Finance

Preserving Wealth for Future Generations

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Start your estate and inheritance planning as early as possible and implement in stages

The UK Treasury has been receiving record-breaking Inheritance Tax (IHT) receipts. IHT receipts amounted to approximately £7.09 billion in 2022/23, compared with £6.05 billion in the previous financial year.

For individuals and families who have to pay it, IHT can be emotionally challenging, often requiring the sale of cherished family assets to settle the tax bill. That’s why starting estate planning early and implementing it in stages is essential. Also, having an open conversation about estate planning with family members is very beneficial but depends on family dynamics and wealth levels.

Minimise Tax Liabilities

However, families should take proactive measures to minimise the possibility of facing a substantial IHT bill. By planning ahead and seeking professional advice, individuals can ensure their assets are managed to minimise tax liabilities.

Creating a comprehensive wealth strategy involves considering various factors.

Lifetime Cashflow

We can help you assess your assets and income to ensure we support your desired lifestyle throughout your lifetime. By understanding your cash flow needs, we can assist in structuring investments and creating a sustainable financial plan.

Lifetime Gifting

Gifting can be a valuable tool in wealth planning, allowing you to reduce a potential IHT tax burden. We can guide you on the various gifting allowances and exemptions available, such as the annual gifting allowance, wedding gifts and gifts from normal expenditure out of income.

Trusts

Most trusts offer flexibility and control over how your assets are distributed. They can also help reduce taxes on inheritance. This excludes Absolute Trusts, where control over assets is discretionary. Working closely with us, you can explore different trust options and understand how they can be incorporated into your wealth planning strategy.

Pensions

Pensions are important in wealth planning, offering tax advantages and the potential for long-term financial security. We can help you navigate the complexities of pensions, including risk assessment, accessing pension funds and maximising tax benefits.

Protection Cover

Protecting your loved ones in the event of death or illness is crucial. We can advise on selecting the right protection products to provide liquidity for IHT and other associated costs.

Business Relief

Incorporating business relief into your wealth planning strategy can be advantageous if you own a business or have qualifying assets. We’ll help you understand the eligibility criteria and how to leverage this relief effectively.

Financial Control and Estate Planning

Creating a Will ensures that your assets are distributed according to your wishes. Additionally, appointing a Lasting Power of Attorney provides someone with financial control over your assets and peace of mind if you cannot manage your affairs.

Estate planning is not a one-size-fts-all approach. Although there is no requirement to address IHT, proactive planning can minimise the tax burden on families. Seeking professional advice and taking steps early can help reduce the risk of leaving loved ones with a larger tax bill than necessary.

Do you want the peace of mind of tax efficiently passing on your wealth to your loved ones?

When you’ve worked hard to build up your wealth, you want the peace of mind to pass this on to your loved ones. There’s much to consider, especially if you have a complex estate. Who should it go to? And when? Is it sensible to pass on wealth during your lifetime? To discuss how we can help, do not hesitate to contact us.

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Meet the Financial Adviser: Tom Garsed-Bennet

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Tom’s approach to financial advice is to deliver the very best service for his clients, to fully understand your particular circumstances, to help you visualise your financial goals and then to put a plan in place to help you achieve exactly what you want to in life.

Great financial planning allows you to maximise your financial position in retirement and to help you achieve the retirement lifestyle you want.

If you’d like to know more about Tom and how he can help you achieve your financial goals, take a look at his Profile Here

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Inheritance Tax Planning

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The UK Treasury has been receiving record-breaking Inheritance Tax (IHT) receipts. IHT receipts amounted to approximately £7.09 billion in 2022/23, compared with £6.05 billion in the previous financial year.

 

Due to rising property prices more of us are falling into the IHT liability category

Are you married or in a registered civil partnership?

You can pass your assets to your partner IHT-free (in most cases)

Start conversations with your loved ones

With thousands more households now falling into the inheritance tax liability category, it is important that you have a conversation sooner rather than later

Your estate consists of everything you own including:

To find out about our Inheritance Tax planning services, please get in touch.

 

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How can you financially protect your company?

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Ellis Bates Financial Planner Matthew Stirling discusses the steps you can take to financially protect your company, and how we can help you.

If you’d like to know more about how Financial Advice could benefit your business, download our guide here:

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Addressing financial uncertainty in your business

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Is your business protected from the unexpected?

