Previous adviser recommended to set up 5 onshore bonds with the same provider, in the same investment fund on the same day. Each bond has 1000 segments. None of the bonds are in trust and the client is a non-taxpayer.

Am I missing some kind of super whizzy wheeze as to why they might have recommended this? Client has an IHT liability but no real plans to gift and only two kids so I can't see why you would need so many bonds and segments. He only has £30k in GIAs and it's not looking like a diversification play as the bonds are all in the same fund (only one fund).

Any ideas or is it just weird?

I think Royal London might be able to do this. Any others?

I have a client who works full time and will continue to do so (earns c£50k p/a). He wants to take his DB pension now and continue to work at the current level. DB will provide £200k PCLS and c£30k income per year.

His employer will enrol him into a new DC scheme once DB payment has been made. His thought is to go into the DC and sacrifice a significant amount of his £50k salary for the next 4/5 years of working full time.

He has been told by his employer that he can sacrifice up to 75% of his pay. I havent had this confirmed yet.

The PCLS is being used to repay mortgage, home improvements and a cash pot for him to enjoy life now and do Scuba Diving trips now whilst he has health. No PCLS received will be added to a pension scheme.

If he sacrifices say £30k of his pay, he will be in the same net income position as he is now, the DB income will replace the £30k being sacrificed.

Previously been paying £16,200 in pension contributions each year.

Would doing the sacrifice proposed above be considered recycling? Have read the manuals and can't make a final decision!

Thanks

I've not come across a case like this before where the client (male) is over age 65.

They have a deferred DB scheme which we are analysing to understand a transfer. The scheme has provided a CETV and all the relevant transfer out documents.

However, they have pre88 GMP included in the benefits. The scheme pack says the following:

"If you are at or above the GMP payment age set out above, there are legislative restrictions on the types of schemes which can accept the transfer of the GMP part of your pension. It can only be transferred to a formerly contracted-out salary related pension scheme, which is able to pay the GMP and any increases to it".

Can someone talk me through the logistics of how a transfer would have to go ahead and in what format?

Thanks
Wild

Does anyone have any experience of them? Any cautionary tales?

Many thanks

Andy

Am I correct in thinking that if this remains in the late husband's name and his wife passes away within at the next year, it will be treated as falling into her estate by way of him naming her a sole beneficiary on his SIPP and him dying before her? At which point it would be payable as a lump sum taxed at 45% under the terms of her Will?

Sorry if this isn't worded very well!

I have been asked to comment on the following:

A client is considering assigning an existing offshore bond into a discretionary trust. The solicitor is recommending this as it will allow the Trustees to lend capital to the beneficiaries while, presumably, protecting the family wealth and ensuring that the capital does not end up in the beneficiaries' estates.

I don't have any specifics about the bond, the settlors, lives assured or value etc so I think the adviser is just looking for some pointers, aside from the usual things to watch out for from an IHT perspective. I think he's really asking is an Offshore Bond a suitable wrapper for the trust's assets.

So, what are the potential downsides of assigning the bond into a Trust which has the objective of making loans? I think I can think of a couple but would like some opinions too please:

• I suppose segments cannot be assigned to a beneficiary as that isn't a loan, so I guess a special loan agreement would need to be made (presumably the solicitor could write a suitable deed/agreement)?
• If segments are loaned to beneficiaries, that feels like a 'for money or money's worth' transaction, so it would trigger a chargeable gain on the Trust at the time?

All thoughts welcome please.

Many thanks
Colin

So we have a client who settled £20k into a discretionary trust a year ago (bond investment). We are now looking to assign the bond into a bare trust.

Can anyone give me their thoughts on the IHT treatment of this. Was obviously a CLT going into the original trust, but does the subsequent transfer out a year after change this? I can't find anything on this anywhere.

Thanks

Please may I check if I am missing something here that the online calculator tools are using in their calculations that is resulting in this discrepancy?

I have a client who has a main residence (sole name) and is looking to sell and buy a new house (again for main residence) on the same day. He also has a 50% share in his parents property, which was gifted to him three years ago.

