Latest news with #EIS
Telegraph
a day ago
- Business
- Telegraph
Inheritance tax is heinous, but avoiding it could be a bigger disaster
They say nothing in life is certain but death and taxes, but I propose to add a third to the list: investors doing everything imaginable to avoid taxes. The bigger the bite HMRC wants, the heavier the hustle to shield hard-earned assets. Thanks to Labour dragging pensions into the inheritance tax net, it is now a stampede. Yet the avoidance path conceals huge pits I've watched investors fall into throughout my 50 years managing money. Estate planning is wonderful, but too often, sensible planning leads to tax considerations dictating investment decisions. This raises risk, reduces returns and can hit your planned inheritance much harder than any tax rise. Consider popular ways people now seek to shield pensions from inheritance tax: investing in Aim shares is one, with the double benefit of stamp duty exemption and business property relief. Enterprise Investing Schemes (EIS) are another, and business property relief schemes letting you access unlisted companies is a third. All these sprang from past governments' investment incentives, hoping to spur entrepreneurship and startups. A fine aim. But pursuing a strategy aimed at these incentives solely for tax benefits aren't the sunlit uplands some promise. You don't need me to tell you Aim has a long history of scandals and failures alongside those select success stories that graduated to the main market. Or that its stocks are Britain's tiniest, with a median market capitalisation of £15m. Or that FTSE's Aim All Share is down nearly -30pc since 2000, while the FTSE All Share has soared over 275pc. Astronomical missed returns are a dear price to pay for tax relief, particularly one whose relief is rapidly diminishing – Aim stocks' BPR relief drops from 100pc to 50pc next year. EIS and BPR schemes carry another risk: overloading on unlisted companies. These sport the veneer of stability and, in EIS's case, supposedly high growth potential. They are billed as a way for normal folks to invest in venture capital and reap big rewards when a startup hits it big, but the reality is those are needles in a haystack of hard-to-value, illiquid investments. Winners aren't guaranteed – untraded doesn't mean stable. It just means fewer pricing points, hiding the inherent behind-the-scenes volatility. That is illiquidity – a bug, not a feature. You risk being unable to sell when you really need to without suffering a steep discount. Aim companies aren't categorically horrid. Some are fine, even great. EIS and BPR can also be fine tools, in certain situations. But it all depends on your broader goals and time horizon, which gets us to the root of the problem. Your fixation on tax steers you away from why you invested in the first place. Done right, long-term investing is about picking the correct asset allocation – the blend of stocks, bonds and other securities – for reaching your goals over your investment time horizon. Your goals are the primary purpose for your money, usually growth, cash flow or some combination of the two. Your time horizon is how long your money must last, usually your lifetime – clearly longer if inheritance tax is a concern. Throughout history, stocks and bonds have done a marvellous job of delivering the growth and cash flow people need, given a sufficiently long-term horizon and reasonable withdrawals. Stocks deliver abundant long-term growth, despite bear markets and volatility along the way, while bonds cushion expected short-term volatility and support cash flow with interest. British and global listed stocks and bonds are liquid – easy to sell in a pinch to cover expenses both expected and sudden. When tax avoidance takes supremacy, will you let it steer you from whichever liquid asset allocation aligned with your goals and needs? If your pension is loaded with Aim shares, EIS or BPR schemes to reduce inheritance tax, it risks not delivering the returns needed to support your cash flow later on. Aged poverty is a real pain. Or maybe your pension ends up worth vastly less for your heirs, after tax, than if you had opted for a simple blend of stocks and bonds. If you have a sudden expense, your pension may not be liquid enough to cover it. Then what do you do? Borrow? Don't forget, tax policy is a whack-a-mole game. Pensions were exempt from inheritance tax until they weren't. After halving Aim relief in 2024's Budget, Labour capped BPR last year. Some ministers floated scrapping Aim relief altogether. What then? If you focus on tax optimisation, you may find yourself needing to make big changes again. And again. And again. Changes cost money. Taxes are certain in general, but the specifics are shape-shifting. When your goals and time horizon determine your strategy, there are fewer moving parts. You can build a diversified strategy with a long history of delivering what you need, while taking sensible steps to reduce tax exposure where available. Tax avoidance is nice. Liquidity, predictability and reaching your goals? Nicer.
Yahoo
3 days ago
- Business
- Yahoo
What the Israel-Iran Conflict Means for Sector ETFs
ETFs tracking energy, aerospace, and defense stocks have wiped out initial losses following the onset of the conflict between Iran and Israel, instead climbing to new highs amid speculation that a prolonged conflict might drive up oil prices and fuel demand for weapons. The attacks and Iran's retaliatory strikes, which also sent shock waves through Israeli-focused funds and broader markets, have far-reaching implications, with gains and losses expected to amplify the market turmoil of the first half of 2025. Still, some experts maintain that holding is the best strategy and that diversification will continue to keep portfolios afloat, particularly since US Treasury yields have actually risen. 'This just adds to the chaos we've already had this year,' said Sonu Varghese, a global macro strategist at Carson Group. 'How we're talking to advisors is, 'Diversification may not have worked for the last 10, 15 years, but it's really showing its colors now.'' READ ALSO: BlackRock Dumps 14 Funds, Many Being Sustainable Products and Fidelity, Franklin Prep Solana ETFs with Staking The iShares MSCI Israel ETF (EIS) — which tracks an index of Israeli firms, including its major banks, and has $272 million in assets under management — fell from $86 to $82 a share Friday afternoon, per NYSE Arca data, but has since rebounded to a high of $86.70. The ARK Israel Innovative Technology ETF (IZRL), which also tracks Israeli companies, saw a similar dip Friday but is now up to a high of $25 a share. Other sector ETFs whipsawing in the aftermath include: The United States Oil Fund LP ETF (USO), which gained 12.4% last week and is now up 5.3% YTD, reflecting the potential for a longer-term spike in crude oil prices if shipping routes — primarily the Strait of Hormuz — are disrupted. The Breakwave Tanker Shipping ETF (BWET), which tracks crude oil tanker freight rates, jumped 11% Friday and has remained elevated as shipping stocks surge. Back Away, Bonds: In the wake of the strikes, investors have flocked to so-called safe haven ETFs like those tracking the Japanese yen and the long end of the yield curve (such as bonds with a maturity of more than 20 years). However, a properly diversified portfolio doesn't just rely on bonds to diversify from stocks, Varghese said, but includes things like gold and managed futures. 'There's a bull case and the bear case, and that's directly being reflected in our portfolios,' Varghese said. 'I'm not saying this was exactly predictable, but our portfolios have been positioned to account for the fact that bonds may not be the best diversifier going forward.' This post first appeared on The Daily Upside. To receive exclusive news and analysis of the rapidly evolving ETF landscape, built for advisors and capital allocators, subscribe to our free ETF Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Scotsman
4 days ago
- Politics
- Scotsman
'Pathetic': SNP Government told 'little will change' as new school violence guidance branded 'woeful'
Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... The SNP's new guidance on tackling classroom violence has been dismissed as 'pathetic', with a leading teaching union warning 'little will change'. Education Secretary Jenny Gilruth on Tuesday published the Scottish Government's long-awaited national guidance on how to tackle escalating levels of bad behaviour and classroom violence post-pandemic. Advertisement Hide Ad Advertisement Hide Ad The document, called 'Fostering a positive, inclusive and safe school environment guidance', lists various examples of bad behaviour, along with suggestions on what teachers and support staff should do about it. The document aims to tackle rising levels of violence in Scottish schools. However, the Educational Institute of Scotland (EIS) has warned the new guidance will have little impact on the day-to-day reality for teachers unless it is backed up with more government money. Among the consequences the document suggests for teachers is asking the child to move to a different seat, giving the pupil an alternative activity from the rest of the class, asking the child to take a break from the class, and speaking to the child's parents. Advertisement Hide Ad Advertisement Hide Ad More serious bad behaviour could be addressed by restricting the child's access to certain areas of the school during lunch, the guidance suggests, and the pupil being given 'reflective time' to consider the impact of their behaviour on others. Other suggested actions include being allowed 'out of class two minutes early so they move through corridors while largely empty', and having conversations on what could have been done differently. For the