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Tax year-end planning with the family

From the Technical team at Prudential

Let’s face it, many aspects of financial planning involve a lot of technical detail. At our face-to-face events, we’ve had great success bringing these technical topics to life through the use of practical case studies.

Meet the family

Prudential’s Planning Matters hub brings together a fictional family and explores their planning needs through a detailed case study for each of them.

Margaret is the head of the family and has estate and inheritance tax (IHT) planning high on her agenda. Her case study covers things like order of tax rules, dividends and savings income. It also looks at deed of variation and transferrable nil-rate band planning.

John is one of Margaret’s three sons. Having just become a new grandfather, he wants to make the most of his sizeable investment portfolio and defined benefit pension scheme so he can spend more time with his expanding family.

Gavin is another of Margaret’s sons, who has no dependants. Now an IT contractor, an historical defined benefit transfer is reviewed in his case study to see why the decision was made to transfer. It also looks at salary and dividend methodology and save-as-you-earn shares.

David is Margaret’s youngest son and a successful business owner. His case study has two parts: one where we look at his corporate investing opportunities; and the other with a focus on his retirement provision, including how extracting profits from his company can fit in.

Jane is Margaret’s daughter who is about to go through a divorce. Her mum has also asked her to act as a trustee. In her case study, the mechanics of sharing assets is explored as well as the duties and responsibilities she’ll need to take on when becoming a trustee.

Access all the case studies here

Prudential’s Technical team

The Planning Matters case studies are brought to you by the Prudential Technical team. The combined team has more than 250 years’ financial services experience and supports the adviser community in many ways. For example, their Technical Helpline took around 14,000 enquiries from advisers in 2016.

The topics advisers commonly request help with include inheritance tax, taxation of various tax wrappers, and trust issues – from trust administration issues to identifying what trusts may be suitable for clients. Pensions planning is also proving problematic with advisers seeking help with annual allowance, transfers, tax relief and death benefit options. A lot of these topics  are covered in the case studies! 

Key opportunities when tax year-end planning

Members of our Technical team explore some of the key opportunities when tax year-end planning with your clients. To help bring these opportunities to life, we look at how they can relate to some of our Planning Matters family. For example, we look at:

  • David making a large employer contribution before the tax year-end using carry forward from the previous three years
  • The impact money purchase annual allowance could have on Gavin should he take an uncrystallised fund pension lump sum
  • Margaret making use of exemptions to reduce her estate and residence nil-rate band planning now
  • The treatment of losses to help reduce John and Anne’s liability to CGT

You can access all the case studies as well as other relevant support material on our dedicated Planning Matters hub.

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