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Newsround - Memory techniques

Monday, March 17th, 2008

Children who can chant their times tables are better at doing sums, according to research.

Students practise several memory that might help them remember what they study.

Learning aims

Learn some of the following techniques:

acrostics
acronyms
number pictures
spelling memory tips
name pictures
grouping
journey pegs

Teaching ideas

Icebreaker

Click here to read the story Chanting tables ‘improves maths’

Ask students:

Have you ever used chanting as a way of remembering something? Does it work? What other memory techniques do you use?

Main activity

Chants and other memory techniques are called mnemonics. They are methods for remembering that is otherwise quite difficult to recall.

Pick three of these memory techniques for students to try.

A Rhyme

Ask students:

How many days are there in December, June, February?
How did you remember this information?

Many students will have used the rhyme:

30 days have September, April, June and November.
All the rest have 31, except for February alone.
When leap year comes once in four, February then has one day more.

Rhymes and songs like this one stick in your memory.

Here is another example:

In fourteen hundred and ninety-two,
Columbus sailed the ocean blue.

Ask students to create a rhyme which helps them remember the date of the Great Fire of London in 1666.

B Acrostic

One way to remember a list of words in order is to make up an acrostic using the first letter of each word in the list.

E.g. The colours of the rainbow in order, from the outside to inside are:
Red, Orange, Yellow, Green, Blue, Indigo and Violet.

They can be remembered using this acrostic:
Richard Of York Gave Battle In Vain.

Ask students to make up an acrostic to remember the order of the planets in the solar system, from the planet closest to the sun outwards.

The planets are: Mercury, Venus, Earth, Mars, Jupiter, Saturn, Uranus, Neptune, Pluto.

C Acronyms

Acronyms are similar to acrostics but they are words (as opposed to sentences) created by the first letters of a series of words.

Many organisations use acronyms such as Action on Smoking and Health or ASH.

Ask students to write down a list of five things they need to remember to bring to school and to make an acronym of them.

E.g. games Kit, reading Book, packed Lunch, school Trip money, Calculator

gives you…

BLoCK iT!

A top tip is to use vowels (aeiou) in the acronym but only let the consonants stand for the words to be remembered.

D Numbers and rhyme

A way of remembering numbers is by picturing objects that rhyme with each digit from 1 to 10.

E.g. 1 rhymes with bun
8 rhymes with gate
6 rhymes with sticks

So to remember that the speed of light is 186,000 miles per second, you imagine a bun (1) going through a gate made of sticks (6) whilst being struck by a two bolts of lightening.

This strange visual image will help you remember the numbers one, eight, and six in order and associate that figure with ‘light’ (lightning) and ‘per second’ (two bolts; first and second).

Ask students to write down a list of objects which rhyme with numbers zero to ten.

Using their rhyming list, students create a visual image to remember the speed of sound which is 340 miles a second.

E Spelling techniques
Breaking words down into parts can help you remember how to spell them, e.g:

A friend is always there when the end comes.
I before e except after c. This helps you remember how to spell words like retrieve and receive.
But remember weird is spelt weird!
Separate is a rat of a word to spell.
You wear one collar and two socks. This is a reminder of how many cs and ss in necessary.

Students chose a word they find difficult to spell and break it down into component parts.

They devise a spelling memory tip to help them remember the correct spelling.

F Grouping

Show students this list of sports:

Skiing, basketball, netball, tennis, long jump, 100m sprint, hockey, rounders, ice-skating, discus, golf, high jump, , javelin, football, rugby, lacrosse, cricket, gymnastics, hurdles.

Give them a minute to try and remember as many of them as possible.

Cover the list and ask them to write down all the sports they can remember.

Who remembered the most? Did they use any mnemonics?

Now ask students to group the sports into categories, e.g. athletics, sports played on a pitch, racquet sports.

They write down the sports under each heading and count how many sports there are in each group.

Students cover their lists and write down all the sports they can remember.

Ask students:

How many sports did you remember this time?
Why do you think it’s easier to remember information which has been ordered?

G Names and pictures

Ask each student to create a new first name for themselves.

In pairs, students brainstorm words they associate with their partner’s new name.
E.g. Nina could be associated with ‘ambulance’ (siren sound ni-na), ‘knee’ (Ni-na) and ‘Hyena’ (rhymes with Nina).

Picture your classmate alongside one of these objects e.g. with a flashing siren on her head.

This strange visual image will make it easier to remember their new name.

Students team up with another pair and try to remember their new names in the same way.

Some students could test their memory power by trying to remember the new names of all their classmates.

H Journey and peg

Another way to remember a chain of information is to peg each bit on a landmark from a familiar journey.

Ask students to think of a journey they do quite regularly. This could be the route to school or the journey from their bedroom to the front door.

Ask students to write down all the landmarks they pass in order, putting each on a new line.

ask them to select some information from one of the subjects they need to learn. If they can’t think of anything, they can use this summary of the gunpowder plot:

During the reign of Queen Elizabeth I, the government severely penalised Catholics.
When King James came to the throne, he followed suit.
In 1604, a group of English Catholics began planning to blow up the House of Lords and kill King James.
Guido Fawkes planned to light the fuse leading to the gunpowder before fleeing to Spain.
On November the 4th 1605, the storeroom below the House of Lords was searched and large quantities of gunpowder were found.
In January 1606, Fawkes and the other surviving plotters were executed as traitors.

