A new survey from the IBEC-affiliated industry representative body, Retail Ireland, shows a slight improvement in business sentiment within the sector; but the big numbers are largely unchanged from earlier in the year.
In terms of sales outlook, profitability and business confidence, roughly half of respondents indicated no change to their feelings.
Around 30% of retailers, according to the survey, expect their sales to decline over the course of the next three months; with just over 20% anticipating a rise.
"The results of the survey show an improvement in sentiment in the retail sector, but it is important to note that participating companies completed the survey before developments over the last two weeks involving Greece and the eurozone," said Torlach Denihan, director of Retail Ireland.
"We did this special survey to assess the situation in view of developments such as the decline in cross-border shopping and the slight but noticeable improvement in the consumer confidence index," he added.
"Retailers’ perceptions of the prospects for their own businesses are improving, expectations on sales are broadly static and a very slight increase in customer numbers is expected."
Mr Denihan reiterated Retail Ireland’s call for an overhaul of the commercial rental system.
"Prices to the public have been cut substantially and every element in the retail supply chain has made a major contribution to this, with the exception of landlords. They locked in massive and unsustainable rents during the property boom.
"Every landlord should reduce rents on a voluntary basis in the interest of lower prices for the consumer, saving retail jobs and helping the country regain lost competitiveness," he said.
Monday, May 24, 2010
Sunday, May 9, 2010
Mortgage debt market showing signs of life
Over the last few days it has become apparent that transaction numbers in the UK mortgage debt market have increased significantly. Indeed a number of investors who have acquired large mortgage debt portfolios, often for well below their face value, have now stepped forward with discount offers if customers remortgage their homes with new lenders. So how does this work?
If you for example you purchased a mortgage debt portfolio with a face value of £200 million but only paid £150 million there is the potential to lock in a profit if you can persuade underlying customers to remortgage elsewhere by offering a 20% discount. Effectively the portfolio of mortgage debt was acquired for a 25% discount to face value so if customers move after accepting a 20% discount then the investor is locking in a profit of 5% on the transaction. This is just one of a number of opportunities available in the mortgage debt markets for those willing to take the risk that the UK property market is over the worst.
In some ways this can be classed as a win-win situation with investors able to lock in profits while underlying mortgage customers are able to re-mortgage their homes elsewhere after pocketing a 20% discount on their outstanding debt.
If you for example you purchased a mortgage debt portfolio with a face value of £200 million but only paid £150 million there is the potential to lock in a profit if you can persuade underlying customers to remortgage elsewhere by offering a 20% discount. Effectively the portfolio of mortgage debt was acquired for a 25% discount to face value so if customers move after accepting a 20% discount then the investor is locking in a profit of 5% on the transaction. This is just one of a number of opportunities available in the mortgage debt markets for those willing to take the risk that the UK property market is over the worst.
In some ways this can be classed as a win-win situation with investors able to lock in profits while underlying mortgage customers are able to re-mortgage their homes elsewhere after pocketing a 20% discount on their outstanding debt.
Monday, April 26, 2010
Deal of the Week - L&G rebates Isa charge
Legal & General is offering to rebate half its annual management charge for
2010 on new individual savings account (Isa) investments made before April 30.
The cashback offer covers a wide range of fund-based Isas from the life insurer, including index trackers, actively managed funds, and income-oriented plans.
It is available to new and existing customers, including those transferring a lump sum of at least £3,600 from another Isa firm.
The minimum required for a new Isa is £3,600. The charge refund will be made in February 2011. Is this good?
The one-off rebate could be worth up to 0.75 per cent of a fund Isa’s value. On a £3,600 investment, this would equate to a saving of about £27.
For a low-cost tracker fund, however, the saving is a lot less. For example, L&G’s popular UK Index fund has annual charge of 0.4 per cent, so the refund would be 0.2 per cent – about £7.
An extra rebate of up to £50 could be claimed by subscribing via a cashback website such as Quidco.com.
