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DOMINIC Got more popular they were often abused, the
HMRC shut them down with investors left in a position where they could end up paying
back all the interest tax relief they received along with hefty penalties will often end
up being a terrible investment decision. This coming at the end of their footballing
careers so not earning big money necessary any more, now some of the affected footballers
are complaining about their advice they received at the time
Joining me now is Martin Taylor his head of client relations at rebus in London and they
represent 12 current and former Stars and is trying to get them their money back.
Martin, what sort of schemes we talking about? Gives us an example , they are not sort of
things that normal people would invest in...
MARTIN Good afternoon Dominic Yes, you are absolutely
right.
Unregulated Collective Investment Schemes stretch across a multitude of different assets;
ranging from film, fine wine, property, timber, crops, a number of liquid type investments...
and essentially what you have to look at when you go into these type of investments is the
advice that given, before you enter into these investments.
DOMINIC There's a keyword in the title. The first
one; Unregulated.
MARTIN They're unregulated however the advice is
regulated. So essentially when you enter into these investments they tend to be of a high
risk nature, so quite often what occurs is that the advice given doesn't fully stipulate
the risks involved which were now seeing by way of tax relief, for instance...
DOMINIC Have they fallen apart because the tax relief
was the vital component? that made them a good investment. If the HMRC comes down on
them. Shuts down tax relief. They become a terrible investment?
MARTIN I think that's a very fair reflection however,
we also look it say property investments whereby the individuals of gone into property and
of course the property bubble has burst, and a lot of these investments have high amount
of leveraged from banks, and banks then call in the leveraged because you breach the banking
covenants.
DOMINIC Yeah, but thats just a bad investment. You
know; sorry you pay money take a choice.
MARTIN Of course.
DOMINIC They are lots of buy to let land lords in
exactly the same position.
MARTIN Of course, absolutely, but these tend to be
a gain as an unregulated collective investment schemes so tend to be more of higher risk,
therefore gain with the risks explained i.e. was explained that you could breach banking
covenant.
DOMINIC So you've got some some current premiership
stars some former stars on your books, obviously won't give us the names.
MARTIN Thats correct.
DOMINC Give us one example: call him Joe Bloggs in
this situation
MARTIN I think to make it key here is the advice
that was given at the beginning. A lot of these players entered into these arrangements
when you are earning mega bucks. What occurs is particularly on some schemes as they have
a longtail, and the sting in the tail is after the footballer has retired to quite often
you can have tax liabilities in excess of what they're earning after retirement, so
therefore that leaves them in an incredibly bad position.
DOMINIC Sure, I'm trying to find out what specific
about their circumstances are trying to imply that because they were earning huge amounts
of money in a concentrated period of time you would have kind of; vultures circling
around them giving them bad advice and they were particularly pray to bad advice versus
other people are just a lot of money?
MARTIN Yeah, essentially what you what you're looking
at is the advice that was receiving was fully explained to that individual at that stage
in their career i.e. what was their risk profile these type of investments...
DOMINIC They are often quite young aren't they?
often talking about 21-year-old guy...
MARTIN Of course you are, absolutely, so essentially
we are looking at these total investment should form less than 10% of your overall wealth
because that by the very nature they are high risk investments so therefore was that
taken into consideration
Do you think there are a lot of them just got greedy? and if they are pouring all the
money into high-risk investments is that most people know that a pretty stupid thing to
do. Why didn't they?
I think you rely on the adviser that you have at the time and obviously also they trusted
advisers alongside them, so if an advisor is saying it's a good investment, you or I
might fall into the same categoryif we feel it a good investment then you would rely on
that advice that was given to you at the time.
DOMINIC Martin Taylor at from Ribas thank you very
much thing worth giving a FTSE 100 Peter its 6378 down just .2% of the FTSE