Exiting Directors – Lifetime Tax Planning

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Planning for your future

This means evaluating your current assets and tax position, and helping you understand the strategies open to you to optimise your position.

In doing so, we consider our position with regards to income Tax, Capital Gains Tax, and Inheritance Tax.

Exiting Directors – Lifetime Tax Planning Case Study

The problem:

Client LB and their co-directors sold their business for a sizeable sum. They were worried about the all-around tax consequences:

The solution:

Engaging TFM for an integrated financial review and discussing future goals, TFM was able to assist in planning for replacement income via a combination of pension funding and non-pension investments to create a balance between tax efficiency and liquidity.

  • The firm was also able to help the client visualise how the change in the nature of their assets affected their inherited tax position, as their shares previously qualified for Business Relief for Inheritance Tax (IHT), but the sale proceeds do not.
  • As part of the overall strategy, capital was allocated to IHT-efficient investments in order to preserve a legacy whilst offering control of, and access to the capital, without giving it away into trust.

“We had recently sold our business and I was looking for some financial advice regarding pensions, investments and savings.

By introducing tax efficient investments and investment ISA’s, consolidating several pensions I had into one fund and providing safe, low risk investment opportunities for the funds that I was looking to utilise.

Despite the volatility of the stock market we have been very pleased with the progress to date of the various investments. The tax benefits of the VCT and EIS investments certainly helped to mitigate the capital tax charges following the sale of the business.”

Client from Essex

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