CW writes: My wife has just found a passbook for the Magnet & Planet
building society belonging to her elderly mother, which records a balance of
£10,000 on December 16, 1977. My mother-in-law has no recollection of this
society and merely observes “it probably went bust”. Is there any way of
finding out who took over this unlikely named institution?
Yes, it’s easy when you know how. The Building Societies Association
(bsa.org.uk or 020 7437 0655) can track down all former societies. In M&P’s
case, it was taken over by Town & Country building society in October
1977, which was absorbed in 1992 by Woolwich – and that, in turn, has since
been taken over by Barclays, to whom you should now write, enclosing a copy
of the passbook.
However, the fact this passbook still exists does not necessarily indicate
that the funds are still there. Societies routinely transferred funds to
different accounts without insisting that old passbooks were returned. But
your mother-in-law would have to be elderly indeed to be affected by a
society going bust – the last one that did so was the Liberator, in 1892.
Pensioner was mis-sold bond
TO writes: Recently my 87-year-old sister-in-law asked me to look into her
financial affairs, because she felt that she was getting rather a poor
return on her investment with Legal & General. She invested £10,000 in a
with-profits bond with the company in 1999, on the advice of Bradford &
Bingley. She signed an agreement but did not have any idea about financial
matters. She is a nontaxpayer and is on pension credit. I cannot believe
this was a sensible investment for someone who was 79 at the time the policy
was taken out.
Me neither. It transpires this £10,000 was precisely half of all the money she
had in the world. The rest was kept in a savings account for work on her
house, and most of that has now been spent.
Back in 1999, advisers were steering all sorts of people into with-profits
bonds. They were not unsuitable for everyone, but if ever there was an
instance where such an investment was inappropriate, it must be your
sister-in-law’s case. Whether it was stupidity or cupidity on the part of
the adviser I have no means of knowing, but in any event B&B has agreed
her bond was mis-sold.
Its calculation of redress takes into account the income that she has
withdrawn from the bond over the years, totalling £3,546, and compares what
she would have received had she kept the money in a savings account, with
her current situation.
The end result is that the firm is offering her £1,408 in compensation, and
she can decide whether to keep the bond, or to surrender it. The current
surrender value is £9,669.
Driven to despair by old debts
SJ writes: A few years ago I found myself heavily in debt. I borrowed money
from credit cards to repay loans, then realised I was approaching a total I
could never hope to repay. In the nick of time I contacted the National
Debtline and organised a debt-management plan with Pay Plan. All our spare
cash goes into debt repayment.
Three weeks ago I had a letter regarding a Barclaycard account I have no
record of, and have since been phoned every day about it. The bank has also
just told me about two other accounts which – to my despair – are apparently
still open and outstanding. I thought these last two had been paid off some
time ago. I don’t want to evade liability but the daily phone calls are
making me ill.
Barclaycard has now investigated. Two accounts were indeed settled in 2006.
Technically, both remain on Barclays’ database, but the bank states it is
“not pursuing the remainder of the balances and the accounts have been
closed”.
As regards the third account, the number of this was changed in March last
year, which resulted in your not receiving any more statements. It is,
however, still receiving the agreed monthly payments from Pay Plan towards
the settlement of this debt. It is sending you the backlog of statements on
this account, wiping off late-payment charges of £24, and has arranged for a
credit of £277.75 to be made to this account. This brings the outstanding
balance down to £1,300, and Barclaycard says it is now prepared to accept
£975 from you in full and final settlement of this account.
Your story illustrates how important it is to get a grip on managing debts,
and also how contacting the National Debtline (0808 808 4000) and an
organisation such as Pay Plan (0800 917 7823), can offer genuine help to
those in a similar position.
I hope others will take note, and take heart, from your experience.
Taxman muscles in on gift of house
PS writes: My wife and I own a second property, which is our daughter and
grandson’s home. Eventually we want to sign the house over to her, as a
gift. My tax office has told me that we will be charged capital-gains tax
(CGT) on the difference between what we paid for it and its current value,
minus any tax allowances. Therefore the day we hand the house over to our
daughter, we will make her homeless because it would have to be sold to pay
the CGT. Is there anything that you could suggest to save their home?
Many people are under the impression that CGT is only payable when an asset is
sold, but as you have learnt, that’s not true. It is also payable on all
gifts, the only exceptions being gifts between husband and wife, and to
charity.
Leonie Kerswill of the accountants Price Waterhouse Coopers says that if the
owner is willing to gift the property in question into a trust, this may
mean inheritance tax is charged at that point but it then allows the CGT to
be postponed. Using this route does need to be thought about carefully. Bear
in mind that the property is in a trust and the CGT held over will typically
fall due when the property is sold or when it is subsequently taken out of
the trust.
Another possibility would be to gift the house over a number of years to take
advantage of multiple CGT exemptions, or simply to wait, and leave the
property in your will.
There is no CGT on death, but of course inheritance tax then comes into play.
All in all, I think you should get some professional advice, and think matters
through carefully, bearing in mind that there is a nasty worst-case scenario
where someone gives away an asset, incurs a CGT charge and then dies within
a relatively short period, so that the asset is hit by inheritance tax as
well.
E-mail Diana Wright at the address below (no attachments please) or write
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