Individual Private Sector Banks

Bank stocks had moved up last week in anticipation of big-ticket reforms in the banking sector. However, the move came about as a damp squib as it was just an enabling provision to help banks raise more equity from the market. The proposal to bring down the government stake down to 33 per cent would essentially come through banks increasing their equity or through a reduction of capital.

As no one can hold more than 1 per cent of the equity, it would ensure that no strategic partner comes in nor a change in management would be possible. As the public sector character of the banks would be retained together with parliamentary supervision, it does little to change the management style either.

The move to grant greater autonomy to bank boards would as a result come as a cropper. The government has also retained the right to appoint the chairmen and directors on the boards of the bank, thus doing little to induct in more professionalism and entrepreneurship. The ability to restructure cost base and issues of independence of management would still remain. Key long-term issues including legal reform to address asset recovery and universal banking remain unaddressed too.

The lack of reform has impeded meaningful reduction in non-performing assets. The credit growth is likely to slow down in the coming months on the back of slower industrial growth. The interest rate environment is also expected to be fluid, which will put pressures on the spread. Technology has widened the gap between pro-active banks and others.

Most public sector banks have been unable to respond to the opportunities created by technological change. As most of the PSU banks having controlled market share till now are facing capital and management constraints, pro active private banks have managed to gain share and grow rapidly. While bank stocks, particularly those in the PSU sector are currently available at attractive valuations, there aren’t significant upsides to the performance at these levels.

While we are not bearish on the sector, a lot would depend on the portfolio churning by institutional investors. With the information technology sector going out of favour for fresh money buys, a defensive sector like banking could be looked up to by investors. In that event, if portfolio churning does take place, the sector may find favour.

There aren’t any indications of that happening now. Individual private sector banks with a technology edge are expected to continue to generate investment interest.

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Get a Quote For Auto Insurance

There are literally hundreds of places for you to receive a quote for auto insurance in Missouri. So, how do you know which company to choose or which policy to select? It’s not easy, but if you follow the simple advice provided in this article you will find yourself on the right path.

The mistake that most people make when searching for an auto insurance quote is a lack of understanding. Like any other consumer product you must fully understand what you are purchasing, and why you are purchasing. Do you still have the same insurance coverage you had from 10 years ago? If so, it’s likely that you are either under covered or paying too much for your insurance. You should contact multiple insurance agents at least once per year to ensure you are getting the best rate.

Along with a lack of understanding, many people make the mistake of only getting their auto insurance in Missouri from two or three companies. You should always get a quote from as many companies as possible so that you have a wide variety of options to choose from. One great way to alleviate your concerns is by discussing your insurance rates with an independent broker, as opposed to a captive agent. While a captive agent can provide you with rates from only one company, a broker can submit your information to multiple companies. You receive the benefit of shopping multiple companies without wasting time.

If you’re having difficulty locating insurance companies to contact you can use the internet to your advantage. Simply perform a search such as ” auto insurance in Missouri ” or “auto insurance quotes in Missouri” and you will see dozens of companies willing to provide you with a insurance comparison. If you are not familiar with internet search you can use your local pages to search under “insurance companies” or “insurance brokers”. However, if you’ve not yet mastered the art of internet research, I highly suggest you learn. There are numerous auto insurance companies who only sell their products via the internet.

The most important thing to remember when asking for an insurance quote is that your current coverage is not necessarily the best, and you should always talk to your agent about whether your current coverage is appropriate. Once you’ve determined the correct amount of coverage, only then may you truly get a productive insurance comparison. After all, what good is “cheap” insurance if you have to pay out of your own pocket in the event of loss.

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Tax Planning for Individuals Not Domiciled in the UK


Individuals who reside in the UK, but were born elsewhere and have foreign parents, or who may be thinking of moving to the UK, may not be subject to the full range of UK taxes. Special rules apply to persons who are not domiciled in the UK. A UK domiciled and resident person is subject to tax on worldwide income and capital gains and his worldwide assets are charged to inheritance tax on death. A person who is not so domiciled may be subject to tax on income and gains only to the extent that they are remitted to the UK and his estate liable to inheritance tax only on assets located in the UK.

