Richard and Clare Hill own their own business. After years of building their business, they are considering an exit, but they don’t have a firm timeline.
They have received an offer, but they don’t understand the logistics. Like many business owners, most of their wealth is tied up in the company and what they do now will shape their retirement.
We worked closely with Richard and Clare, alongside their accountant and solicitor, to build a clear financial roadmap.
Cashflow planning allowed us to test multiple scenarios, illustrating; the full offer being paid, no earn-out being achieved, and only the initial payment being recevied. We explored utilising different strategies, assessing any potential Inheritance Tax (IHT) following the sale.
We provided the couple with clarity on the minimum sale value required, how to structure assets post-sale and how to protect their legacy.
We continue to work with Richard and Clare to review their plans regularly. Exit planning is no longer a one-off event, it’s an ongoing process. They can now focus on running their business confidently, knowing their long-term future is mapped out.
If Richard and Clare exited their business without structured planning, this could have meant they:
Without clarity, even a large sale can create uncertainty rather than freedom.
Phil and Jo are considering retirement. They have multiple pensions but are unsure how they work, how to access them, or if they have enough funds to sustain their lifestyle.
We took the time to get to know them, their goals and their expectations. We were able to review their situation, and we started by looking at what expenditure they expected to have during retirement.
Taking into account their assets outside of their pensions, we performed in-depth cashflow planning to determine the level of income required to sustain their current lifestyle and whether an earlier retirement was possible for them.
We proposed restructuring their pensions and investment portfolios, to provide a flexible income in a tax-efficient manner. Our proposed plans were not only invested in line with their attitude to risk, they also incurred less charges.
We created an ongoing strategy for Phil and Jo to ensure they had sufficient income for their retirement. The recommendations were clearly explained, resulting in them both understanding their financial situation and feeling in control.
With the in-depth cashflow planning provided by IFP, Phil and Jo have had the confidence to retire 3 years earlier than they expected.
With ongoing review meetings, we can ensure that their pensions and investments remain on track to meet their goals, taking into account any further changes to their circumstances.
Eddie is a 68 year old widow, with two children. He just downsized his property and now has increased cash savings.
Eddie’s estate is made up of his home, savings, investments and pension and is worth £2,800,000.
Due to the value of his estate, Eddie does not qualify for the Residence Nil Rate Band, so the maximum amount he can pass on to his family free from IHT* is £650,000.
Eddie is concerned about the large IHT bill he faces.
We used a combination of tax efficent methods to gift £325,000 to his children.
IFP also recommended that £500,000 be put into a Business Relief qualifying investment, reducing the tax on this proportion from 40% to 0%.
|
Timing Stage |
Taxable Estate |
NRB* |
RNRB* |
IHT* Payable** |
|
Before Planning |
£2,800,000 |
£650,000 |
£0 |
£860,000 |
|
Immediately After Planning |
£2,800,000 |
£650,000 |
£112,500 |
£815,000 |
|
After 2 Years |
£2,300,000 |
£650,000 |
£350,000 |
£520,000 |
|
After 7 Years |
£1,975,000 |
£650,000 |
£350,000 |
£390,000 |
John runs a family farm, passed down from his father, alongside his wife, Gill. They wish to leave the farm to their son and daughter, who work alongside them.
Due to recent changes, when John and Gill die, their children will be subject to an Inheritance Tax (IHT) bill of £1,200,000.
IFP worked with the family to determine their goals for the farm and how this legacy should be structured to mitigate IHT.
We worked alongside the family’s accountants and solicitors to ensure all allowances were used correctly and their Wills were structured in the right way to benefit from the maximum agricultural relief available.
Gifts of shares within the farm business were also made. After 7 years, the value of these are not included in John and Gill’s estate.
John and his family continue to work with IFP, their accountants and solicitors, to ensure the farm legacy is preserved for the future and is adaptable for any future changes implemented by the Government.
With IFP’s advice and the family’s work, their IHT liability will reduce after 7 years by £400,000.
In addition, the family took out a Whole of Life insurance policy, to provide their son and daughter with the funds they need to pay the remaining IHT bill.
With help from their accountants, additional income was withdrawn from the farm business to cover the payments for this policy.
When John and Gill die, the farm can pass to their children with reduced financial impact.
Whilst there will be an IHT bill to settle, the funds produced from their insurance policy will cover this liability, enabling the farm to continue running successfully without a long-term debt hanging over it.
Iris is facing a gap between her monthly care costs and her income. She has been meeting the shortfall using her savings, but Iris and her family are concerned about her depleting capital and the possibility of having to move to another care home.
Iris loves the care home she is in, but if her personal funds run out, the local authority may step in.
Iris currently has an annual shortfall of almost £27,000. After sitting down with Iris and her family, and working closely with the care home, we recommended a solution.
Informed Financial Planning implemented a long term care annuity for Iris, providing her with sufficient income to cover her needs.
This gave Iris the reassurance that she can stay in the right place for the long term, and that her savings can now be used as a small legacy.
Iris and her family continue to work with IFP, to ensure that her savings are now working to achieve her other goals, such as leaving a legacy to her family.
If the local authority had to step in, this could have meant that Iris would:
