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Moving the goalposts

I am a football player in the Premiership coming to the end of my playing career. I have inherited a lump sum and wish to use it sensibly. I want to buy a new property and ensure that my partner, Andrew, is looked after if something should happen to me. How should I go about this?

Gay and lesbian clients may be the same as the rest of the population on the inside but have different outlooks and different financial planning needs. The differences need to be established in the fact-find process and followed up by a careful selection of providers.

Income and expenditure need to be considered as often the “pink pound” is spent on an expensive lifestyle.

It should not be assumed that gay clients do not have or want children. The major financial planning driver is that same-sex couples cannot marry, affecting their pension rights, tax treatment and residence status for a partner from overseas.

Footballers are deemed as having a special occupation by the Inland Revenue and are allowed to draw benefits from a personal pension from age 35. If there is no need to draw the benefits, it may be more prudent for the pension to continue. It will make sense to delay annuity purchase due to the current low rates.

Benefits payable on the death of a member can arise before or after they have taken retirement benefits from the policy. It is important that a nomination of beneficiaries form is completed as the payment of survivor benefits for same-sex and unmarried couples can be a grey area, with many pension scheme trustees still demanding proof of the dependent relationship before payment of benefits. The nomination needs to be updated if circumstances change.

If a client is not concerned with passing wealth to others upon their death, it is advisable to maximise pension contributions once expenditure needs are established.

The inter-spousal inheritance tax exemption does not apply. The use of a discretionary will trust for assets left on death may be appropriate.

It is important for unmarried couples to execute a valid will outlining their intentions, especially gay and lesbian couples who have not yet got any partnership rights in law.

At the end of your football playing career, it is more likely that you will be able to lay down roots and buy a house of your choosing. Lenders are only interested in the credit-scoring of the couple. Life insurance and critical-illness providers may ask if there is anybody else buying the house that has not been mentioned on the application form. If he mentions Andrew, in most cases, a lifestyle questionnaire will need to be completed.

Although the protection market is moving in the right direction in relaxing underwriting for joint-life applications by males, it is still assumed that HIV is a gay disease. If the levels of cover required for mortgage protection are sensible, you could both submit single applications to different companies on a single-life basis. For higher sums assured, it is to be expected that, once the lifestyle questionnaire is submitted, the premium will escalate above standard rates. Now that morbidity and mortality statistics are more readily available on HIV and Aids experience, it can be expected that rates and additional underwriting requirements will move favourably in line with data.

The main purpose of investment and financial planning advice is to create financial independence for the individual and any dependants. You are in a position where you can decide whether you want to gift any of the inheritance to others, put some of the value under trust for Andrew, use the value for a house purchase or spend the inheritance.

Financial independence is the position where the property in which you want to live is paid for and there is guaranteed income after tax from all sources which is greater than your budgeted expenditure. The construction of an investment portfolio will depend on many aspects, especially the purchase of the right assets and maximising the tax efficiency and security of investments to match your risk profile.


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