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Q&A.

QI have my own business and to save tax I would like to pay my wife some of the profit. What is the best way to do this? AFirstly I recommend that you talk to a qualified accountant but, in a nutshell, there are two ways of achieving what you want. If your wife is helping you in the business, then you could pay her a salary which could be up to the level that National Insurance starts to be paid by you as an employer.

The other option is to pass her ownership of shares in your business and to pay her a dividend. It is important that the shares should have full rights and it would also be best if the dividends were paid into her own account and not a joint account with you. This would prevent any implication that she was only holding them on your behalf.

QI am constantly reading and hearing about RPI and CPI as measures of inflation, but what are the differences? AWith Retail Price Indexation housing costs such as mortgage interest payments and council tax are included. Consumer Price Indexation excludes these, but includes such things as charges for financial services.

RPI also does not take into account spending of the top few percent and the bottom few percent of the population whereas CPI covers a broader population.

Also the formula used is different and this becomes very technical. As a general rule CPI runs at a slightly lower level than RPI.

QMy bank has offered me a guaranteed stock market bond where I cannot lose my money. Are these things worth investing in? AIf something appears too good to be true it generally is. You need to be careful with these as they have a history of going horribly wrong. The questions you need to ask are: Which stock market index is it linked to? How is it taxed? What are the charges? How exactly does it work? Is the capital fully protected? Where is it invested? How safe is the company holding the investment? Are dividends reinvested? Unless you are completely satisfied with all the answers, do not invest. To request a free Investor''s Guide and with 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.
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Publication:The Journal (Newcastle, England)
Date:Dec 4, 2010
Words:422
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