Students write down each bit of information next to a landmark.

They imagine themselves making the journey, passing the bit of information pegged to each landmark. This will help them recall the details more easily.

Extension activity

Another good way of retaining information is to teach someone else what you have learned.

This method can help you remember 90 per cent of the information.

Ask students:

How would you teach the gunpowder plot summary to someone?
Would you use diagrams, flow charts?

In pairs, one student teaches their partner about the gunpowder plot and they in turn tell them what they have remembered.

Plenary

Students share their rhymes, acrostics, acronyms, number pictures, spelling memory tips, name pictures and journey pegs with the class.

Ask students: Which techniques did you find most useful and why?

News - Shop safe

Monday, March 17th, 2008

More and more of us are buying things on the internet. It’s easy to do from home and there are bargains in …

BUT there are many tales of disasters:

- People who’ve bought things on auction sites and never received their purchases.

- Promises of delivery dates that aren’t kept - so it’s too late for Christmas.

- Items that look good on a website but don’t work when you get them.

- No after sales service when things go wrong.

People have been doing mail order shopping for years but there seems to something a bit different about the internet. You don’t know where the business is and you don’t know who runs it and whether they are honest. Mail order has its crooks but there are more opportunities on the internet - so beware!

Just think…

Why do you think there are more opportunities for crooks on the internet than traditional mail order?

Looking after yourself

Whether you buy from a general shopping site or an auction site, there are rules to follow if you want to be sure that your bargain doesn’t become a disaster.

You have all the usual rights that apply when you buy anything from a shop. You can find more details about your rights on the Working Lunch website.

When you shop on the web you have some additional rights:

- Clear information about the goods or services offered before you buy.

- Written confirmation of this information after you have made your purchase.

- A ‘cooling off’ period during which an order can be cancelled without any reason and a full refund made.

- A full refund if the goods or services are not provided by the date you agreed. If you didn’t agree a date, then you are entitled to a refund if the goods or services are not provided within 30 days.

Just think…

Why do you think that people have extra rights when shopping on the web?

Safety tips

Remember that you may have to pay for shipping costs, customs duty, VAT, etc. All these hidden costs can push up the price of the goods or service. It should be quite clear if you are expected to pay any extra costs and VAT should be included in all prices quoted.

- Make a note of the company’s contact details, including a street address and landline telephone number. Never rely on just an email address.

- Make sure that the web address of the page starts https:// before you enter any personal information or payment details. The ’s’ stands for ’secure’. There should also be a small padlock that appears in the bottom of your screen.

- You should never be asked to tell anyone your card’s PIN number - even if they claim to be from your bank or the police. Never send your PIN number to anyone over the Internet.

- Always print out a copy of your order and a copy of the that you should receive.

- Always check your bank statements carefully if you purchase something on the Internet.

Buying from sites outside the European Union may be more risky because guarantees may not apply and it’s much harder to pursue companies which don’t meet their claims.

Just think…

Look at each of the tips and explain why it is important to carry them out.

Is there any other advice you might give to internet shoppers?

What about auctions?

Auctions may be even more tempting than other web deals. There are some real bargains to be had…

BUT they are less secure than buying from a company which sells on line. In fact - it’s just like buying from a small ad in the local paper. If you buy locally - you often look at the product before you go ahead. You can’t do that on an internet auction.

Safety tips

What’s the seller’s reputation?

Most auction sites post feedback ratings of sellers based on comments by other buyers. Look to see how many deals the person giving feedback has carried out on line; a number next to their name will indicate this. Be careful - some traders will make up accounts and post good comments about ! Ask questions before you bid; eg what is the returns policy? A good seller will always welcome enquiries.

Is it the right product?

Check the , type of model and retail price of the goods. Be wary: if the price is too good to be true, it’s probably not what you expect!

How can you pay?

If it’s only cheques or money orders, there is a risk. You’ll send off the money and the your purchases may never arrive - or not be as described. If possible, you should use a credit card because it offers the most protection if there’s a problem.

Is it the right price?

Know how much you are willing to pay, stick to it, and think whether you are getting value for money. Once a price is accepted, you will be expected to pay.

Have you got all the facts?

Is postage included in the price? How will the goods be posted? Do you need extra insurance? Is the seller based in the UK? If not what action can you take if things go wrong?

If it all goes wrong - who will help?

Consumer Direct should be able to help. It’s a government agency which aims to help consumers with information and support.

Just think…

Why are auctions more risky than other sorts of internet purchases?

Why is buying with a credit card safer than sending money off to the seller before you see your purchases?

Why is internet buying in general riskier than buying from a shop?

Why not produce a leaflet your younger children, their rights. Even though they can’t make the purchases themselves, they often persuade parents to do it. Parents often don’t know all the problems either!

News - Help with Tax

Monday, March 17th, 2008

John Whiting, tax partner at PricewaterhouseCoopers, answers your questions about tax.

