From: a@b.invalid (A Dodger)
Subject: Re: Selling up, nursing home etc etc.
Date: Tue, 16 Aug 2005 11:36:34 +0100
Newsgroups: uk.finance

In <313030303339303043012E6E01@zetnet.co.uk>, J L Williams wrote:


> 
> His house(his only one and his main residence) has now been sold to 
> pay
> for his fees...£280K
> This is to be invested and it is hoped interest plus pension plus a
> litle draw-down will pay  fees (£500.00+/week) for his forseeable
> future.
> 
> a) Is there a simple one best answer for investment of this sum?
>

No :-)

In a very similar situation in the family 2 years ago, one component of 
the 'strategy' that we invented was a 'purchased life annuity'.  Part 
of the house sale proceeds were converted into a top-up pension, 
payable until death and designed so that expected living costs 
(including nursing home cost escalation) would be fully funded without 
having to touch the remaining sale proceeds, which have just been kept 
in a 'high' interest online savings account.

We thought (and continue to think) that was a smart idea simply because 
there was a family history of extreme longevity, and we wanted to 'buy 
out' at least some of that risk.
 
> b) Will the income derived from this investment be taxable (assume 
> usual
> tax rates...89yo...wife died 5 months ago) Would be paying basic rate 
> of
> tax on works pension plus state pension.
> 

Possibly :-)  Depends what it's invested in, and should be a secondary 
consideration anyway.  I'd suggest you aim to keep things as simple as 
you possibly can, given our own experience of having to use an Enduring 
PoA to deal with the finance industry :-(

> c) He has left a mountain of paper work indicating ownership of 
> shares,
> stocks, bonds and gilts. There is little or no indication of those 
> whose
> value has been realised. Is there an easy way for us unknowledgeable
> peeps to find out which is which?
> 

If original certificates are missing, and there's no sign of a 
solicitor/accountant/bank holding things in safekeeping, I think he'd 
have to write to the registrars of the issuing companies.  
Incidentally, it will probably be far easier to do this kind of thing 
if he can still sign his own letters rather than having to wield the 
PoA.

> d) PoA says that the mound in c) might be £20K's worth if it's all
> realisable, is any of this liable to CGT or any other tax? (Bearing in
> mind house value above) Assume realising there total value asap.
> 

House should probably fall outwith CGT as sole residence;  realisations 
of less than £32k (?) and profits of less than £8k (?)  on the 
securities in a single tax year would also be exempt, I think.

The reason for realisation is....  simplification?  There seems to be 
no burning need from a strictly financial pov.