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Your money queries are answered by Peter Rutherford, senior director of Rutherford Wilkinson, Chartered Financial Planners QI understand if I have an income of pounds 20,000 per annum I can elect for flexible drawdown on my pension fund. Is this correct? A This is correct; however, there are certain requirements. The only income that will be taken into account is State pension income, pension annuity income or occupational pension income from a final salary scheme.

Other earnings such as salary, whether it be full time or part time, rental or investment income or even a purchased life annuity will be ignored. Further, you need to be in receipt of the pounds 20,000 in that tax year to be able to qualify.

For example, if your qualifying pension income started in, say, October at the rate of pounds 20,000 per annum you would only receive pounds 10,000 in that financial year. Consequently you would have to wait until the new financial year before electing for flexible drawdown.

Q My parents are now dead with my mother being the last to go. Under her will I have received a small amount of money even though she was quite wealthy. Unfortunately we have not got on for years but I do feel I should get more rather than the little she has left me. Is there anything I can do? A You need to talk to a solicitor about this but I am aware that there has been a recent case which is very similar where the daughter made a claim when she was due to receive nothing and the bulk of the estate was to go to charities.

It has gone to the Court of Appeal who found that an earlier decision allowing the will to be adjusted to make a payment to the daughter should stand.

The case is called Ilott v Mitson and Others but I would say that just because this particular case has succeeded it may not mean that you will yourself.

QI have heard that investing in ground rents can be very profitable. Is this possible and what are the pros and cons? A There are a handful of investment funds that invest in ground rents and they have been around for a few years and have generally done quite well. It is also feasible to purchase ground rents directly, typically from a builder.

Effectively you become freeholder and the leaseholder pays you a small rent for a long lease. There is a potential for this income to be indexed as they are often linked to Retail Price Index or similar. The disadvantages are that there is quite a bit of work involved in sending out a huge number of invoices and therefore management costs are relatively high.

There is also the risk that legislation may change giving the leaseholders greater protection and putting further responsibilities on landlords. Leaseholders already have the right to acquire the freehold when there is less than 80 years remaining on the lease. However, this would give some capital return to the investor. As with any investment you must take suitably qualified independent advice and I would always recommend you have a properly diversified portfolio which is appropriate to your needs and your ability to bear risk.

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

Telephone 0191 217 3340 or email Rutherford Wilkinson Ltd is authorised and regulated by the Financial Services Authority.
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Title Annotation:Features
Publication:The Journal (Newcastle, England)
Date:May 7, 2011
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