Mr. King from Fife has a question on inheritance tax; he wants to know if funeral expenses, solicitor’s fees, executors’ expenses, unpaid debts and charities are exempt from the tax? He is 84 years old and manages his finances himself; in the event of his death he will only require a solicitor to handle the winding up of his affairs in accordance with his will.

When somebody dies, inheritance tax is calculated by reference to the value of the estate on death - essentially open market value of the estate. From this, it is possible to deduct a limited range of liabilities such as:

Reasonable funeral expenses (what is reasonable can depend on who you are).

Your general unpaid debts.

Expenses in or realising property situated outside the UK (up to 5%).

Unfortunately solicitor’s fees and executors’ expenses are not deductible when it comes to inheritance tax. However, if you leave money to a charity, such gifts are left out of your estate when it comes to working out the tax - so if your estate were 300,000 and you left 50,000 to a charity, that would mean for IHT purposes you had left an estate of 250,000 to all intents and purposes.

David Storey from Wakefield has a question about share dividends:

When payment is received either as a cheque or payment in respect of free shares. What is the correct date to declare on my tax return, the company year-end date or the date the payment is received?

You use payment date rather than the company year-end date for tax return purposes. Dividend payments, for example, always show the effective date of the payment and you need to be guided by this. The company’s year for which the payment is made is irrelevant for deciding which tax year the dividend falls into.

Jonathan Edmunds from Devon has a question about his tax coding. In January he was given a tax coding for next year that included not only the money he owed from self-assessment but an addition of 2900 for next year based on assumed extra earnings.

He complained about this and they have removed it. Is it common practice for the Revenue to overestimate earnings in this way, and can you always get it changed?

This highlights an issue that has received a deal of publicity recently and which a lot of taxpayers need to be aware of. Traditionally tax codes have been used simply to tax wages, salaries and pensions. They are also used to tax benefits and to recover small underpayments of tax in one year, all done by reducing your code and thus the amount of tax-free pay that you get.

Partly in an effort to stop some taxpayers having to fill in self assessment tax returns, the Revenue have started to use the tax code to collect small amounts of tax due on investment income from higher rate taxpayers who have a little bit more tax to pay. Thus they’d be paying the tax during the year through their tax code rather than after the year via completing their tax return. This is fine in principle but if as is probable your income from investments fluctuates, the taxpayer will still be faced with checking the amounts and potentially making a further small payment or reclaim after the year end.

For small amounts, then, this is a sensible enough procedure. However the Revenue have taken powers to formalise this procedure - it happened in practice to recover sundry small fees as well - but have in some cases started to suggest they can use the tax code to collect quite significant amounts of tax on freelance earnings and rentals. The problem is, as you no doubt highlighted to them, the amounts are uncertain and you have no way of knowing whether you will receive them. Many people will in any case have to make payments on account of these tax liabilities. The taxpayer has a right to object to this coding and in my view should certainly do so if the amounts of extra income are at all uncertain. Otherwise they could find themselves at best temporarily out of pocket because they have paid the tax earlier than necessary.

Jacob Caudwell doesn’t have a company car but uses his own for work for which he gets compensated 35p per mile. He pays more for business insurance and also loses more each year in as he does around 75000 miles a year. How is he effected by taxation?

If you use your own car for work - not just for commuting to work but for actual business mileage - the Revenue has a standard rate of mileage allowance. This is 40p for the first 10,000 miles a year and 25p for miles thereafter.

What this means is that if your employer reimburses you at these rates, the amounts are tax-free. If they pay you more than this, the excess is taxable; if they pay you less then you can claim the balance as an expense through your tax return. If you are doing 75,000 business miles and have received 35p a miles for this, I am afraid that you are facing a potential tax bill on 6,000.

This may seem unjust to you as it may well be that the mileage allowances don’t compensate for the total costs of running your car. Unfortunately there is no alternative other than perhaps to go to your employer and suggest it really is about time they provided you with a company car.

Graeme Coker from Merseyside says that he and his wife put a deposit on a new build property last June and have been living with their parents until completion. They’re now thinking of selling the house, which has gone up in value by around 20,000. Would they have to pay capital gains?

This is an interesting question. As no doubt you are well aware, individuals or married couples don’t pay tax on their “principal private residence” - i.e. the house they live in. But strictly you have to have occupied the house so that it is clearly demonstrated to be your residence. If you haven’t lived there, even for a modest period, the Revenue could argue that there is no capital gains tax exemption due. If that were the case, you’d have to pay CGT on the gain you have made though costs (such as estate agents and lawyers fees) would be deductible and once the gain has been split between you and your wife you may well find that the capital gains tax annual exemption would cover the residual gain leaving you with no tax bill.

However, there is another lurking danger. The Revenue may assert that in fact you are due to pay income tax on this gain that you made - that you went into this transaction with the intention of making a profit. That’s something you may be able to demonstrate simply wasn’t the case but you need to be aware of the risk and plan accordingly. Perhaps it would be worth going to live there for a spell!

Jan Whitehead from Kent is considering selling an investment property. By so doing, she would be liable for Capital Gains Tax? If instead, she takes out a mortgage on the property and transfers the funds raised into buying a new investment property would this be a better option?

