it potentially affect you?

What is the Annual Allowance for pension contributions?

There is an annual limit on the total amount of pension contributions that each person can make without incurring a tax charge (this includes employer and employee contributions) which is called the Annual Allowance. Where the total employer and/or individual contribution exceeds the Annual Allowance a tax charge will apply. The rate of tax will be determined by your taxable income in the tax year. For the 2018/19 tax year the Annual Allowance has been set at £40,000.

Inheritance Tax (IHT) payments to HRMC climb over £5 billion!

The table below shows the total amount of IHT collected each year by HMRC over the last 7 years. The total for 2010/11 was £2.7 billion compared to £5.2 billion in 2017/18. This trend is likely to continue.

How does IHT work?

IHT is typically based on the total value of a deceased person’s estate. When someone dies, the first step is to establish whether the estate is `excepted’ or not. There are three types of `excepted’ estates.

Matrix Capital Ltd
Little Hudwick
Monkhopton
Shropshire
WV16 6TG

Tel: 01746 712 900
Fax: 01746 712 901
Email: info@matrixcapital.co.uk


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