18th December 2020
Investors would do well to bear in mind these words from Gilbert & Sullivan’s HMS Pinafore, since things are seldom what they seem in financial markets. Ian Gunn considers a couple of examples, past and present.
No. This is partly because only you can control how much you spend, but also because the future is uncertain. All sorts of factors could change for the better or the worse, and therefore we keep your finances under regular review and advise you whether your spending is likely to be sustainable, or not.
No. You can keep means-tested benefits by ensuring your award is held in a suitable trust, which can also protect local authority funding for care. This is a vital part of making sure your needs are met from all possible sources, not just your award, which gives you a better chance it will last for your lifetime.
Yes. Many clients find it too intrusive to have paid carers in the house, or too difficult to recruit and keep people they can rely on. Family carers are therefore commonplace. Some accept nothing for the care they provide, and some accept a nominal payment, which is tax-free in certain circumstances. Either way, this can really improve the chance of the award lasting for your lifetime. You can have more peace of mind if you insure family carers. Please note that if you are under the Court of Protection, court approval for payments to family members is required.
Holding funds within a personal injury trust adds no additional risk compared with holding those same assets or accounts in your own name. The accounts or investments are held by you, assuming that you have appointed yourself as one of the trustees, and you are the sole beneficiary of the trust fund.
This is correct. Personal injury damages can be disregarded for a period of 52 weeks from the date awarded. However this is not without complication. Firstly, it is necessary for you to claim the 52 week disregard and it is advisable that this is done in writing to fulfil your obligation to notifying of your change in financial circumstances. Furthermore, the 52 week clock starts ticking from the date of the first payment of any made in consequence of the injury. Therefore previous interim payments, insurance payments or even charitable payments made to you as a consequence of your injury will all start the clock. It is therefore possible that this disregard period will have expired prior to receiving any payment from your personal injury claim.
Even if the disregard period is available to you care must be taken. At the end of the disregard period you may be asked to account for how your funds have been used. In the event that your benefits agency considers your expenditure to be extravagant or purposeful to rid yourself of funds to create, maintain or increase any entitlement to you may be caught under the 'deprivation of capital' rules and treated as retaining funds you have spent. This would have the double edged result of reducing your benefit income at a time that you no longer have the capital to support yourself.
If you are in receipt of means tested support at the time of establishing the personal injury trust, with your authority, we will write to your benefits agency fulfilling your legal obligation to disclose your change of financial circumstances. In doing so we will request that the benefits agency confirm for our records that the Trust is to be disregarded in relation to any financial assessment. Should your circumstances change in future and the need arise to further disclose your financial circumstances we will be on hand to advise you on how best to complete the disclosure
Cash deposits will be fully protected, either under the deposit guarantee scheme or by HM Treasury in National Savings & Investments. We are directly regulated and authorised by the Financial Conduct Authority, and the financial products we recommend are covered under the Financial Services Compensation Scheme. However, this does not cover the normal ups and downs in the value of long-term investments. We also hold professional indemnity insurance in respect of our advice.
Their value is likely to go up and down over short periods of time and once a year is probably enough. There is evidence that the more often you look, the less willing you will be to take on risk, not least because you will see more of the ‘downs’, which may harm your wealth in the long run.
We will be completely open with you about our fees, which will be discussed and agreed with you before carrying out any work, together with the costs of managing and administering your investments.
Probably not. Most often we will advise you to do it gradually, to avoid the risk of a sudden fall in the markets.
There is no special tax status for personal injury awards except periodical payments, which are tax-free income. Depending on your circumstances, you are likely to have personal allowances that allow you to have set amounts of tax-free income and capital gains each year. You may also be eligible to shelter some of your investments from tax by using your ISA allowance each year.
Providing the property is to be your main residence, its value will be disregarded in relation to any means tested state benefits received. However, should you require residential care later in life the property may no longer be ignored in relation to your ability to pay for your care. Whilst for many, the risk of requiring residential care may be many years away, holding the property, which is often their largest single asset, within the trust will protect its value from assessment and secure the option of handing the property down to the next generation or the option of selling and accessing the equity rather than handing it to the Local Authority.
