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We recently provided wealth planning advice to a family spanning three generations, comprising of a couple, their three children and six grandchildren.

Following the death of a family member, the couple were bequeathed a cash lump sum. They wanted to invest this in a tax-efficient way to benefit not only themselves, but also their children and grandchildren.

After meeting with one of our wealth planners to understand their objectives and discuss the family’s needs in more detail, we recommended a wealth structuring solution to be held jointly by the couple.

The couple are able to withdraw up to 5% of the amount originally invested each year without any immediate tax liability. This withdrawal allowance is cumulative – so if they choose not to draw 5% in the first year, they could then draw up to 10% in the second year.

The underlying investment portfolio held within the structure is managed on a discretionary basis by one of UBP’ investment managers in line with the clients’ attitude to risk. As the solution is tax efficient, the portfolio can grow free of capital gains tax.

The solution can then be split or passed over gradually to their children and grandchildren using segmentation. The gifted segments can either remain invested within the structure or encashed. Tax paid on the encashment will be at the tax rate of the new owner, which in the case of the grandchildren is a much lower rate. 

Any services and investments may have tax consequences and it is important to note that UBP UK Limited does not provide tax advice. The level of taxation depends on individual circumstances and such levels and bases of taxation can change. You should seek professional tax advice to understand any applicable tax consequences.

We were approached by a successful entrepreneur in her mid-40s, who had spent the past ten years building a lucrative brand agency.

Before starting her business, the client was employed by a marketing firm where she and her employer contributed to a workplace pension. She had also established a cash ISA, which she invested in regularly using her annual bonus.

Since resigning from her job and starting her business, the client had not contributed to or reviewed her pension or ISA. When initially starting her business, she did not have the disposable income to make such contributions. As her firm has grown and become more successful in recent years, she has not had the time to examine her personal finances.

The client met with one of our wealth planners to review her circumstances, with a particular focus on growing her wealth by using tax efficient structures.

We reviewed her existing pension and ISA and found the pension offered a limited range of investments and income drawdown options at retirement, whilst the cash ISA only generated a small amount of interest.

We advised establishing a Self-Invested Personal Pension (SIPP) where the client could benefit from a diverse investment portfolio managed on a discretionary basis by one of our investment managers. Upon retirement, the SIPP also offers greater flexibility as to how she can draw from her pension. We calculated the client’s unused pension contribution allowance and, taking affordability into account, advised an appropriate amount she could contribute to the SIPP – both as an initial lump sum and on an ongoing basis.

We also advised establishing a stocks and shares ISA, which would be managed by one of our investment managers in line with the client’s attitude to investment risk. We calculated that she could afford to utilise her full ISA allowance in the current and forthcoming tax years.

The underlying investment portfolios in both the SIPP and ISA are unencumbered by capital gains and income tax.

Any services and investments may have tax consequences and it is important to note that UBP UK Limited does not provide tax advice. The level of taxation depends on individual circumstances and such levels and bases of taxation can change. You should seek professional tax advice to understand any applicable tax consequences.

A couple in their late 40s were referred to UBP UK Limited by their mortgage broker, seeking a loan to purchase a new family home.  They have two children aged 17 and 19 who are in full time education, live at home and are financially dependent.

The couple were approved for a five year term mortgage at a fixed rate. When analysing their personal finances as part of the mortgage application, the clients voiced anxiety about their dependency on their combined income to sustain their lifestyle. What would happen in the event of adverse personal circumstances, such as death or serious illness?

The couple had in depth discussions with our wealth planning expert, who helped quantify the extent of the risk to which they were exposed. As one client has severe asthma, they expressed concern as to the cost of premiums to provide adequate life cover.

Our wealth planner considered a large number of insurers and secured a policy which would repay their mortgage if either client were to die. Two separate critical illness policies were also recommended that would pay a lump sum in the event of a diagnosis of any common critical illness.

Any services and investments may have tax consequences and it is important to note that UBP UK Limited does not provide tax advice. The level of taxation depends on individual circumstances and such levels and bases of taxation can change. You should seek professional tax advice to understand any applicable tax consequences.

When people come to us to talk about their plans for retiring, they often wonder whether they will have enough money to support their lifestyle once they reach this stage of life.

A couple who are long standing clients asked us to assess their financial position in advance of their retirement. Specifically, they wanted to travel extensively during the first stages of their retirement and understand how much they could afford to spend per year during this period. They sought to develop the most tax efficient approach to taking an income from their assets, which included buy-to-let properties as well as various investment portfolios. Equally important was ensuring they could afford any potential care costs later in retirement.

We built a detailed cash flow model taking account of inflation, potential investment returns and cash liabilities. This gave the clients a clear view of their financial position, as well as how much they could spend during each stage of their retirement. We recommended a tax efficient withdrawal strategy to draw income in the most effective way. Amalgamating one client’s pension funds into a Self-Invested Personal Pension (SIPP) helped ensure the fund was managed in line with their personal investment objectives.  Our wealth planners also explained their pension lifetime allowance and what would happen when they reached 75.

This retirement plan will be revisited on an ongoing basis to adapt to any changes in personal circumstances, legislation, inflation or investment returns.

Any services and investments may have tax consequences and it is important to note that UBP UK Limited does not provide tax advice. The level of taxation depends on individual circumstances and such levels and bases of taxation can change. You should seek professional tax advice to understand any applicable tax consequences.

A couple was introduced to UBP UK Limited by their accountant in order to receive professional advice as to how best to structure the proceeds of the sale of their business.

They have two children and four grandchildren and had always envisaged their business and its legacy to be for the benefit of future generations. However, they were also now seeking a replacement income stream.

We advised they establish a discounted gift trust whereby they invest a lump sum to provide a pre-determined level of income for the rest of their lives. A proportion of this investment would be immediately outside of their estate for the purposes of inheritance tax and the remainder would be outside of their estate after a period of seven years.  The underlying investments would be managed by a UBP UK investment manager on a discretionary basis in line with their attitude to investment risk.

The clients appointed their children and grandchildren as beneficiaries of the discounted gift trust and upon the clients’ death, the children and grandchildren would become direct owners of the investments. These beneficiaries would then have the option to leave their inheritance invested, whereby it could continue to grow without incurring capital gains tax.

Any services and investments may have tax consequences and it is important to note that UBP UK Limited does not provide tax advice. The level of taxation depends on individual circumstances and such levels and bases of taxation can change. You should seek professional tax advice to understand any applicable tax consequences.