most violent children, teachers are being told to consider giving the child a 'laminated set of bullet points, for example to remind and support them to step away, seek help and follow an agreed and rehearsed process'. While the guidance says teachers can consider excluding the most badly behaved children, Ms Gilruth said this should only be used as a last resort. The government guidance also reminds teachers and school staff that children may be badly behaved because they are 'showing off to friends', they want 'to gain attention', are not able to 'manage big emotions', or may 'accidentally knock into others without realising the impact'. Advertisement Hide Ad Advertisement Hide Ad Andrea Bradley, general secretary of the EIS, said: 'While welcoming the intent to address the issue, the EIS has been clear that policies alone will not address the serious issue of violence and aggression we are seeing in schools across Scotland unless they are accompanied by additional funding and dedicated investment in education.' Andrea Bradley, EIS general secretary. | Andrew Milligan/Press Association She added: 'These are sound educational approaches, but teachers have been clear that they need time and space and resources to implement them. We need smaller class sizes, reduced class contact time and investment in ASL [additional support for learning] to tackle violence and aggression in our schools. 'The reality is that, unless the guidance is matched by investment, little will change. We need more than carefully considered words to make a difference. We need investment and we need more resources, including more teachers and support staff in our schools.' However, Ms Gilruth dismissed concerns there was nothing new in this guidance for teachers. Advertisement Hide Ad Advertisement Hide Ad Speaking to The Scotsman at St Brendan's Primary School in Motherwell, she said: 'I think there is - I think we need to remember the reason we've published this national update in relation to the use of consequences is because the teaching profession has been really clear with me that they felt we were not as robust as we could have been. Education Secretary Jenny Gilruth | Press Association 'You're right - much of what's in the document will be familiar to schools. But I think we should set out at national level the expectations. The final thing I would say is for the most extreme examples of behaviour, exclusion does exist as a last resort and teachers have to use their professional judgement to apply it.' The EIS said it agreed exclusion 'should be used judiciously' because of the long-term impacts it could have on a child. Ms Gilruth said: 'I accept there are challenges in our schools post-pandemic. One of the really striking and challenging parts of our research is that some of the most deregulated and challenging behaviour now presents in primary four, so you are talking about some of our youngest children. The way we respond to that has got to be different. Advertisement Hide Ad Advertisement Hide Ad 'The national guidance today talks about relationships very clearly and talks about restorative approaches. It's about building relationships with mums and dads, fostering a clear and consistent approach to behaviour, and talking about events where things have gone wrong.' Inside Holyrood, the new document has been widely criticised as 'waffle'. Miles Briggs, the Scottish Conservatives' education spokesman, said: 'This SNP-issued guidance is a pathetic response to the epidemic of violence in Scottish classrooms. Miles Briggs MSP | screenshot 'Teachers are still being given no clear rules on when and how they can exclude violent or disruptive pupils. Jenny Gilruth only mentions it as a last resort. Advertisement Hide Ad Advertisement Hide Ad 'Instead, teachers are being fed waffle about eye-contact, hand signals and merits. These are utterly insufficient for dealing with the extreme behaviour that we've seen recently in classrooms up and down the country. 'Rather than clear rules, this document is full of Holyrood blob buzzwords about multi-agency processes, positivity and inclusion.' He said teachers, school staff and pupils 'deserve better' than this 'woeful response to the collapse in discipline'. Pam Duncan-Glancy, Scottish Labour's education spokeswoman, said: 'Teachers and staff in schools will not feel reassured by a laminated list of bullet points when they are having to deal with violent incidents involving pupils. Advertisement Hide Ad Advertisement Hide Ad Labour MSP Pam Duncan-Glancy. | POOL/AFP via Getty Images 'While any measures that can effectively tackle disruption in classrooms is welcome, parents will be sceptical of the approach being taken if this is the best that SNP ministers can come up with.
The Herald Scotland
4 days ago
- Politics
- The Herald Scotland
ScotGov warned that words won't solve school behaviour crisis
EIS General Secretary Andrea Bradley said that the government must provide more than 'carefully considered words' as she demanded greater investment and increased resources, insisting that 'policies alone' will not be enough. During a recent appearance at the EIS AGM, education secretary Jenny Gilruth was challenged on the issue of violence in schools, with one delegate asking if it would take a teacher being murdered in their classroom to force the government take 'real action'. Ms Gilruth was also heckled with cries of 'nothing is being done' when she said that violence in schools is unacceptable. In her ministerial foreword to the latest publication, Ms Gilruth points to the Covid pandemic and the cost of living crisis, arguing that their impacts on society mean that it is 'unsurprising that the structured demands of the school day have been challenging for some pupils.' She goes on to admit that 'schools and teachers must be better supported to tackle disruptive behaviour'. The new guidance document sets out a number of 'key messages' which include a focus on children's rights and the need for 'early intervention and prevention.' It describes the concept of consequences as 'an important tool to help reinforce boundaries and expectations' and says that the term 'refers to the actions or interventions implemented in response to a child or young person's behaviour.' The use of exclusion is also discussed, with the guidance stating that it can be used 'a last resort, where this approach is proportionate and there is no appropriate alternative.' The document includes an appendix which lists examples of negative pupil behaviour alongside possible explanations for these actions (described as 'underlying needs and functions of behaviour') and examples of the types of responses that might be appropriate. For example, if a pupil is engaging in 'unsafe, anti-social, or otherwise unacceptable behaviour, including shouting, abusive or potentially physical behaviour during breaks or period changes', teachers are encouraged to consider if the child may be 'showing off to friends to gain authority/acceptance/status' or 'not yet developmentally able to understand and manage big emotions.' The possibility that they may simply be 'an excitable child' is also noted, with teachers told that they 'may accidentally knock into others without realising the impact.' Possible responses include 'restricted access to corridors', engaging in a reflective exercise, or being permitted to leave class earlier than peers. READ MORE In addition to the document exploring guidance around consequences, the government has also issued non-statutory guidance to schools and councils on risk assessing violent, aggressive and dangerous behaviour from pupils. Commenting for the EIS, General Secretary Andrea Bradley said: 'While welcoming the intent to address the issue, the EIS has been clear in relation to both the national behaviour action plan and the Consequences guidance that policies alone will not address the serious issue of violence and aggression we are seeing in schools across Scotland unless they are accompanied by additional funding and dedicated investment in education. There need to be a range of interventions, underpinned by resources, which can be adopted to ensure that everyone is safe in school – pupils, teachers and school staff.' 'We cannot ignore the educational and wellbeing impacts of behaviour which gives rise to significant disruption and health and safety concerns. So, there does need to be a set of escalating consequences available to respond to this, up to and including exclusion. The EIS would, however, say that exclusion should be used judiciously. We are aware of the long-term impact of exclusion and time should be taken to plan for effective interventions which will look at fully re-engaging the young person in education, addressing the underlying causes of the behaviour and making plans to minimise the risk of recurrence, with health and safety always being a prime consideration.' Ms Bradley explained that the guidance issued by the government in fact reflects existing policy by promoting approaches involving early intervention and restorative practice, and that issuing new documentation is not likely to change the reality in classrooms across the country: 'These are sound educational approaches but teachers have been clear that they need time and space and resources to implement them – we need smaller class sizes, reduced class contact time and investment in ASL to tackle the violence and aggression in our schools. 