Our Case Studies
Protecting a Legacy Without Letting Go of Control
The Situation —
Passing Wealth Efficiently
By the time this client came to us, he had built up significant wealth over a long career as a senior executive at a FTSE 100 company. A large part of that wealth was tied up in a single company share, and his estate had grown well beyond £2.7 million. The result was a materially increased inheritance tax bill and the complete loss of his Residence Nil Rate Band, an allowance worth up to £175,000 that gradually disappears once an estate passes £2 million.
He had two children, a clear wish to pass on what he had built, and an equally clear wish to stay in control of how and when that happened. He did not want to simply hand assets away. He wanted a plan.
The Solutions —
A Structured, Phased Approach to Wealth Transfer
Before anything else, we modelled his long-term financial position in full. The priority was making sure any planning would not put his own security at risk. Once that confidence was established, we could move forward.
The cornerstone of the strategy was the creation of two discretionary trusts, funded jointly by the client and his wife. This allowed them to begin moving wealth out of their estates in a controlled way, making meaningful gifts while retaining full oversight of how the funds would be invested and when the children would ultimately benefit.
Transferring capital into trust did two things at once. It began reducing the taxable estate, and it froze the inheritance tax liability on those assets from that point forward. It also gave us the opportunity to move away from the concentrated single company exposure and into a diversified global investment portfolio, improving both the tax position and the overall risk profile.
Within the trusts, we used onshore bonds to provide further tax efficiency and flexibility. For one child who needed ongoing support, we structured a regular monthly income through tax-efficient withdrawals. For the other, the focus was entirely on long-term growth, with the investment strategy built around a future house purchase once the seven year period had passed and the funds had fallen fully outside the estate.
The Results —
£200,000 Saved and a Clear Path Forward
The initial planning alone is expected to deliver an inheritance tax saving of approximately £200,000, with the potential for significantly greater savings as the investments grow and further planning is put in place.
Beyond the numbers, the client now has something equally valuable. Certainty. His estate is better diversified, his children are provided for in a way that reflects their individual needs, and the pathway to reinstating his inheritance tax allowances is clear. He gave away nothing he was not ready to give, and he kept control throughout.
Disclaimer: These case studies are provided for illustrative purposes only. They are based on typical financial planning scenarios and modelling undertaken as part of our advice process. While inspired by real client situations, details have been anonymised and, where appropriate, adapted or combined to protect confidentiality. They should not be regarded as actual client outcomes or as a guarantee of future results. Individual circumstances, tax treatment and investment performance will vary.