What’s the catch?
The cost-savings could be easily outweighed by short-term stock market falls, so investors shouldn’t be swayed by the April 30 deadline. Some analysts urge caution over equity investments at the moment.
What’s the alternative?
Selftrade, the online stockbroker, is offering commission-free trading to earlybird Isa investors.
Those paying in more than £10,000 (up to the new £10,200 stocks and shares Isa limit) by 30 April receive 10 free trades worth £12.50 each. Subscriptions of £5,101 to £10,000 receive three free trades; smaller investments are given one free trade. All trades have to be used by May 31 2010.
Some investment brokers, including Hargreaves Lansdown and Cavendish Online, rebate annual commissions on fund Isas. These can be worth 0.5 per cent a year in some cases. How do I find out more?
2010 on new individual savings account (Isa) investments made before April 30.
The cashback offer covers a wide range of fund-based Isas from the life insurer, including index trackers, actively managed funds, and income-oriented plans.
It is available to new and existing customers, including those transferring a lump sum of at least £3,600 from another Isa firm.
The minimum required for a new Isa is £3,600. The charge refund will be made in February 2011. Is this good?
The one-off rebate could be worth up to 0.75 per cent of a fund Isa’s value. On a £3,600 investment, this would equate to a saving of about £27.
For a low-cost tracker fund, however, the saving is a lot less. For example, L&G’s popular UK Index fund has annual charge of 0.4 per cent, so the refund would be 0.2 per cent – about £7.
An extra rebate of up to £50 could be claimed by subscribing via a cashback website such as Quidco.com.
What’s the catch?
The cost-savings could be easily outweighed by short-term stock market falls, so investors shouldn’t be swayed by the April 30 deadline. Some analysts urge caution over equity investments at the moment.
What’s the alternative?
Selftrade, the online stockbroker, is offering commission-free trading to earlybird Isa investors.
Those paying in more than £10,000 (up to the new £10,200 stocks and shares Isa limit) by 30 April receive 10 free trades worth £12.50 each. Subscriptions of £5,101 to £10,000 receive three free trades; smaller investments are given one free trade. All trades have to be used by May 31 2010.
Some investment brokers, including Hargreaves Lansdown and Cavendish Online, rebate annual commissions on fund Isas. These can be worth 0.5 per cent a year in some cases. How do I find out more?
Tuesday, March 30, 2010
Friday, March 19, 2010
5 things to know about permanent life insurance
1. It's more coverage than most people need
The main purpose of life insurance is to protect your family's finances when you die. Permanent insurance does that for your entire lifetime, while also providing an investment component -- savings build within the policy, and you can tap or borrow against this "cash value."
In contrast, basic term insurance provides coverage for a set number of years for a much lower premium. At the end of the term, you typically get no cash back. But by then your kids will be grown and your house paid for, so the policy will have done its job, says insurance adviser Glenn Daily of New York.
2. It may not be your best investment
Permanent life aims to provide protection and growth. But it's usually best to seek those separately, says Daily. Because premiums on permanent are high, you may be tempted to skimp on the death benefit. (A $1 million policy for a healthy 40-year-old woman can run as much as $13,900 a year; she could get a $1 million 20-year term policy for $750.)
Plus, the policies are often so opaque that it's hard to assess the investment potential. The alternative? Buy term and invest the rest. You'll have control over expenses -- and a shot at better returns.
3. But in rare cases, it's just the ticket
The cash that builds in such policies is not taxed until it's withdrawn (and you can avoid even those taxes by taking a "loan" against the account, which reduces the death benefit). That makes permanent insurance useful for high earners who max out other tax-deferred savings, says life insurance adviser Peter Katt of Mattawan, Mich.
Because it lasts a lifetime, a permanent policy may also make sense for older people who'll have illiquid estates -- like small-business owners -- but want to pass on money. The death benefit is often greater than what they'd be able to save.
