Finance Together

case studies

Wealth preservation

The financial details

Pension income –  £13,000 per annum

Total assets –  £650,000; £250,000 in cash, £400,000 invested

The personal details

  • Single lady, age 84
  • Inherits a large amount money
  • Doesn’t really understand financial matters, found having so much money a burden
  • Very risk averse
  • Keen to utilise capital to generate additional income
  • Wanted to pass on assets, worried about inheritance tax implications

Our solution

  • In conjunction with our client’s solicitor, we invested some of the capital into two tax efficient trust arrangements. This immediately reduced the size of the taxable estate
  • Withdrawals from the trust increased our client’s income and not income tax
  • We reduced the level of risk in the investment portfolio in line with our client’s preference for low risk
  • Our client’s solicitor was appointed as trustee to the trust.

The outcome

  • Significant protection from Inheritance Tax
  • The value of the estate will reduce still further over the next seven years reducing Inheritance Tax liability still further
  • Our client’s income was increased by £625 per month, tax efficiently

Our client has the peace of mind that she has a professional team looking after HER interests.

Increasing income in retirement

The financial details

Home – £800,000
Mortgage – £60,000
Investments – £50,000
Pension fund – £650,000
Pension income – £20,000

The personal details

  • Married couple in early retirement
  • Worried about being able to maintain their standard of living
  • Wanted to avoid becoming high rate tax payers
  • Husband worried about his wife’s security in the event of his death

Our solution

  • We restructured our client’s pension plan into a more flexible, progressive arrangement with potentially better investment returns
  • We selected a specialist external investment managers to provide expert fund management and research on an ongoing basis
  • We released tax-free capital to pay off all debts including the mortgage
  • We established a sustainable level of income using the client’s tax allowances.

The outcome

  • Our clients’ are now mortgage and debt free saving on interest payments each month
  • Income was increased by £1,400 per month
  • Maximum flexibility was retained on future access to further income and capital
  • The structure of the plan ensures the wife has full access to the income and capital in the event of her husband’s death
  • The risk and return characteristics of our clients’ investment portfolio has been improved.