Our Case Studies
Our specialist team who advise in retirement planning, investments, estate and tax planning have helped many clients in a number of ways. Here's a few of our case studies based on a few clients we have helped recently.
Widow - High Net Worth Tax and Financial Planning
Initial Situation
A high net worth couple. The wife was sadly widowed at age 49 years with a 9 year old son, working part-time. Her husband passed intestate (without a will). This will lead to significant inheritance tax liability on second death.
How we helped with reducing a widow's IHT burden and ensuring she had financial security
- All assets passed to surviving wife to utilize the IHT spousal exemption
- Husband's pension fund passed to wife and invested in a pension in her name
- Husband's death in service benefits passed to wife and invested in an Offshore Bond
- Whole of Life policy taken out on wife to protect against the IHT liability on her death
- A Will and Lasting Powers of Attorney set up
- Above average investment returns allowed her to retire early.
- A 5% (tax-free) withdrawal is made from her Offshore Bond annually to supplement her income from other sources
- To date, she has not yet had to draw on her private or final salary pension to maintain her current outgoings and lifestyle
- Cashflow modelling confirms that with even below average returns, she has sufficient income to last until age 99 years. She is currently aged 64.
Financial Planning can be quite complex, getting advice can make a significant difference to passing on wealth.
Business Financial & Tax Planning
Initial Situation
A company director with a successful business, was able to make lumpsum and regular contributions into her pension which can be offset against the corporation tax liability.
Our recommendations
- Key person life assurance was paid by the Company and premiums are tax deductible
- Reviewed all pensions, proceeding to consolidation exercise to meet retirement objectives
- The life cover was able to be transferred into the Director's personal name when she retired from the company
- Cash Flow Modelling demonstrated that early retirement at her current lifestyle and expenditure was possible
- To date, it has still not been necessary to drawdown from her pension which has been managed in a tax efficient manner and on death would be IHT exempt as well
- Businesses can use their pensions to fund business expansion or property purchase but this needs careful consideration and planning
Your business can be the means you use to ensure your retirement is a comfortable one. It can often benefit from specialist financial planning advice.
Probate Case Study
An example of how the probate application process can go horribly wrong when personal and financial affairs are not set up correctly.
The main residential property was transferred from the parents to their adult child. Unfortunately this child did not have a Will or seek formal advice as to the financial implications of doing this and the parents continued to live in the same property. The parents although married, were separated.
Implications
- The son died intestate (without having a valid Will), so the rules of intestacy would apply to the distribution of his estate, including the parents house
- The parents did not pay market rent to their son after the transfer was made, exacerbating the IHT situation
- The parents lost the Residential Nil-Rate Band and basic IHT planning tools
- An unnecessary IHT liability arising due to implementation of this transfer without seeking proper advice
- Loss of control of an asset by the parents
It can be really important to have a Will and sadly we often think we need to be older to do so.