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.