If you would like more information on how to protect your business from financial uncertainty, click here: www.ellisbates.com/business-owners

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Financial planning for business owners

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Every business needs a robust financial plan, but do you have one for yourself too?

You work hard for your business, no doubt to provide a better life for you and your family. But do you spend more time planning for your business than you do for yourself? Have you thought about how your business can finance your personal goals, now and in the future?

Running your own business often brings with it greater risk, stress and pressure. But the rewards, both financial and personal, can be tremendous and the satisfaction of seeing your business grow immense.

That’s why your corporate and financial planning should work together hand-in-hand.

Achieving your personal financial goals will generally be dependent upon the success of your business. This means there are a number of key areas that need consideration, planning and regularly updating to ensure you achieve the outcomes you want. As a business owner, you have more options for maximising the value of your pension and retirement plans than an employee.

Are you taking full advantage of these and optimising your pension opportunities? Another crucial area you can’t overlook is protecting your business if the unexpected were to happen. How would your business be impacted if you or one of your best people were suddenly taken out of the picture? And if you run a business with other shareholders or partners, what happens if one of you were to die prematurely?

Where will the shares go? Who will you be running the business with? Will it be their partner, their children or the state? After pouring years of your life into building a profitable business, it’s natural that you’ll want to pass it on to someone who will eventually take equal care of it, whether that’s a member of your family or a buyer. Have you made provision for this and put in place a succession plan?

Finally, an estate plan accomplishes two things: it makes sure that someone you trust takes over your business when you’re no longer able to or, if not, it details how exactly it would be wound down. And, as your wishes are clearly outlined, it also simplifies things for your loved ones, reducing disruption to their and your customers’ lives. What plans have you got in place for both of these scenarios?

Business owners and entrepreneurs have different financial planning needs to those of employed professionals. You encounter different issues, and the solutions are not always clear. As a business owner, your time is precious.

Solutions are not always clear, which is why we’re here to help.

We offer comprehensive financial planning advice for business owners and entrepreneurs, so you can spend more time doing what you do best – running your business.

To find out more or to discuss your future vision – please contact us.

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Planning for Retirement as a Business Owner

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Whether you’re a sole trader or the owner of a limited company, a pension can help you save for retirement while saving you tax along the way. As a business owner, pension planning should be part of your overall planning for how best to finance your business and how to eventually realise the value you have built up in it.

Retirement planning is crucial for everyone, business owner or not. The tax regime surrounding pensions has been simplified in recent years, and you now have considerably more flexibility when it comes to funding your retirement. As with taxes, an experienced professional financial adviser can walk you through your options to create a plan suited to your business needs.

Manage taxes

Going the do-it-yourself route may work for your personal finances, but tax planning can be far more complicated as a business owner. Outsourcing tax planning and preparation to a qualified accountant or other financial professional who may be helping with your business will not only free up time, but that expertise may reduce your tax liability.

Corporate tax planning helps businesses to ease tax burdens and operate more smoothly and efficiently. Effective tax planning is essential if you are to minimise your tax bills.

Business or Corporation Tax planning and Income Tax planning should go hand-in-hand.

Create an estate plan

Proper estate planning helps to provide for your loved ones, business partners and employees who rely on your business; minimise tax exposure; and provide clear instructions on how the business should proceed. These plans are also critical in case you’re incapacitated.

Not having an estate plan in place risks undermining a lifetime of work, jeopardising the livelihood of your family and your business partners. Owning a business is time-consuming.

Your focus is on managing the day-today tasks while growing the business. There’s little time left over to think about anything else, especially what would happen if something were to happen to you. Not having an estate plan in place risks undermining a lifetime of work, jeopardising the livelihood of your family and your business partners.

Create succession and exit plans

Consider these two different scenarios. In a succession, you’re turning the reins of the business over to the next leader. In an exit, you are selling or shutting down the business. When deciding whether to sell, close or pass along the company you’ve built, you need to consider a number of factors.

On a personal level, are you ready to retire or find you’re working too many hours? Are you simply no longer passionate about the business and ready to try something new?

Answering these questions should provide clarity into your next steps.

Exit plan

If you wish to sell your business, you need an idea of the value. In fact, even if you aren’t looking to sell, it’s smart to always have a ballpark idea of the business’s market value.