4. The right flavor makes all the difference...
There are three main types of permanent insurance: traditional whole, universal, and variable. Whole has a fixed premium and guaranteed minimum growth. Universal allows you to raise or lower your premiums and resulting cash balance. And variable lets you choose how the cash is invested.
If you think you're a candidate for a permanent policy, find an independent expert to help you pick among these. Search "fee-only life insurance" online to find pros who charge hourly fees (around $300) and eschew commissions from insurers.
5. ... because dumping a policy will cost you
It can take a decade or so before a permanent policy's cash value -- what you'd get back if you gave up coverage -- catches up to the premiums you've paid. There may also be surrender charges in the early years.
Already have a policy with cash value built up? For $80, the Consumer Federation of America will review it to see if it's worth keeping (evaluatelifeinsurance.org). Know that if you cash out, you'll owe tax on the earnings portion, unless you transfer the money to another insurance product, says Daily.
The main purpose of life insurance is to protect your family's finances when you die. Permanent insurance does that for your entire lifetime, while also providing an investment component -- savings build within the policy, and you can tap or borrow against this "cash value."
In contrast, basic term insurance provides coverage for a set number of years for a much lower premium. At the end of the term, you typically get no cash back. But by then your kids will be grown and your house paid for, so the policy will have done its job, says insurance adviser Glenn Daily of New York.
2. It may not be your best investment
Permanent life aims to provide protection and growth. But it's usually best to seek those separately, says Daily. Because premiums on permanent are high, you may be tempted to skimp on the death benefit. (A $1 million policy for a healthy 40-year-old woman can run as much as $13,900 a year; she could get a $1 million 20-year term policy for $750.)
Plus, the policies are often so opaque that it's hard to assess the investment potential. The alternative? Buy term and invest the rest. You'll have control over expenses -- and a shot at better returns.
3. But in rare cases, it's just the ticket
The cash that builds in such policies is not taxed until it's withdrawn (and you can avoid even those taxes by taking a "loan" against the account, which reduces the death benefit). That makes permanent insurance useful for high earners who max out other tax-deferred savings, says life insurance adviser Peter Katt of Mattawan, Mich.
Because it lasts a lifetime, a permanent policy may also make sense for older people who'll have illiquid estates -- like small-business owners -- but want to pass on money. The death benefit is often greater than what they'd be able to save.
4. The right flavor makes all the difference...
There are three main types of permanent insurance: traditional whole, universal, and variable. Whole has a fixed premium and guaranteed minimum growth. Universal allows you to raise or lower your premiums and resulting cash balance. And variable lets you choose how the cash is invested.
If you think you're a candidate for a permanent policy, find an independent expert to help you pick among these. Search "fee-only life insurance" online to find pros who charge hourly fees (around $300) and eschew commissions from insurers.
5. ... because dumping a policy will cost you
It can take a decade or so before a permanent policy's cash value -- what you'd get back if you gave up coverage -- catches up to the premiums you've paid. There may also be surrender charges in the early years.
Already have a policy with cash value built up? For $80, the Consumer Federation of America will review it to see if it's worth keeping (evaluatelifeinsurance.org). Know that if you cash out, you'll owe tax on the earnings portion, unless you transfer the money to another insurance product, says Daily.
Wednesday, March 10, 2010
Citi offers alternative to foreclosure
CitiMortgage, one of the nation's largest mortgage servicers, launches a pilot program Friday designed to ease the pain of some homeowners heading for foreclosure.
Instead of borrowers falling further and further behind on their mortgages, leading to an eventual foreclosure sale, they can stay in their homes for up to six months, if they agree to then hand over the deed to the lender.
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The borrowers the program targets are already seriously delinquent, having missed at least three monthly payments, and are well on the road to losing their homes.
By giving the house back to the lender, in a transaction called a deed-in-lieu of foreclosure, the lender saves considerable expenses, especially on legal fees. Because of those savings, CitiMortgage, a division of Citigroup (C, Fortune 500), will grant quite generous terms to participants.
CitiMortgage CEO Sanjiv Das said he knows of no other big servicer with a program like it.
"This is a deed in lieu on steroids," he said.
The biggest advantage for borrowers is the time it gives them to plan their next moves. And while borrowers still lose their homes, the program promises to make the process more orderly and provides benefits for both lender and borrowers.
It includes a pledge from CitiMortgage that it will pay the borrowers a minimum of $1,000 to help with relocation expenses.
"The goal of the program is to help homeowners make a smooth transition into the next chapter of their lives," said Das. "Not every homeowner has the financial ability to remain in their home."
Citi will also provide relocation counseling and may even cover some monthly property expenses while the borrowers remain in their homes, if Citi determines the borrowers can't afford the expenses.
Foreclosures: How bad is your state?
Citi will also forgive any difference between the value of the home at time of repossession and what the borrower owes. Once the deed goes back to the lender, the borrowers walk away free and clear.
For their part under the new program, borrowers must agree to keep the homes in good condition and to meet with trained relocation professionals every couple of months to facilitate their final moves.
The program targets borrowers Citi believes would not benefit from mortgage modifications because they could not afford even sharply reduced mortgage payments. It also applies to borrowers who went through mortgage modifications but fell behind on their payments anyway.
It's ideally suited for borrowers considering walking away from their homes anyway or pursuing an ordinary deed in lieu, said Das.
To be eligible, homeowners must have their first mortgages with CitiMortgage, no second mortgage, actually live in the home and be seriously delinquent on mortgage payments, at least 90 days late.
The pilot program begins Friday and will be confined to six states: Texas, Florida, Illinois, Michigan, New Jersey and Ohio.
If it works in those states, CitiMortgage will open the program up to the rest of the country.
"By helping avoid the foreclosure process, which can be very stressful and distracting, and keeping people in their homes long enough to make an orderly transition to the next stage of their lives, we are also supporting neighborhood revitalization and stabilization efforts, which are crucial to the nation's economic recovery," said Das.
Instead of borrowers falling further and further behind on their mortgages, leading to an eventual foreclosure sale, they can stay in their homes for up to six months, if they agree to then hand over the deed to the lender.
Facebook Digg Twitter Buzz Up! Email Print Comment on this story
The borrowers the program targets are already seriously delinquent, having missed at least three monthly payments, and are well on the road to losing their homes.
By giving the house back to the lender, in a transaction called a deed-in-lieu of foreclosure, the lender saves considerable expenses, especially on legal fees. Because of those savings, CitiMortgage, a division of Citigroup (C, Fortune 500), will grant quite generous terms to participants.
CitiMortgage CEO Sanjiv Das said he knows of no other big servicer with a program like it.
"This is a deed in lieu on steroids," he said.
The biggest advantage for borrowers is the time it gives them to plan their next moves. And while borrowers still lose their homes, the program promises to make the process more orderly and provides benefits for both lender and borrowers.
It includes a pledge from CitiMortgage that it will pay the borrowers a minimum of $1,000 to help with relocation expenses.
"The goal of the program is to help homeowners make a smooth transition into the next chapter of their lives," said Das. "Not every homeowner has the financial ability to remain in their home."
Citi will also provide relocation counseling and may even cover some monthly property expenses while the borrowers remain in their homes, if Citi determines the borrowers can't afford the expenses.
Foreclosures: How bad is your state?
Citi will also forgive any difference between the value of the home at time of repossession and what the borrower owes. Once the deed goes back to the lender, the borrowers walk away free and clear.
For their part under the new program, borrowers must agree to keep the homes in good condition and to meet with trained relocation professionals every couple of months to facilitate their final moves.
The program targets borrowers Citi believes would not benefit from mortgage modifications because they could not afford even sharply reduced mortgage payments. It also applies to borrowers who went through mortgage modifications but fell behind on their payments anyway.