'The reality is that, unless the guidance is matched by investment, little will change. We need more than carefully considered words to make a difference, we need investment, and we need more resources -including more teachers and support staff in our schools.' The EIS is currently holding a consultative ballot for industrial action over class contact time in Scotland. The most recent SNP manifesto promised that this would be reduced by 30 minutes per week but no progress has been made towards achieving that goal, which is not expected to be delivered before the next Holyrood election. Earlier SNP manifestos pledged to reduce class sizes. The Scottish Government is also attempting to restore teacher numbers to 2023 levels through the use of targeted funding, but has faced pushback from a number of councils. Speaking during a visit to a primary school to launch the guidance document, Jenny Gilruth said: 'The majority of children and young people behave well in school, but where someone needs support with their behaviour, it is important that schools can respond in ways that are appropriate, supportive and respond to the needs of each individual child. Evidence clearly shows young people need structure and boundaries to support their development and having predictable consequences helps them to feel safe. 'Responding to behaviour in our schools requires all members of the school community – staff, children and young people and parents and carers – to work together to identify the values that underpin school life, how this translates into expectations of behaviour, and to support appropriate responses. We want to create a strong partnership between home and school to help create a consistent, supportive environment where children feel safe, respected, and are better able to learn and thrive. 'This guidance takes account of the concerns about behaviour I have heard from teachers, support staff and teaching unions, and will be an important tool in ensuring that they are properly supported in our schools.'
Yahoo
5 days ago
- Business
- Yahoo
Stock ETFs Up, Oil Down as Israel-Iran Fight Looks Contained
Broad equity ETFs like the Vanguard S&P 500 ETF (VOO) rose amid signs that missile fire between Israel and Iran, which hammered markets last week, won't expand into a wider regional conflict as feared. Oil funds dropped after last week's jump. VOO and the SPDR Dow Jones Industrial Average ETF Trust (DIA) added 1.1% around noon. Both dropped Friday following Israel's bombardment aimed at crippling Iran's nuclear-enrichment capabilities. Crude oil prices fell after a previous surge as fighting entered a fourth day, and the United States Oil Fund LP (USO) declined 3.5%. USO Net Fund Flows—Source: FactSet Fears of the war spreading beyond Iran and Israel appeared to modulate, as the Wall Street Journal reported Iran has reached out to Arab officials and told them it wishes to end the fighting and resume nuclear disarmament talks. Israel, which began bombing Iran after the Persian nation vowed to continue enriching uranium following its censure by the International Atomic Energy Agency, has said the attacks may continue for many more days. Defense ETFs advanced, with the iShares U.S. Aerospace & Defense ETF (ITA) adding 0.3% and the Select STOXX Europe Aerospace & Defense ETF (EUAD) jumping 1%. Tech ETFs rebounded, with the Invesco QQQ Trust (QQQ) rising 1.4% and the VanEck Semiconductor ETF (SMH) adding 2.8%. Shipping rates rose further, Reuters reported, on concerns the violence will force tankers out of the critical Strait of Hormuz shipping lane and into longer routes. The Breakwave Tanker Shipping ETF (BWET), which tracks futures contracts in the crude-oil-shipping market, soared for a second day, adding nearly 17% at Monday's high before cooling off. Israel ETFs reversed Friday's declines. The iShares MSCI Israel ETF (EIS) jumped 5.9%, and the ARK Israel Innovative Technology ETF (IZRL) rose 3.9%. Investors pulled a net $4.2 million from EIS Friday. Both the iShares 20+ Year Treasury Bond ETF (TLT) and the iShares 7-10 Year Treasury Bond ETF (IEF) dipped | © Copyright 2025 All rights reserved
