Client Case Studies

Mr M was retiring from the UAE and moving back to the UK. Over the years he had built up a significant property portfolio, and his plan was to rent the properties out and use them as income. This is a common plan for many people however, as highlighted to Mr M, this has some significant drawbacks.

Firstly, all rental income is subject to income tax at the individuals highest marginal rate of income tax, in his case this was 45%. Secondly, Property is the most difficult asset class to protect from Inheritance Tax. Mr M had a significant Inheritance Tax liability, of over GBP 2,000,000.

We recommended that Mr M sell his properties, and use the money to fund a Discounted Gift Trust, in which he could leave the assets to his daughter. This allowed the assets to be invested creating growth and income so that Mr M could take a monthly income from his trust fund, which had no income tax for at least 20 years, a huge difference to the 45% that he was currently paying, and secondly the net position over time as the majority of his wealth was outside of his estate for inheritance tax purposes.

Not only have we saved the client over GBP 2,000,000 in inheritance tax, but also over GBP 36,000 per annum in income tax.

Mr O came to us with a need to save for his children’s education. He explained to us that he is quite a low risk investor and would like something that is less volatile and more guaranteed. He told us that he had USD 500,000 to use now, and a further USD 250,000 per annum which he could set aside.

We set up a policy for him that would give him approximately USD1m for each one of his four children in time for their university fees. Utilising our international product offering we created an international structure which provides an element of guaranteed returns and used leverage to create the level of returns the client needed.

We created enough space within his budget where even if interest rates quadrupled, the client would be able to comfortably manage the payments. By using leverage the client had much more money than the USD 500,000 invested from day one.

Furthermore the investment did not fluctuate depending on market movements giving the client peace of mind that he would reach his goal of having USD 1M available for each of his children for university.

Mr J came to us with a requirement for liquidity for his business. He was looking to create lines of credit but needed Key Persons Insurance in order to do so. We did an analysis and worked out he needed USD 8M in Life cover in order to proceed with the lines of credit needed.

We created a policy using local insurers where he as the life assured was protected for liability if anything untoward was to happen to him. This allowed the client to significantly increase the growth of his business.

Mrs J had recently lost her husband in a tragic accident. She received a USD 2M lump sum from his life insurance policy. Mrs J was not very knowledgeable about finances, as her husband had always dealt with everything.

Mrs J has 2 children that are going through secondary school and will be going to university in the next couple of years. She needed to create an income solution that could last her a life time, and so that she could support her children through their studies.

We created a Private Placement Life Insurance policy using a tax efficient structure which she could access upon moving back to South Africa. The money which was invested gave her the ability to take a monthly income, tax efficiently.

This also meant that this wealth was now outside her estate for inheritance tax purposes. We did this in a low risk environment and approached everything in a very slow, concise and diligent manner.

She now has a secure fixed income for life, and doesn’t have to worry about her finances going forward.