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Avoid a Tax Nightmare
"She chose to invest a small amount of her time and energy into something truly deserving which undeniably paid off!"
Ms Miller's story
Ms Miller was referred to us by a local Solicitor who identified that she simply didn’t have enough time to manage her finances on her own. Taking her Solicitor’s professional advice, Ms Miller met with one of our Financial Planners, Tom, to review her current position.
She had some existing investment plans and a few personal pension plans, but her largest asset by far was her NHS Final Salary Pension. She’d never really paid much attention to it, as it just kept building up nicely.
After the initial meeting, it took us a few weeks to get all the relevant information from third parties. When we were just about done collating the information, it became quite apparent that Ms Miller had a serious Lifetime Allowance (LTA) problem. This could have resulted in a £125,000 tax charge to be paid in a one-off transaction had it not been addressed properly.
Tom advised Ms Miller that there was in fact protection which we could secure to increase her Lifetime Allowance Limit, saving a charge of £62,500.
She had been planning to draw her NHS pension and deal with the remaining personal pensions afterwards, but we strategically planned to draw down from her personal pensions in a way that avoided the immediate tax charge being deducted. We adapted her plans so that the NHS would pay the tax charge over her lifetime, as opposed to her being personally responsible for a huge lump sum deduction from her more accessible and flexible investments at the outset.
Naturally, Ms Miller was shocked to hear that she narrowly avoided a nightmare situation (which she had no idea about) and couldn’t thank Tom enough for his key advice. Not only was she truly amazed when she learnt this news, but also felt a sense of accomplishment.
She chose to invest a small amount of her time and energy into something truly deserving which undeniably paid off!
If you would like to have a chat with one of PenLife’s Financial Planners, please call us on 01904 661140. The call is held at our expense and there is absolutely no obligation to take things further. Alternatively, email enquiries@pen-life.co.uk or head to www.pen-life.co.uk/contact.
Please note: The contents of this case study are for informational purposes only and do not constitute individual advice. The information contained within this is for guidance only and does not constitute advice which should be sought before taking any action or inaction.
The information in this case study was correct at the time of writing.
The Financial Conduct Authority does not regulate tax planning.