Q&A: Your money queries

Mar 13 2010 by Iain Laing, The Journal

Your money queries are answered by Peter Rutherford, senior director of Rutherford Wilkinson Ltd, Chartered Financial Planners.

Q: The Budget is on March 24 and I am wondering what I should do to prepare for it. What would your recommendation be?

A: It is impossible really to speculate with any confidence what will actually appear in the Budget. However, it is likely that we will see further tax rises on things that are considered to be generally harmful, ie, alcohol and cigarettes, as well as green taxes on such things as fuel.

They are always the old chestnuts and the easy targets. However, even if you could predict a huge increase in, for example, capital gains tax there is little you could do to sell an asset in time to avoid this. Consequently all I would recommend is to ensure you take advice and to take full advantage of any allowances that you may have.

Q: Should I invest in the new Fidelity China Special Situations Fund which has been launched? I am interested because Anthony Bolton is managing it. What is your opinion?

A: Firstly you should never invest in a fund unless it matches your objectives and appetite for risk. It is anticipated that this type of fund will be quite volatile. Consequently you have to be prepared to accept this. Certainly Anthony Bolton, before he retired in 2007, had an excellent record of investing in the UK. However, China is rather different, which then creates some doubt. In addition this is an investment trust which often falls to a discount after launch. In other words the value of the assets held may well be higher than the share price of the investment trust itself. Consequently, it is possible to lose money even if the shares held by the trust did not go down in value. It is usually better to buy in the secondary market. Finally, Anthony Bolton has committed to this new fund for only a period of two years. He is investing a considerable sum of his own money in this but it does rather smack of marketeering from Fidelity. Bolton does have a legendary reputation and it seems to me that Fidelity is piggy-backing on this and the well-known China story. At the end of the 90s there were many launches of technology funds just before the bubble burst.

Q: I am in a common law relationship with my partner. However, I cannot persuade him to make a will. Most of the assets are in his name only and I would like to know what my position will be if he dies.

A: A common law relationship is not recognised in English law. Consequently, you will have no standing and no rights to any property owned by your partner. You will not even be recognised under the laws of intestacy. Consequently it is absolutely essential that you explain this to your partner and that a valid will is put in place to give you some protection. If this is not the case then an ex-spouse, children or his parents, brothers and sisters would benefit from his estate rather than you.

If after explaining this to him, he is still unwilling to make a will then I would suggest you change your “partner”.

To request a free "Investor's Guide" and put any questions you would like answered please contact me at Rutherford Wilkinson Ltd, Northumbria House, 21-23 Brenkley Way, Blezard Business Park, Newcastle upon Tyne, NE13 6DS. Website www.rwpfg.co.uk . Telephone 0191 217 3340 or email peter.rutherford@rwpfg.co.uk

Rutherford Wilkinson Ltd is authorised and regulated by the Financial Services Authority.