If you take out a mortgage to buy a property that you are renting out, then the interest that you pay on the mortgage loan is deductible from your rental income. This is an important feature of the calculation of the or otherwise of the buy-to-let market. Currently there is no limit on the amount of mortgage interest that you can get tax relief for in this way - it’s not like the old 30,000 limit that there was for MIRAS relief.

Whether or not you have a mortgage doesn’t affect the capital gains tax calculation. That is simply in terms of the difference between what you get for the property less what you paid for it, adjusted for all the various costs you’ve incurred of a capital nature - but the mortgage is a separate matter.

John Clark from Newcastle upon Tyne is asking for some top tips on mitigating the effect of inheritance tax on an estate of about 500,000?

Clearly if you’ve got an estate of about 500,000, you’re into the inheritance tax net and if it all went to your children, for example, your estate would be facing an IHT bill of around 100,000.

In terms of three top tips, I would say:

1. Make a will - although this doesn’t necessarily save IHT, at least it means your assets go where you want them to.

2. Any married couple should do this as a joint exercise to work out where the assets will go and try and make sure that best use is made of both partners’ nil rate IHT band.

3. Consider starting to give away assets now - make use of the annual exemption, the exemption for normal gifts out of income and consider whether you can make larger gifts which, provided you survive 7 years, will be outside the inheritance tax net.

We could then talk about whether investing in agricultural or business property was appropriate as these get good reliefs, whether you should give away to children or grandchildren, whether Trusts have a part to play in gifting and various other ideas but I hope this will do for starters!

Malcolm Conway asks, is the value of large monetary gifts given in the final seven years of somebody’s life added to the value of their estate before inheritance tax is calculated? He and his wife own their house as ‘tenants in common’, can you explain how this affects the estate following the death of the first partner?

When working out the value of somebody’s estate, gifts made within the 7 years before death are indeed added to the estate and count as the first “slice” of value when it comes to utilising the inheritance tax nil-rate band. If you and your wife made a joint gift to children of (say) 100,000, that would be treated as if you had each made a gift of 50,000 in normal .

Your owning the house as tenants in common means that you and your wife each own your own share of the house. That means that on death you can leave your half to whomever you wish. This is in contrast to “joint tenants” which is the way most people own their houses. In such cases, when one party dies, the other joint tenant gets the whole property.

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Sport - Venues for Cup semi-finals named

Sunday, March 16th, 2008

Hull Kingston Rovers and St Helens will play their Challenge Cup semi-final at Huddersfield’s Galpharm Stadium on Saturday, 29 July (1230 BST).

Rovers, who beat Warrington to become only the second National League club to reach the semis, lifted the Cup for the only time in their history in 1980.

In the other last-four clash, Leeds, beaten finalists in two of the last three years, take on Huddersfield.

That game takes place at Bradford’s Odsal Stadium on 30 July (1500 BST).

What better way than to test yourself against the team that is at the top of the Super League

Hull KR coach Justin Morgan

The Leeds tie will pit Giants coach Jon Sharp against his old Huddersfield boss Tony Smith.

Hull KR coach Justin Morgan will also be up against a familiar foe, his former Parramatta and New Zealand Warriors boss Daniel Anderson.

Family ties will also be tested as brother Hunter is married to fellow Morgan’s sister Nicole.

“I see it as a nice reward,” said Morgan, who also took Toulouse to the semi-finals last year.

“I’m quite pleased with the draw.

“It will be a great occasion for the club and the players. What better way than to test yourself against the team that is at the top of the Super League.

“They’ve got some great players and they play a great brand of rugby league. They’re sprinkled with superstars.”

Anderson has guided Saints to 14 wins from their 15 matches so far in Super League XI, while Rovers’ 40-36 Warrington victory was a Hull KR 18th straight win.

I think Huddersfield are a real dangerous package

Leeds assistant coach Brian McDermott

Anderson said: “It was a little bit nerve-wracking watching the draw. It’s not that I didn’t want to play Leeds but we play them the week before the semis.

“It would have been an ugly little couple of weeks with smoke and mirrors.”

In the Yorkshire derby, the Rhinos will be firm favourites but assistant coach Brian McDermott is warning his team to beware of his former Bradford team-mate Robbie Paul.

The 30-year-old Kiwi is a veteran of five Cup finals and was the Giants’ man of the match in their 44-14 quarter-final win over Salford.

“I think Huddersfield are a real dangerous package,” said McDermott.

“Everyone knows what St Helens are about and Hull KR have shocked the game of rugby league with their win over Warrington.

No-one will expect us to win…which means all the pressure will be on Leeds

Giants coach Jon Sharp

“But no one appears to be talking about the Giants. You just have to look at how they tore Salford apart to see how good they are. They will be a real threat.

“Huddersfield have hit some form recently and Brad Drew in particular has been outstanding and then they’ve got a little fellow who I know plenty about in Robbie Paul.

“Robbie is . He doesn’t play too much to game plans but he can rip any team apart. He will be a very dangerous player against us.

“He has experience of playing in semi-finals and I am sure he will be able to give them some tips on .”

Huddersfield’s Sharp said: “We’re happy with the draw. It’s a game where we know we’ve nothing to lose and everything to gain.