Establishing an exit plan early on in the life of your business is crucial if you’re to extract the highest value from your investment of time and money. Exit plans are not static documents, however – they’re fluid, and should be reviewed as the company evolves. This ensures that plans remain achievable and provides the best chance of securing the highest return on sale, whether the business is intended to provide an income until retirement, or you intend to sell your company sooner rather than later.

Succession plan

Succession planning is becoming increasing critical for all businesses. It is the process of identifying and developing potential future leaders or senior managers, as well as individuals who could fill other business-critical positions, either in the short or the long term. The aim is for organisations to have greater visibility of individuals who are interested in filling key and/or new roles effectively.

A well-thought-out succession plan reduces the risk of significant disruption when you lose senior personnel. The process of succession planning is critical to ensuring your business can continue to thrive when key people leave.

A well-thought-out succession plan reduces the risk of significant disruption when you lose senior personnel. Without a succession plan, businesses can find themselves without adequate management and leadership where it is needed most.

To find out more about how Financial Advice could benefit your business, download our free guide:

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We discuss Financial Planning for Business Owners

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As a busy employer, you need fast access to expert financial advice and financial services to help you both build and protect your business at the same time. You want to make the most of every financial opportunity whilst ensuring your assets are future-proofed.

To find out more about how Ellis Bates can support you as a business owner, click here: https://www.ellisbates.com/business-owners/

‘We are here to support you and your employees at every stage of your business journey’

Nigel Swan Regional Director, Head of Corporate & Pensions

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Guide to Financial Advice for Business Owners

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Download your Guide to Financial Advice for Business Owners

Running your own business often brings with it greater risk, stress and pressure. But the rewards, both financial and personal, can be tremendous and the satisfaction of seeing your business grow immense.

That’s why your corporate and financial planning should work together hand-in- hand. Achieving your personal financial goals will generally be dependent upon the success of your business. This means there are a number of key areas that need consideration, planning and regularly updating to ensure you achieve the outcomes you want.

Fill out the form below to get your free Guide to Financial Advice for Business Owners

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Building A Reliable Income for your Golden Years

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Annuity Shopping

When it comes to using your pension pot, buying an annuity is one option that provides a regular and guaranteed retirement income for either your lifetime or a fixed term. However, it’s important to note that purchasing an annuity is typically an irreversible decision.

Do you know that shopping around for an annuity could earn you £15,000 more over your retirement? Recent analysis has shed light on the benefits of exploring your options regarding annuities. Therefore, it becomes crucial to carefully consider your options, select the appropriate type of annuity and strive to secure the best possible deal.

Valuable tool for retirement planning

Annuities are a valuable tool for retirement planning as they offer a reliable and predictable income stream, often lacking in other investment options. Furthermore, certain annuities can be linked to inflation rates, providing stability during periods of economic volatility. This makes annuities attractive for individuals prioritising risk aversion in their pension savings strategy.

The primary difference between annuities and pension drawdown products is that annuities require using the entire pension pot to purchase an insurance product that provides a fixed retirement income. In contrast, pension drawdown products allow flexible income withdrawals with the remaining funds invested.

Balance security and flexibility

Unlike pension drawdown arrangements, annuities do not typically pass down any remaining funds to beneficiaries after the holder’s death. However, it is possible to balance security and flexibility by partially combining annuities with pension drawdown.

According to the analysis, a 66-year-old with a £100,000 pension pot can now purchase

an annuity with an annual income of £6,790. This represents an increase of £842 compared to the previous year. The surge in interest rates has resulted in the highest demand for annuities in years.

Importance of shopping around

Data further emphasises the importance of shopping around. It has revealed that the difference between the best and worst annuity rates available can be substantial. For a 66-year-old with a £100,000 pension pot, rates can differ by as much as 9.1%, translating to a potential annual income difference of £622 or a staggering £14,928 over the average retirement period.

The recent focus on annuities can be attributed to rising interest rates, which have a tangible impact on the income of those who have already purchased an annuity. However, it is essential to understand that while record rates are advantageous, they should be considered part of a broader discussion.

Looking for a guaranteed income throughout your lifetime?

Annuities continue to be attractive for individuals seeking peace of mind and the assurance of a guaranteed income throughout their lifetime. If you are contemplating an annuity, speak to us and we will explain how to assess all your options. As the research suggests, shopping around is crucial in securing the best possible deal for your retirement income.

If you’d like to discuss your retirement income, please get in touch using the form below:

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