This will depend on your plans or objectives. If your award of compensation is modest and will be spent in the short-term it is unlikely that a trust will provide you with any benefit although you may wish to discuss your circumstances in order to ensure you make a fully informed decision. However, should you intend to keep your award to meet needs over the medium to long-term it is advisable that it is protected from financial assessment should your circumstances changes. A future need to claim means tested support may be due to an unrelated occurrence such as ill-health or redundancy. A personal injury trust will protect your right to claim the benefits to which you are entitled.
Providing the expenditure you intend to make is acceptable to your benefit agency you may not need to establish a trust. In the event that your benefits agency considers your expenditure to be extravagant or purposeful to rid yourself of funds to create, maintain or increase any entitlement you may be caught under the 'deprivation of capital' rules and treated as retaining funds you have spent. If you are in any doubt as to how your expenditure may be assessed you should seek advice either from an adviser or direct from your benefits agency. Alternatively, by placing your award under the protection of a personal injury trust you will be able to choose how to spend your funds however you wish.
Should you need to change your co-trustee for any reason you are able to do so. This could be desirable for a number of reasons such as a relocation, separation/divorce or simply due to having someone closer in your life that it is appropriate to share this responsibility with. There will however be a small administration fee and therefore it is advisable to appoint those who you feel will be able to serve your best interests for an extended period.
Yes, but only if you receive those funds as a result of your injury. This could be in respect of an insurance payout, charitable collection or a voluntary payment from a family member to support you. It is not allowable to place other personal savings or assets which are not connected with your injury into the trust and have these disregarded from financial assessment.
You may do so. However, the trust is drafted with the intention of enabling you to meet any objective you may have. Therefore, it is usually possible to meet your objectives whilst retaining the protection of the trust and consequently it is unusual for beneficiaries to decide to shut down their trust prematurely. If you feel it necessary to close your trust in order to fulfil your objectives we would recommend that you discuss the issue of concern with us as there is usually a simple solution available.
Obviously, that is not the aim, but it happens as part of the normal functioning of markets. A fall in value is not the same as a loss, just as a change in the value of your house is neither a loss nor a profit until you actually sell it. Everyone feels the pain of losses more than the pleasure of gains, and part of our role is to help guide you through the tough times as well as the good ones.
Yes. You may invest in any way you would have invested personally outside of a trust arrangement with few exceptions. Consequently you should be able to benefit from the same or similar level of returns available outside of the trust. The return achieved would belong to your trust and simply increase the capital held within the trust and continue to be disregarded in relation to any entitlement to means tested state benefits.
On death your trust effectively dissolves and the assets contained within are treated as if they were simply held by you personally. They therefore form part of your estate and get passed in accordance with your Will or the intestacy rules if no Will is in place. It is advisable that you consider establishing a Will that reflects your wishes to ensure that your loved ones receive your estate in the way you wish, particularly if you are not married and wish your partner to benefit from your estate or the intestacy rules do not reflect your wishes.
There are no ongoing costs or charges in relation to administering the trust unless you decide to appoint a professional trustee to handle your affairs.
No. We choose not to hold client money, and are not authorised to do so. All deposits and investments are held directly with the institutions we recommend.
We offer general advice and guidance on personal injury trusts without fee or obligation. We would welcome the opportunity of answering any questions or concerns you may have in relation to personal injury trusts and the protection of means tested benefits. Should you wish to discuss your circumstances and whether a personal injury trust is right for you, please do not hesitate to contact us on 01270 759786.
Richard Cropper and Ian Gunn are both fully qualified authorised independent financial advisers, and both have degrees with economics as the major subject.
Both Richard Cropper and Ian Gunn have acted as expert witnesses since the early 1990’s.
Yes, Richard Cropper and Ian Gunn have both given evidence in court.
Yes, notably in the fields of indexation and security of periodical payments.
No, most of the time we are providing independent financial advice to our clients.
Yes, Richard Cropper and Ian Gunn are Tier 1 APIL accredited expert witnesses.