“No-one will expect us to win, apart from those inside this club, which means all the pressure will be on Leeds.

“It’s a tie where we can go out there and enjoy the occasion.”

The final will take place at Twickenham on 26 August.

And some information of .

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News - Your shares questions tackled

Sunday, March 16th, 2008

Justin Urquhart Stewart, the co-founder and director of Seven Investment Management answered your questions on Friday’s programme.

I’ve always wanted to “dabble” in the world of shares but have never known where to start! Where do I go? Is there a dummies guide to shares somewhere?

How do you know when in the year is a good time to start buying? Initially how much should you put down to “test the water?”

Ajay.

Without wishing to endorse any particular guide, there are a number of online resources for this sort of thing, examples of which can be found at:

www.digitallook.com

www.proshareclubs.co.uk

www.moneyweek.com

Stock markets are, by their very nature, in a constant state of flux, so it is impossible to state categorically when is ‘the right time’ to begin dabbling - it will depend on market fluctuations and economic conditions at the time. Most experts will agree that “time in the market” is more important than trying to time the market.

As a general rule, due to the relatively high-risk / high-volatility nature of directly traded shares, they should be treated as medium to long-term investments (a minimum of five years), and should only really make up the proportion of an individual’s portfolio that they can afford to lose.

I have found the best way to learn is with an investment club. These allow you to learn about shares and share trading but without losing your shirt!

Contact Proshare Clubs to find out more and it can be a great way of learning with friends from as little as say 25 per month - well they start off as friends anyway. I belong to one as well.

How do I learn about shares, with a view to investing and hopefully trying to make some money, I don’t have much to invest to start with, say between 2,000 to 5,000.

Any advice would be very helpful as I know very little at present.

Simon Cobrettie.

The stock market, and ways to make money investing, is a vast topic to cover and as such I can recommend the following websites. These should provide good overviews of the markets, how they work and advice for novice investors.

www.citywire.co.uk

www.thisismoney.co.uk

In light of the money you have to invest, you may want to avoid investing in listed companies directly as this could be a very risky and volatile strategy.

Instead I would advocate a much lower risk approach and recommend you invest through instruments that track markets as a whole i.e. the FTSE 100, S&P 500 etc. The cheapest way to access to these tracking instruments is through Exchange Traded Funds (ETF). These trade like ordinary shares but track specific indices and for more information I recommend you take a look at the ishares website.

www.ishares.co.uk

Pooled investments such Unit Trust and OEIC funds are a way of gaining exposure to stock markets with the advantage of lower levels of risk via diversification, with actively-managed funds benefiting further from the continued expertise and monitoring of experienced investment managers. But watch out for the charges (and their deductions).

Eurotunnel has been through a long period of restructuring and we’ve heard from two of their shareholders. I own some Eurotunnel shares and I’ve recently received something in the post about a share swap scheme, unfortunately the accompanying information is extremely difficult to understand and I wanted to know whether it would be better for me to participate in the share swap or keep what I have? I don’t even know what the purpose of the share swap scheme is so it’s hard to make a decision either way.

Antonio Montana.

I have just received a mass of paper from Eurotunnel regarding an offer to exchange my units for new ones. If you have time perhaps a few minutes of your programme could explain what the choices are. The closing date is May 15th.

Julian Fisher.

Groupe Eurotunnel SA is in the process of absorbing Eurotunnel Plc and Eurotunnel SA in a bid to restructure the company’s 6.2bn debt. You are being offered shares/bonds in the new company Groupe Eurotunnel SA and the options available to you are to exchange each unit of Eurotunnel Plc for 1 ordinary Groupe Eurotunnel SA and 1 ordinary equity warrant.

Should you wish to take up this offer you will have the added option of subscribing to a basket of bonds, further details of which should be provided by Eurotunnel Plc shortly. Alternatively, you may wish to take no action at all. However, you should be aware that the cut off date for responses is 10 May 2007.

Lastly, it is my that under the new agreement shareholders will be eligible for six single journeys a year at a discount of 30% until 2010. After this date all shareholder perks will be at the discretion of the management, full details of which can be found in your pack.

By chance I received an offer from Hargreaves Lansdown this morning to buy shares in their company which is floating in a few months. My question is how do you analyse the market potential of a financial institution, especially one that is essentially an intermediary?

Nick.

Good question - I will be looking at the proportion of recurring income from fees as opposed to sales. The value being that the fees are likely to increase the longer term value of the business.

Hargreaves Lansdown have grown their business very well but I would be tempted to wait until after the flotation to see if the valuation comes back a bit.

However, I suspect with that client base they may become a takeover target for firms wishing to enter the UK market in scale.

Please could you explain, what is meant by “share buy back” when a company announces this, is it a benefit to shareholders?

Bob Hunt.

‘Share Buyback’ is the buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake in that company.

A buyback is a method for a company to invest in itself since they can’t own themselves. Thus, buybacks reduce the number of shares outstanding on the market which increases the proportion of shares the company owns. Buybacks can be carried out in two ways:

1. Shareholders may be presented with a tender offer whereby they have the option to submit (or tender) a portion or all of their shares within a certain time frame and at a premium to the current market price. This premium compensates investors for tendering their shares rather than holding on to them.

2. Companies buy back shares on the open market over an extended period of time.

I have been trying for a year to transfer my shares in an American oil company to my son. However I have so far been unable to do this because it requires Medallion Guarantee Signature. Can you tell me how someone in my position living in Scotland can possibly gain the Medallion Guarantee Signature?

GS Bennett.

The Medallion Guarantee Scheme is a method of trying to provide assurance to a transfer of US stock. It is a bit like and indemnity that would be signed if you lost a share certificate.

A good stockbroker who handles US stocks should be able to help. My old firm of Barclays Stockbrokers in Glasgow should be able to help. There will be a charge but this will vary from firm to firm.

I bought just over 4000 shares in British Airways via the ’staff incentive scheme’ over several years, all at different price levels. The last acquisition of the shares was in 1999.

My question is twofold:

a. If I sell now, would there be an amount of profit where I enter the capital gains tax arena?

b. Could you also advise the best way to sell shares thereby minimising agent fees?

John Cunningham.

John, without knowing the amounts and purchase dates of your British Airways shares I am unable to comment on your capital gains tax liability. What I can tell you is that any gain over 9,200 is subject to Capital Gains Tax for the 07/08 tax year.

To find out what level of tax you would need to pay, if any at all, I recommend you look at the Inland Revenue’s website:

www.hmrc.gov.uk

If you are still unsure about your tax liability I suggest you seek advice from a qualified accountant.

In answer to your second question there are a number of online share dealing firms that offer varying commission rates. I have provided internet addresses for a number of these and I’ll let you make your own comparison.

Alternatively, if you hold the shares in certificated form, the easiest way to sell them would be directly through the registrar - Computershare Investor Services 0870 702 0002.

www.etrade.co.uk

www.tdwaterhouse.co.uk

www.stockbrokers.barclays.co.uk

www.iii.co.uk

I am being approached by ‘phone by a company in the name of “Regency” whom I understand are in Bahrain. They are offering me shares in a company which apparantely is due to float into the stock market arround September/October 2007. The company’s name is US Petroleum Holdings.

My questions are:

a. Is there a way I can check out these Companies, Regency and US Petroleum Holdings.

b. Is there a way I can check out whether or not US Petroleum Holdings are due to float into the stock market.

c. Is this usual for companies to approach individuals and try to sell them shares in companies before they float? I am only a very, very small investor in the stock market and therefore would not make any difference to these companies with my investment. However, if what they claim is true they could make a little difference to me.”

Manuela Vazquez .

The internet is a good way to find basic details of a company. If the company is UK based you can check its validity with Companies House. Their website is:

www.companieshouse.gov.uk

You should always seek professional guidance from an adviser or stockbroker as not all companies advertised are as honest as they appear. They will be able to reassure you of the validity of the company and whether they are about to float.

You should beware of ‘Boiler rooms’, who are high pressure sales firms, often based overseas, who target investors - often investors - to illegally offer them non-tradeable, overpriced or even non-existent shares. They acquire shareholder lists legitimately using data supplied under the Companies Act or from other sources.

The best advise I can give is that if you are unsure always check with a trusted professional advisor.

I understand that brokers have their private clients, and the clients pay for a service, which includes advice on shares.

What puzzles me is the status of broker’s tips that are found in the media and on certain internet financial pages.

Are these tips leaked information by clients, or freebies released by brokers to advertise their service.
I’m not really sure how brokers actually buy and sell shares, match deals and how prices are fixed.

Dave Lawton .

An Analyst within a stock broking firm will produce research notes and initially present them to existing clients. Thereafter, the stock broking firm may chose to release these notes to the media with the intention that if a particular recommendation does well, it may raise the profile of the firm.

However beware as often research can be produced by brokers who represent the company and therefore have a certain bias. Also beware it’s age as they go out of date very quickly and also if it is for the retail market or for the market (if you have a spare 500,000 around!)

In basic terms, the role of the stockbroker is to act on behalf of investors in the purchasing and selling of securities. To do so, they approach “Market Makers” who make markets by quoting both the buy and sell price of individual stocks and shares.

Alliance Boots has just been taken over by a private equity group. Many of our viewers are shareholders in the company - what happens to them?

The shareholders are going to be offered 11.39 per share and that includes the last dividend.
Not all the details have been finalised yet, so you have to wait for Alliance Boots to write to you.

The opinions expressed are Justin’s, not the programme’s. The answers are not intended to be definitive and should be used for guidance only. Always seek professional advice for your own particular situation.

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News - Help with Tax

Saturday, March 15th, 2008

John Whiting, tax partner at PricewaterhouseCoopers, answers your questions about tax.

Mr. King from Fife has a question on inheritance tax; he wants to know if funeral expenses, solicitor’s fees, executors’ expenses, unpaid debts and charities are exempt from the tax? He is 84 years old and manages his finances himself; in the event of his death he will only require a solicitor to handle the winding up of his affairs in accordance with his will.

When somebody dies, inheritance tax is calculated by reference to the value of the estate on death - essentially open market value of the estate. From this, it is possible to deduct a limited range of liabilities such as:

Reasonable funeral expenses (what is reasonable can depend on who you are).