It's ideally suited for borrowers considering walking away from their homes anyway or pursuing an ordinary deed in lieu, said Das.
To be eligible, homeowners must have their first mortgages with CitiMortgage, no second mortgage, actually live in the home and be seriously delinquent on mortgage payments, at least 90 days late.
The pilot program begins Friday and will be confined to six states: Texas, Florida, Illinois, Michigan, New Jersey and Ohio.
If it works in those states, CitiMortgage will open the program up to the rest of the country.
"By helping avoid the foreclosure process, which can be very stressful and distracting, and keeping people in their homes long enough to make an orderly transition to the next stage of their lives, we are also supporting neighborhood revitalization and stabilization efforts, which are crucial to the nation's economic recovery," said Das.
Wednesday, January 13, 2010
Estate tax: Try again in 2010
NEW YORK (CNNMoney.com) -- Lawmakers will start 2010 with a hefty to-do list thanks to a lot of unfinished tax business they left on the table in 2009. The chief example: the estate tax.
Senate Democrats failed to reach a deal with Senate Republicans to temporarily extend the estate tax into 2010, when it is scheduled to be repealed for one year.
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$10K MMA 1.03%
6 month CD 0.97%
1 yr CD 1.42%
5 yr CD 2.66%
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Rates provided by Bankrate.com. But that doesn't necessarily mean there won't be any tax on inheritances in the year about to start.
Senate Finance Chairman Max Baucus, D-Mont., and House Ways and Means Chairman Charles Rangel, D-N.Y., have said they will try to get it reinstated for 2010 after the new year.
"We would clearly work to do this retroactively so when the law is changed, however it is changed, or if it is extended next year, it will have retroactive application," Baucus said on the Senate floor earlier in December.
Baucus and others were pushing to temporarily extend the estate tax in 2010, when lawmakers are expected to debate what permanent changes they wish to make to the tax.
The temporary extension would have kept the 2009 estate tax levels in place: the first $3.5 million of an estate would be exempt from the estate tax and the highest rate on the taxable portion of an estate would be 45%.
Those levels don't capture a large number of estates. Of the roughly 2.5 million Americans expected to die in 2009, only 5,500 -- or 0.25% -- will have estates large enough to be taxable, the Tax Policy Center estimates.
Headache ahead
Imposing a tax retroactively can create administrative and planning headaches for accountants, lawyers and heirs of estates. And it is almost a guarantee that the IRS will get an earful from heirs of large estates arguing that they don't owe the estate tax, if a decedent died during the months when the repeal was in place.
"If it's my client, I'm challenging that baby," said Chuck Schultz, director of private wealth and tax advisory services at RSM McGladrey. "It's going to be a real mess to have a two-month repeal."
But, Schulz said, practically speaking, the counterpoint to such challenges is the fact that even if the repeal is in effect through February or March, executors still have nine months from the date of death to file the federal estate tax return, and they have the choice of valuing the estate either at the date of death or six months from the date of death.
So that window of time is arguably sufficient to allow an executor to plan for a reinstated estate tax.
If repeal sticks
Given that there are not 60 votes yet in the Senate to support a temporary extension of the estate tax, it's not clear whether there will be a sufficient number of votes next year either.
If the attempt to make the tax retroactive fails and the repeal stands, that still doesn't mean there won't be any tax consequences for those who inherit assets.
That's because along with the repeal of the estate tax, the so-called "step-up" in basis for heirs of any estate, no matter how large or small, would be limited to the first $1.3 million in assets -- plus up to an additional $3 million for a beneficiary who is the surviving spouse of the deceased.
The step-up simply means that when heirs sell an inherited asset, they only owe capital gains tax on the asset's appreciation from the day the asset was inherited to the date of sale rather than from the day the asset was originally purchased by the decedent.
Say a parent buys stock at $20 a share, dies and leaves it to his son when the stock is trading at $60 a share. If the son later sells the stock at $80, he only owes capital gains tax on the $20 gain ($80-$60), rather than the full $60 gain that his parent would have owed.