Yes, but we are predominantly instructed by solicitors acting for the claimant, since our area of expertise is primarily of relevance to claimants.
Primarily 'form of award' in personal injury and clinical negligence cases. Richard Cropper and Ian Gunn were also members of the panel of experts advising the Ministry of Justice on the review of the discount rate in personal injury claims.
Yes, including the Channel Islands, the Isle of Man, the USA, France, Italy, Brazil, Australia, Poland and Latvia.
Finding the right person to make your investment decisions, was important for my peace of mind. For me, it was more than the performance of the funds, but trusting the person that was pulling the strings. At PFP I felt that I had a team, all working together in order to meet my expectations. From the first phone call I made, to my last meeting. I had complete confidence in their ability to advise me, on how best to manage my portfolio.
Following an accident in November 2007 I was introduced to Ian Rowe from PFP approximately 6 months later. Since then PFP have been able to offer first-class advice on how to set up a personal injury trust, and then manage it over the coming years.
The advice has always been easy to understand, logical and entirely appropriate to levels of risk etc. Investments have been presented in a clear and concise manner, review documentation easy to understand and digest, and any changes necessary provided in a timely fashion.
I would have no hesitation in recommending the services of PFP to anyone if they are faced with a situation similar to mine.
Ian Gunn and his team at PFP have been looking after our daughter's investments since 2006. In that time, the services provided to us have been excellent. We have received a comprehensive, professional and honest service with a helpful, personal, friendly touch.
There would be no hesitation, from us, in recommending PFP to anyone who is looking for expert advice and guidance, who are in the same situation as us.
When our son age 9 was involved in an RTA in August 2001, he was awarded compensation for injuries sustained. We knew this money was required long term and had to work for him. We were introduced to PFP and Richard Cropper by our Solicitor and what a great recommendation it was. Richard has worked tirelessly for our son and his fund has grown, which has enabled him to be independent.
We are always kept up to date on the progress and changes if required and an annual review where Richard comes to us. All the staff at PFP are very knowledgeable and sensitive in all areas and we would have no reservation in recommending Richard and the rest of the company. They feel like an extension of our family.
Since my daughter was awarded a Personal Injury Payment over ten years ago, Richard Cropper and his team at PFP have helped and guided us to ensure her assets are wisely invested to ensure the money she will need to pay for the care she will require for the rest of her life is safeguarded. In spite of the vicissitudes and uncertainties of the times we live in - and a hitherto unknown instability of the financial sector, Richard has done a magnificent job.
I feel, after over a decade of sure advice, that our choice of adviser could not have been better and hope our working relationship continues for many years to come. I would not hesitate to recommend Richard (and his team) to anyone who is searching for a financial adviser with an extensive knowledge of personal injury, the future needs of that individual and whose integrity and honesty is without question. He is also - (and this is terribly important to anyone who is struggling with the complexities of the financial markets and the driving need to care for their loved one) - very approachable and friendly. He makes my life better and eases my worries with kindness and compassion - without making me feel I am asking daft questions (and I ask quite a lot ...).
For the last fifteen years PFP have been advising us as trustees about our son's medical negligence award. Not only this, but they have also assisted us greatly on any benefits and allowances that our son can claim. Without exception we have always been treated with the best possible care.
I specialise in Court of Protection and Personal Injury Trust matters. I act as a Financial Deputy and Trustee in numerous matters. Most of them involve very substantial investments. I have dealt with PFP on various cases over the years, and continue to do so. My main contacts are Ian Gunn and Richard Cropper (as well as Joanne Moores for Welfare Benefits Advice).
I have always been very pleased with the services provided by PFP. Based upon my experience of dealing with them, I have always found PFP to be very professional and helpful in their approach and service
Many of our clients with significant compensation awards have used Personal Financial Planning to advise about and manage their investments. We have found Richard Cropper and his staff to be totally professional and extremely knowledgeable. Richard always deals with clients and their families in a kind, supportive and accessible way. Richard is our “go to” financial adviser for clients with large awards.
Ian Rowe and PFP are our go to trusted experts for financial advice for our clients. The client care is excellent, Ian and Richard make the complicated seem simple.