Your general unpaid debts.

Expenses in administering or realising property situated outside the UK (up to 5%).

Unfortunately solicitor’s fees and executors’ expenses are not deductible when it comes to inheritance tax. However, if you leave money to a charity, such gifts are left out of your estate when it comes to working out the tax - so if your estate were 300,000 and you left 50,000 to a charity, that would mean for IHT purposes you had left an estate of 250,000 to all intents and purposes.

David Storey from Wakefield has a question about share dividends:

When payment is received either as a cheque or payment in respect of free shares. What is the correct date to declare on my tax return, the company year-end date or the date the payment is received?

You use payment date rather than the company year-end date for tax return purposes. Dividend payments, for example, always show the effective date of the payment and you need to be guided by this. The company’s year for which the payment is made is irrelevant for deciding which tax year the dividend falls into.

Jonathan Edmunds from Devon has a question about his tax coding. In January he was given a tax coding for next year that included not only the money he owed from self-assessment but an addition of 2900 for next year based on assumed extra earnings.

He complained about this and they have removed it. Is it common practice for the Revenue to overestimate earnings in this way, and can you always get it changed?

This highlights an issue that has received a deal of publicity recently and which a lot of taxpayers need to be aware of. tax codes have been used simply to tax wages, salaries and pensions. They are also used to tax benefits and to recover small underpayments of tax in one year, all done by reducing your code and thus the amount of tax-free pay that you get.

Partly in an effort to stop some taxpayers having to fill in self assessment tax returns, the Revenue have started to use the tax code to collect small amounts of tax due on investment income from higher rate taxpayers who have a little bit more tax to pay. Thus they’d be paying the tax during the year through their tax code rather than after the year via completing their tax return. This is fine in principle but if as is probable your income from investments fluctuates, the taxpayer will still be faced with checking the amounts and potentially making a further small payment or reclaim after the year end.

For small amounts, then, this is a sensible enough procedure. However the Revenue have taken powers to formalise this procedure - it happened in practice to recover sundry small fees as well - but have in some cases started to suggest they can use the tax code to collect quite significant amounts of tax on freelance earnings and rentals. The problem is, as you no doubt highlighted to them, the amounts are uncertain and you have no way of knowing whether you will receive them. Many people will in any case have to make payments on account of these tax liabilities. The taxpayer has a right to object to this coding and in my view should certainly do so if the amounts of extra income are at all uncertain. Otherwise they could find themselves at best temporarily out of pocket because they have paid the tax earlier than necessary.

Jacob Caudwell doesn’t have a company car but uses his own for work for which he gets compensated 35p per mile. He pays more for business insurance and also loses more each year in depreciation as he does around 75000 miles a year. How is he effected by taxation?

If you use your own car for work - not just for commuting to work but for actual business mileage - the Revenue has a standard rate of mileage allowance. This is 40p for the first 10,000 miles a year and 25p for miles thereafter.

What this means is that if your employer reimburses you at these rates, the amounts are tax-free. If they pay you more than this, the excess is taxable; if they pay you less then you can claim the balance as an expense through your tax return. If you are doing 75,000 business miles and have received 35p a miles for this, I am afraid that you are facing a potential tax bill on 6,000.

This may seem unjust to you as it may well be that the mileage allowances don’t compensate for the total costs of running your car. Unfortunately there is no alternative other than perhaps to go to your employer and suggest it really is about time they provided you with a company car.

Graeme Coker from Merseyside says that he and his wife put a deposit on a new build property last June and have been living with their parents until completion. They’re now thinking of selling the house, which has gone up in value by around 20,000. Would they have to pay capital gains?

This is an interesting question. As no doubt you are well aware, individuals or married couples don’t pay tax on their “principal private residence” - i.e. the house they live in. But strictly you have to have occupied the house so that it is clearly demonstrated to be your residence. If you haven’t lived there, even for a modest period, the Revenue could argue that there is no capital gains tax exemption due. If that were the case, you’d have to pay CGT on the gain you have made though costs (such as estate agents and lawyers fees) would be deductible and once the gain has been split between you and your wife you may well find that the capital gains tax annual exemption would cover the residual gain leaving you with no tax bill.

However, there is another lurking danger. The Revenue may assert that in fact you are due to pay income tax on this gain that you made - that you went into this transaction with the intention of making a profit. That’s something you may be able to demonstrate simply wasn’t the case but you need to be aware of the risk and plan accordingly. Perhaps it would be worth going to live there for a spell!

Jan Whitehead from Kent is considering selling an investment property. By so doing, she would be liable for Capital Gains Tax? If instead, she takes out a mortgage on the property and transfers the funds raised into buying a new investment property would this be a better option?

If you take out a mortgage to buy a property that you are renting out, then the interest that you pay on the mortgage loan is deductible from your rental income. This is an important feature of the of the attractiveness or otherwise of the buy-to-let market. Currently there is no limit on the amount of mortgage interest that you can get tax relief for in this way - it’s not like the old 30,000 limit that there was for MIRAS relief.

