Mortgage advisers play the name game

I bought a mortgage endowment policy in 1985 and recently complained to the financial adviser about mis-selling.

Their reply said they had no record that they had advised on my policy and assumed it was sold through a company with an identical name but with 'Ltd' on the end, which was a non-trading company and, they said, had no relationship with them. The person who wrote the letter was the same man who was a director of the first company. Are they pulling a fast one?
DS, London

Bizarre that they should use this convoluted excuse not to follow through your complaint. They could justifiably have refused by pointing out that you bought the insurance policy before the Financial Services Act came into force, in April 1988. Until the Act, advisers could not be forced to investigate complaints and they still can't for investments they sold before April 1988, although many would do so, in keeping with the spirit of the new legislation.

The Act introduced a strict complaints procedure, which means that they must now be handled properly; if this doesn't happen, you can take the matter to the Financial Ombudsman ser vice. But it is still possible, in some circumstances, for individuals to close down one firm and start another without bearing responsibility for what happened in the old company.

Missing date meant narrow escape - with interest

A year ago, I paid ?21,000 into a Legal & General
stakeholder pension. On returning from holiday in
August, a letter from Legal & General explained
that I hadn't dated my original application and, if I
didn't date and sign the attached photocopy
within 10 days of the letter, they would have to
return my funds. It was already two days after the
deadline.

My irritation was reversed when I saw that my
chosen European Index fund had dropped 20 per
cent since January, so I didn't return the copy.

After writing and phoning, I finally received a
cheque for ?21,000 exactly a year after I paid it
over. Am I entitled to interest on this, at least from
August when the account was cancelled?
WW, London

Fair dos, says Legal & General. It is sending you a
cheque for ?509, which is interest on your ?21,000 for
the past 12 months.

Tax worries on mother's estate

My mother's estate consists of a house worth about £275,000 plus a few hundred pounds in her bank account. My brother and I are her sole beneficiaries, with the provision that, after my mother's death, her carer be allowed to live in the house rent-free for as long as she chooses.

What inheritance tax would my mother's estate have to pay, and when? If the carer leaves the house or dies and we sell the house, would my brother and I have to pay capital gains tax and, if so, how would this be calculated?
JJ, Worthing

If your mother died in this tax year, she could leave up to £250,000 worth of assets before any inheritance tax is due. Her assets include everything she owns, not just the house and what's in her bank account. So, if her estate totalled £285,000, it would pay £14,000 tax (40 per cent on £35,000).

You and your brother will own your mother's house from the date of her death, even though her carer still lives there.

You face capital gains tax whenever you sell the house, based on any increase in value between the day you inherit and the day you sell. Of course, if you sold immediately, the price would be about the same so there would be no profit on which to pay tax. This tax year, you and your brother can make gains of £7,700 each so, if you had no gains from any other sources, you could make a profit on the house of £15,400 without paying tax.

Slow payout on unit trusts

On 31 December, my wife and I wrote to Invesco Perpetual and Artemis Fund Managers to sell the unit trusts we held in each. On 7 January, we received a cheque from Invesco, but a letter from Artemis saying the amount would be paid shortly after the settlement date, although no date was given.

We phoned and were told that payment would be made three working days after a Friday. We queried the delay and Artemis said it was not a stockbroker and 'it does take time'. So Artemis is keeping clients' cash for an extra eight days. A nice little earner.
PS, Peterborough

Artemis says your money arrived within the timescale set down in its terms. It takes longer than Invesco because its administration is done by an outside firm.

Your letter was logged in at 13.50 on Friday 3 January, missing that day's valuation point, at noon, so you had to wait until the next valuation on Monday 6 January. Your money was sent the following Friday by Bacs straight into your account, which means at least you did not have to bank a cheque and wait for the funds to clear.

Case of the phantom £25

My partner has an account with Royal Bank of Scotland and she noticed a £25 automatic payment into her account in September from my account with NatWest. But I had closed this account in August and have never instituted a payment for that amount even when it was open.

My local NatWest branch confirmed that their computers no longer acknowledged mine or the account's existence. To quote the under-manager: 'These payments are impossible.' But they continue each month. Obviously she doesn't mind receiving £25 a month from nowhere, but what does this say about the banking system?
DH, Alderley Edge

After we tracked the route of this phantom payment, it said that the banking system works. While you had never set up a £25 standing order, your partner had, as her contribution towards household bills.

When you closed your NatWest account, the payment had nowhere to go and so it was bounced back into her account. All along, this was her own money coming home.

When you switched accounts, you should have warned her to tell Royal Bank of Scotland to send the payments to the new account.

· Email Margaret Dibben at money.writes@observer.co.uk or write to Margaret Dibben, Money Writes, The Observer, 119 Farringdon Road, London EC1R 3ER and include a telephone number. Do not enclose SAEs or original documents. Letters are selected for publication and we cannot give personal replies. The newspaper accepts no legal responsibility for advice.