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Family Finance: Question of Cash.

Byline: WITH TONY HETHERINGTON

IN 2002 I bought a TV set and a warranty from Powerhouse. The warranty cost pounds 259 and provided repair cover plus my cash back if I made no claim by2007. Last year I heard Powerhouse was in difficulties. I tried to find out who to claim from when the cashback fell due, but received no reply R K M, Knotty Ash

ELECTRICAL retailer Powerhouse collapsed in 2003, and although parts of the company were taken over, the offshoot that issued the cashback warranties was beyond repair.

Over 250,000 people had bought goods on the same terms as you - make no claim and after five years you would get your cash back. But when Powerhouse went bust, the money simply wasn't there to meet claims. The accountants who manage the remains of the warranty business have just told 75,000 people who have claimed that they can have 15% of their money, and perhaps a bit more in 2007 after it becomes clear how many claims there are in all.

At present, you have no claim, of course. But when you do need to make contact, write to Powerhouse, The Macdonald Partnership, Tower 42, 25 Old Broad Street, London EC2N 1HQI AM about to receive a legacy of pounds 1,000. Will I pay income tax on this? I am a pensioner and a taxpayer.

H O C, Ynys MOn

THERE is no income tax on bequests, and you need not declare anything on your tax return. It is possible that inheritance tax is due, but this is paid from the estate by the executors. It is not your responsibility, so all you need do is bank the pounds 1,000 cheque when it arrives

I PURCHASED shares in Tower PLC, a new issue on the Alternative Investment Market (Aim). I now understand trading in the shares has been suspended as the company is in a reverse takeover deal. Can I have your observations, please, as my information is a couple of months oldN H, Colwyn Bay TOWER is very new and very small, and the shares are speculative. They have bounced between about 3p and 8p in their short life. Last December, Tower lent pounds 1m to a foreign mobile phone company called Maskina.

As part of the deal, Tower was granted an option to buy Maskina in return for a large number of its own shares. This would give the original owners of Maskina a stake in the merged companies. On February 25, Tower announced that it had decided to exercise this option, subject to finding no nasty surprises. Tower is now putting Maskina under the microscope before asking shareholders to vote on the deal.

Meanwhile, since it is near impossible to say what Tower is worth, share trading is suspended.

Tower (07767 420160) is unlikely to say more until its enquiries are complete, but shareholders can always ask company boss Vince Nicholls for an update

A FINANCIAL programme mentioned a new tax on people who transfer their home to their children to avoid inheritance tax when they die. I missed the details though, and I cannot recall reading anything about this. Do you know about it, please Mrs G J, Llandudno

THIS was a time-bomb from Chancellor Gordon Brown.

Briefly, if you give away anything valuable to your heirs, but carry on using it yourself, then the Revenue will tax you annually on 5% of the value of the assets concerned. The good news is the tax man will ignore anything with an annual value under pounds 5,000. If there is a chance you are affected, do see an accountant or tax lawyer. I AM paying about 18% interest on my credit card, yet my bank is offering personal loans at half this rate.

Why shouldn't I borrow pounds 5,000 to pay off my card debts, and cut my interest payments at the same time? Is it really this easy

J H, Crosby ASSUMING your bank reckons you are a good risk, yes it is this easy. Northern Rock (0845 608 0405offers loans at 5.7% interest, so you could cut your charges by two-thirds instead of a half
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Title Annotation:Features
Publication:Daily Post (Liverpool, England)
Date:May 2, 2005
Words:699
Previous Article:Family Finance: SHARE TIPS FROM THE SUNDAY NEWSPAPERS.
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