Whether or not you have a mortgage doesn’t affect the capital gains tax calculation. That is simply in terms of the difference between what you get for the property less what you paid for it, adjusted for all the various costs you’ve incurred of a capital nature - but the mortgage is a separate matter.

John Clark from Newcastle upon Tyne is asking for some top tips on mitigating the effect of inheritance tax on an estate of about 500,000?

Clearly if you’ve got an estate of about 500,000, you’re into the inheritance tax net and if it all went to your children, for example, your estate would be facing an IHT bill of around 100,000.

In terms of three top tips, I would say:

1. Make a will - although this doesn’t necessarily save IHT, at least it means your assets go where you want them to.

2. Any married couple should do this as a joint exercise to work out where the assets will go and try and make sure that best use is made of both partners’ nil rate IHT band.

3. Consider starting to give away assets now - make use of the annual exemption, the exemption for normal gifts out of income and consider whether you can make larger gifts which, provided you survive 7 years, will be outside the inheritance tax net.

We could then talk about whether investing in or business property was appropriate as these get good reliefs, whether you should give away to children or grandchildren, whether Trusts have a part to play in gifting and various other ideas but I hope this will do for starters!

Malcolm Conway asks, is the value of large monetary gifts given in the final seven years of somebody’s life added to the value of their estate before inheritance tax is calculated? He and his wife own their house as ‘tenants in common’, can you explain how this affects the estate following the death of the first partner?

When working out the value of somebody’s estate, gifts made within the 7 years before death are indeed added to the estate and count as the first “slice” of value when it comes to utilising the inheritance tax nil-rate band. If you and your wife made a joint gift to children of (say) 100,000, that would be treated as if you had each made a gift of 50,000 in normal circumstances.

Your owning the house as tenants in common means that you and your wife each own your own share of the house. That means that on death you can leave your half to whomever you wish. This is in contrast to “joint tenants” which is the way most people own their houses. In such cases, when one party dies, the other joint tenant gets the whole property.

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Sport - Venues for Cup semi-finals named

Saturday, March 15th, 2008

Hull Kingston Rovers and St Helens will play their Challenge Cup semi-final at Huddersfield’s Galpharm Stadium on Saturday, 29 July (1230 BST).

Rovers, who beat Warrington to become only the second National League club to reach the semis, lifted the Cup for the only time in their history in 1980.

In the other last-four clash, Leeds, beaten finalists in two of the last three years, take on Huddersfield.

That game takes place at Bradford’s Odsal Stadium on 30 July (1500 BST).

What better way than to test yourself against the team that is at the top of the Super League

Hull KR coach Justin Morgan

The Leeds tie will pit Giants coach Jon Sharp against his old Huddersfield boss Tony Smith.

Hull KR coach Justin Morgan will also be up against a familiar foe, his former and New Zealand Warriors boss Daniel Anderson.

Family ties will also be tested as Anderson’s brother Hunter is married to fellow Morgan’s sister Nicole.

“I see it as a nice reward,” said Morgan, who also took Toulouse to the semi-finals last year.

“I’m quite pleased with the draw.

“It will be a great occasion for the club and the players. What better way than to test yourself against the team that is at the top of the Super League.

“They’ve got some great players and they play a great brand of rugby league. They’re sprinkled with .”

Anderson has guided Saints to 14 wins from their 15 matches so far in Super League XI, while Rovers’ 40-36 Warrington victory was a Hull KR 18th straight win.

I think Huddersfield are a real dangerous package

Leeds assistant coach Brian McDermott

Anderson said: “It was a little bit nerve-wracking watching the draw. It’s not that I didn’t want to play Leeds but we play them the week before the semis.

“It would have been an ugly little couple of weeks with smoke and mirrors.”

In the Yorkshire derby, the Rhinos will be firm favourites but assistant coach Brian McDermott is warning his team to beware of his former Bradford team-mate Robbie Paul.

The 30-year-old Kiwi is a veteran of five Cup finals and was the Giants’ man of the match in their 44-14 quarter-final win over Salford.

“I think Huddersfield are a real dangerous package,” said McDermott.

“Everyone knows what St Helens are about and Hull KR have shocked the game of rugby league with their win over Warrington.

No-one will expect us to win…which means all the pressure will be on Leeds

Giants coach Jon Sharp

“But no one appears to be talking about the Giants. You just have to look at how they tore Salford apart to see how good they are. They will be a real threat.

“Huddersfield have hit some form recently and Brad Drew in particular has been outstanding and then they’ve got a little fellow who I know plenty about in Robbie Paul.

“Robbie is unpredictable. He doesn’t play too much to game plans but he can rip any team apart. He will be a very dangerous player against us.

“He has experience of playing in semi-finals and I am sure he will be able to give them some tips on preparation.”

Huddersfield’s Sharp said: “We’re happy with the draw. It’s a game where we know we’ve nothing to lose and everything to gain.

“No-one will expect us to win, apart from those inside this club, which means all the pressure will be on Leeds.

“It’s a tie where we can go out there and enjoy the occasion.”

The final will take place at Twickenham on 26 August.

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News - Help with Tax

Friday, March 14th, 2008

John Whiting, tax partner at , answers your questions about tax.