I have instructed Richard Cropper and PFP for many years on behalf of my Court of Protection clients. I have to say the service provided is second to none. Their dedication and expertise in investment of personal injury awards sets them apart from other IFAs they truly are unique.
The investment process is explained in detail to each and every client/parent in a simple and understandable way which is personal to them. The benefits advice service is outstanding. I would have no hesitation in recommending PFP.
Whilst acting as professional deputy and trustee to many brain injured clients, I having dealings with PFP on an almost daily basis. I cannot praise Richard Cropper and James Rooney highly enough for the advice they provide in their detailed yet easy to understand reports. The manner in which they interact with my clients is second to none, always speaking in plain English and putting the clients at ease in sometimes difficult circumstances. The support staff I deal with are very efficient and always happy to help.
Over many years, Ian Rowe has provided prompt and timely advice to many of my Clients, often in cases where it has been appropriate to set up a Personal Injury Trust. He has frequently taken the time to visit my Clients at their homes, at whatever time has been convenient to the Client, with a view to providing detailed but clear independent advice to enable the Clients to make a decision as to how best to proceed.
In the past, some of my Clients have commented upon Ian’s pleasant and pragmatic manner and others have commented upon his willingness to go the extra mile, as and when any issues have arisen that required his early intervention.
For many of our catastrophically injured Clients, Richard Cropper of PFP provides us with extremely comprehensive Viability Reports, which are of enormous assistance when Clients are seeking advice in relation to the most appropriate form of award e.g. whether a lump sum basis and/or periodical payments. His professional input is often invaluable, particularly in the run up to Joint Settlement Meetings or Trials.
I have worked with Joanne Moores of PFP for several years now. Joanne’s advice in welfare benefits matters has been invaluable to me in my capacity as Deputy appointed by the Court of Protection to manage the financial affairs of various clients who are deemed not to have capacity.
Joanne’s knowledge on all matters related to benefits and the Department of Works and Pensions is very comprehensive and wide ranging. I have found her to be extremely approachable, very thorough in the advice that she gives and she always offers sensible and practical advice. Her depth of knowledge in her field is invaluable for those who are advising clients on all matters relating to personal injury trusts and deputyships. I will have no hesitation now or in the future in recommending Joanne to my colleagues for professional advice and assistance.
Richard is ace!
I have been with PFP for 10 years and their advice and knowledge has been invaluable.
They regularly provide updates and have always been available to answer any queries or to explain options within my portfolio. As I find it difficult to travel Mr Cropper comes to visit me at home on a yearly basis. I would recommend PFP to anyone in need of help with their financial planning.
We have known Ian Rowe for nine years, he has always dealt with us with care and attention. Ian is always very professional. He is always one step ahead regarding our investments and his forecast is spot on. Ian is very good at listening to our needs for this year and for the long term. He makes great decisions regarding our investments.
Personal Financial Planning has provided financial support and understanding over the past few years for my husband’s injury trust. They have at all times provided a comprehensive and holistic approach to his needs, been mindful of his limitations, and worked within his capabilities of understanding. The whole team at PFP are always friendly, helpful and knowledgeable, and provide a service that is accessible and supportive. Ian in particular has always taken time and shown patience in making sure we both fully understand exactly the financial aspects and implications of any advice being given, whilst making sure any recommendation is relevant, clear and concise. I would highly recommend the financial service they provide.
Investors would do well to bear in mind these words from Gilbert & Sullivan’s HMS Pinafore, since things are seldom what they seem in financial markets. Ian Gunn considers a couple of examples, past and present.
Richard Cropper confirms that the feared post-Brexit risks have gone away.
Richard Cropper notes the positive impact of the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2020
Ian Gunn takes another look at proposals for the reform of capital gains tax.
Richard Cropper understands that the Defendant in Swift will not be seeking permission to appeal to the Supreme Court
Richard Cropper provides an update in respect of the 'reasonable security' of periodical payments provided by Gibraltar-based insurers.
Attached is the Court of Appeal decision on costs and the further appeal.