Joslin Rhodes
10:12, Tue 21st May 2013

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Case Study Three

 

Background

Mr Professional, Senior Manager age 42 and Mrs Professional, Self Employed Vet with a small practice, age 37 with two young children.

 


Challenges

 

Wanted to plan for children's education

  • They were accumulating wealth but had no structure and were unsure how to fund school fees
  • Savings for Mrs Professional’s income tax liability were in low interest bearing accounts

 

Mrs Professional’s business premises were unsuitable

  • The surgery was cramped and had limited parking
  • The rent was substantial and impacting on profits

 

Insufficient financial protection

  • Lack of Life Insurance meant that if either one of them died, the family's financial future would be jeopardised
  • Mrs Professional had no Income Protection in place

 

What we did

  • Transferred pension to a Self Invested Personal Pension (SIPP) that can invest in commercial property.
  • Changed residential mortgage to an offset mortgage
  • Restructured their investment to make better use of tax-efficient products
  • Designed a portfolio to allow income to be drawn at school term intervals
  • Arranged Life Insurance and Income Protection plans

 

The Results

  • The business was able to buy its own, more suitable, premises and pay rent to the pension
  • The short-term income tax money was used to offset the mortgage, effectively giving a high tax free return
  • Removed the risk that death or sickness would jeopardise the family's financial future
  • A clear strategy helped them work towards their goals in a cohesive manner
  • The relationship with their Adviser gave them long-term comfort in the knowledge that they were on the right track

 

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