This paper is intended to provide a general overview of the rules that apply to non-domiciled persons. However, it should not be taken as tax advice and reference should be made to a competent professional before setting up any structure referred to.


In English law everyone is born with a domicile. This is generally the domicile of the father and is known as the domicile of origin. The domicile of origin is retained until, by his actions, a person demonstrates that he has broken his ties to his domicile of origin and established a domicile elsewhere – a domicile of choice. Moving from elsewhere to the UK and making that country the permanent home with the intention of staying can be such an event.

General principles that apply to UK taxation

Residence and Ordinary Residence

The general rule is that a person who resides in the UK for a period of 183 days in a tax year is regarded as resident for tax purposes. He can also be resident if UK visits over a four-year period average more than 90 days a year. The timing of residence status based on annual visits depends on whether or not he intends making such visits at the outset. If so, residence begins immediately; otherwise it starts from the fifth year.

A person who spends an average of 90 days a year in the UK is regarded as ordinarily resident. He is also ordinarily resident if on arrival he intends to stay in the UK for three or more years. Occupying a property for three years or more is evidence of such an intention.

Income Tax

Income from UK sources is chargeable to income tax, generally without regard to residence status. The worldwide income of residents is generally taxable. An individual who is resident but not domiciled in the UK will not be liable to UK tax on investment income unless that income is remitted to the UK. The tax rules on remittances apply from the date residence commences whether or not the taxpayer is regarded as ordinarily resident.

Capital Gains Tax

Profits on sales of UK assets are chargeable to capital gains tax if the taxpayer is either resident or ordinarily resident in the UK at any time in the tax year in which a disposal is made.

Individuals who are not domiciled in the UK are only liable to capital gains tax on profits from the disposal of assets located outside the UK. Where the asset is denominated in a foreign currency the gain must be calculated in sterling using the rates of exchange on the dates of purchase and sale respectively.

Inheritance Tax

Individuals who are not domiciled in the UK are liable to inheritance tax in respect of assets located in the UK. Indeed such assets are within the charge to inheritance tax by whomsoever they are owned and wherever resident. Persons who are not domiciled in the UK are not liable to inheritance tax in respect of assets located outside the UK.

A person domiciled outside the UK is treated as being domiciled, for inheritance tax purposes only, if he has been resident in the UK in 17 out of 20 tax years.

Tax Planning Opportunities

An individual who is not domiciled in the UK is able to take advantage of the special rules described above to limit his liability to taxation, even if he is resident in the UK. If he does not need to remit foreign income or capital gains he can completely eliminate liability to UK taxation. Such protection from tax can be achieved by using the following two-step procedure:

  1. Form an offshore company in a jurisdiction, which does not impose taxes. There are many such territories and those we recommend are described elsewhere on our website. Transfer the UK assets to the company in exchange for shares. For UK tax purposes the asset owned by the non-domiciled person is now the shareholding and not the underlying assets. Being an investment in a foreign company the shareholding is outside the charge to inheritance tax. Assets located outside the UK should also be transferred to the company. This will protect them in the event that the individual acquires a UK domicile or deemed domicile and from similar taxes in the countries in which they are situated.
  2. Donate the shares in the company to the trustees of a family trust established in the tax- free territory outside the UK. The assets of a trust settled by a person who was at the time domiciled outside the UK are, if they are not UK assets, outside the charge to inheritance tax in the death of the settlor or on the death of any other beneficiary, wherever resident at that time. The trust accordingly continues to provide shelter from inheritance tax even if the person who set it up becomes domiciled in the UK. It may provide similar benefits if he later decides to return to his country of origin, or elsewhere. Visit for more information on the types of trust in common use.

Taxation of the trust and company

Whilst neither the trust nor the company can be taxed directly there are circumstances in which an individual resident in the UK can be charged to tax on the income and capital gains arising to the structure. This generally depends on where the settlor is resident.

UK Resident but not domiciled

Capital Gains Tax

Gains made by the trust or the company will not be subject to capital gains tax. This applies to UK assets as well as non-UK assets.

Capital gains remitted to beneficiaries who are resident in the UK but not domiciled there will not be charged to capital gains tax. Any UK resident and domiciled beneficiaries are taxed on any gains that they receive.

Income Tax

Foreign income within the trust is not subject to income tax, unless remitted to the UK.

UK source income received by the trust or company is taxable. This liability can sometimes be reduced particularly for UK rental income. If the settlor or his spouse is UK resident and can benefit from the trust he will be taxable on the UK income as it arises, whether remitted or not.

Inheritance Tax

An offshore trust established by a non-UK domiciled individual is only subject to inheritance tax if it has UK assets. As described above, inheritance tax on UK assets is avoided by holding them within an offshore company owned by the trust.

Not resident or domiciled in the UK

Capital Gains Tax

Gains made by the trust or company will not be subject to UK capital gains tax.

Income Tax

UK source income receivable by the trust or company is taxable. The liability can sometimes be reduced, particularly in respect of UK source rental income.

Inheritance Tax

An offshore trust established by a non-UK domiciled individual is only subject to inheritance tax if it has UK assets. As described above, inheritance tax on UK assets is avoided by holding them within an offshore company owned by the trust.

A trap to avoid

Non-UK Domiciled Spouses

Where an estate passes on death to a surviving spouse it is exempt from inheritance tax, but only when both spouses are UK domiciled. Where the survivor has a foreign domicile this exemption is limited and without planning, can result in a liability. Couples in this position should consider transferring assets from the UK domiciled spouse to the foreign domiciled spouse. If the recipient survives for seven years the gift will be free of inheritance tax on the death of the donor. The non-domiciled spouse will however be able to establish an offshore trust and company structure with all the benefits described above.

Ref: CO070606

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Affordable Health Insurance And The Wisdom In Loyalty Discounts

Affordable health insurance: If you want discounts, buy your health insurance policy from the same insurer you bought your other policies from. Every insurance company normally offers a discount if you buy more than one policy from them.

That said, it may not serve your best interest to do this as you might be better off if you buy each of your policies from different insurers. I’ll take some time out to explain this…

We’ll make believe that a certain profile got the following rates from different insurers when he shopped for different insurance policies…

Insurer A…

Health insurance: $2,320

Auto insurance: $2,487

Home insurance: $1,400

Insurer B…

Health insurance: $2,724

Auto insurance: $1,472

Home insurance: $2,120

Insurer C…

Health insurance: $1,640

Auto insurance: $3,500

Home insurance: $2,080

As is now obvious, the insurer who offered the best quote for auto insurance did not have the best for any other insurance policy. So here’s what he’ll get with a 10% discount if he goes ahead to still buy all his policies from Insurer B…

$1,472 + $2,120 + $2,724 = $6,316

$6316 – (10% of $6316) = $5,684.40

On the other hand, he’ll spend the following on insurance as a whole if he goes for the insurer who offers him the best for each policy…

$1,400 + $1,472 + $1,640 = $4,512

So even though he’ll get a multi-policy discount if he buys all his policies from one insurer, he’ll not save as much as he did by buying from different insurers. $1,172.40 is certainly not an amount you should throw away and that’s what he could have lost if he opted for a multi-policy discount instead.

You might be wondering how to find out whether it’s better for you to pass off a multi-policy discount or go for it. So here’s how to find out…

Make out some time to get and compare quotes for each of your different insurance policies from at least three insurance quotes sites. Pick the lowest rates offered for each your insurance policies and then simply compare their total with the total you’ll pay after a multi-policy discount and you’d know which is better in your case.

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