Under estate tax repeal, however, the son could owe capital gains tax on the full $60 gain assuming the assets in his father's estate exceed the $1.3 million threshold.
So any heirs of estates that fall between $1.3 million and $3.5 million next year will pay more in capital gains tax than if there were an estate tax in place, said Roberton Williams, a senior fellow at the non-partisan Tax Policy Center.
Senate Democrats failed to reach a deal with Senate Republicans to temporarily extend the estate tax into 2010, when it is scheduled to be repealed for one year.
Facebook Digg Twitter Buzz Up! Email Print Comment on this story
CDs & Money Market
MMA 0.94%
$10K MMA 1.03%
6 month CD 0.97%
1 yr CD 1.42%
5 yr CD 2.66%
Find personalized rates:
Rates provided by Bankrate.com. But that doesn't necessarily mean there won't be any tax on inheritances in the year about to start.
Senate Finance Chairman Max Baucus, D-Mont., and House Ways and Means Chairman Charles Rangel, D-N.Y., have said they will try to get it reinstated for 2010 after the new year.
"We would clearly work to do this retroactively so when the law is changed, however it is changed, or if it is extended next year, it will have retroactive application," Baucus said on the Senate floor earlier in December.
Baucus and others were pushing to temporarily extend the estate tax in 2010, when lawmakers are expected to debate what permanent changes they wish to make to the tax.
The temporary extension would have kept the 2009 estate tax levels in place: the first $3.5 million of an estate would be exempt from the estate tax and the highest rate on the taxable portion of an estate would be 45%.
Those levels don't capture a large number of estates. Of the roughly 2.5 million Americans expected to die in 2009, only 5,500 -- or 0.25% -- will have estates large enough to be taxable, the Tax Policy Center estimates.
Headache ahead
Imposing a tax retroactively can create administrative and planning headaches for accountants, lawyers and heirs of estates. And it is almost a guarantee that the IRS will get an earful from heirs of large estates arguing that they don't owe the estate tax, if a decedent died during the months when the repeal was in place.
"If it's my client, I'm challenging that baby," said Chuck Schultz, director of private wealth and tax advisory services at RSM McGladrey. "It's going to be a real mess to have a two-month repeal."
But, Schulz said, practically speaking, the counterpoint to such challenges is the fact that even if the repeal is in effect through February or March, executors still have nine months from the date of death to file the federal estate tax return, and they have the choice of valuing the estate either at the date of death or six months from the date of death.
So that window of time is arguably sufficient to allow an executor to plan for a reinstated estate tax.
If repeal sticks
Given that there are not 60 votes yet in the Senate to support a temporary extension of the estate tax, it's not clear whether there will be a sufficient number of votes next year either.
If the attempt to make the tax retroactive fails and the repeal stands, that still doesn't mean there won't be any tax consequences for those who inherit assets.
That's because along with the repeal of the estate tax, the so-called "step-up" in basis for heirs of any estate, no matter how large or small, would be limited to the first $1.3 million in assets -- plus up to an additional $3 million for a beneficiary who is the surviving spouse of the deceased.
The step-up simply means that when heirs sell an inherited asset, they only owe capital gains tax on the asset's appreciation from the day the asset was inherited to the date of sale rather than from the day the asset was originally purchased by the decedent.
Say a parent buys stock at $20 a share, dies and leaves it to his son when the stock is trading at $60 a share. If the son later sells the stock at $80, he only owes capital gains tax on the $20 gain ($80-$60), rather than the full $60 gain that his parent would have owed.
Under estate tax repeal, however, the son could owe capital gains tax on the full $60 gain assuming the assets in his father's estate exceed the $1.3 million threshold.
So any heirs of estates that fall between $1.3 million and $3.5 million next year will pay more in capital gains tax than if there were an estate tax in place, said Roberton Williams, a senior fellow at the non-partisan Tax Policy Center.
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