He has asked me if he would pay Additional Dwelling Supplement. Being based in England I know SDLT but I am not so familiar with LBTT.

From research I have read websites saying that he wouldn't have to pay ADS as it is for the purchase of a main residence, however another website said that it would be applicable.

I think it's a no but can anyone confirm that my understanding is correct, or not!

TIA

Can someone help me to articulate the difference between this scheme and a cash balance scheme (initially) to the adviser?

Many thanks.

I am aware that guidance from HMRC concludes that an OAC will fall within the 5% allowance where the client is being provided investment advice.

However I read an article that states:

"Guidance from HMRC, confirmed to FTAdviser, suggests provider-facilitated adviser charges for advice on underlying investments can be paid by the provider from its profits in some instances. This is due to the fact HMRC views the provider as the owner of assets.
This would mean the full 5 per cent deferred allowance can be taken as income. The FCA confirmed it is looking into the issue.
However, further clarifications provided to FTAdviser could mean this advantage is not applicable in the majority of cases.
HMRC said that the guidance would apply if the life company receives the advice “directly”, rather than the policyholder, then the guidance would apply and the charge can be paid out of provider profits."
(https://www.ftadviser.com/content/91eac5c2-b4a0-5862-9421-a483c7f079c2)

I am curious if anyone has any idea as to what situations would be considered a provider receiving advice directly?

Thanks!

Would be very grateful for any thoughts on this....

Can you exceed your annual allowance and accept paying annual allowance charge to reduce adjusted net income below £100k?

Bit of background, someone earns circa £140k, has two children, been receiving childcare hours and tax free child care, so this provides significant value. Bonus is higher than expected, so using up full annual allowance and carry forward their adjusted net income is still going to be about £102k.

Thoughts are, they could make a £2,001 charity donation or could they make a £2,001 gross pension contribution to their SIPP (there company won't allow ad hoc/bonus sacrifice) and just accept they will pay the annual allowance charge on this £2,001 yet still keep all the benefits they have received from Gov for childcare as their adjusted net income is now £99,999?

Thanks to anyone who can provide any help!

Has anyone had experience of re-submitting an existing Enhanced LTA application to HMRC?

• We have a client who has an Enhanced LTA cert from April 2007, with no specific registered tax free cash.
• They were and have always been the sole member/director of a SSAS. The current value is c.£7.2 million
• They have not yet crystallised any funds, but we are now looking to access tax free cash.

The adviser suspects that the client could have been eligible for enhanced tax free cash, but this was not correctly applied for at the time (we didn't get this for the client and we don't have the paperwork).

Qs
-Is there any downside in re-submitting the APSS200 application at this time?
-What information/evidence would the client need to provide in order to establish a protected tax-free cash amount.

Any pointers gladly received.

Thanks

We have a client with a Corporate held offshore bond, which we'd ideally shift to our preferred platform.

The bond is taxed on the fair value basis.

Are there any tax implications of selling down the offshore bond to cash, withdrawing to company bank account and then opening up a new account at preferred platform?

Our thinking is the only tax is corporation tax due on the gain since last accounting period, which was recently.

Lastly, with the bond being taxed on fair value basis and no 5% tax deferred allowance, is there any difference from a corporate held GIA?

Any help, much appreciated!

Many thanks

I’m currently working on a large case and considering how to split the funds between a GIA and a bond (onshore/offshore).

When using the Quilter and M&G tax wrapper tools, where do you source the expected interest, dividend, and capital return assumptions from?

Many thanks

This is a sense check. I'm sure I know the answer but starting to doubt it.

Company director is funding £60,000 per year, nearly maxed out on carry forward allowance.
Has an old DB pension from a job years back, but it is pretty good considering. c. £12,000 pa.

• Am I correct to say this will need factored in to his AA calculations?

• How can people avoid overfunding pensions when this years (25/26) DB pension statement is not available yet?

Many thanks

1. We applied for all remaining Tax free cash to be paid, on the basis of info we had at the time in Feb 25, the value of the pot increased slightly prior to the actual sale going through.
2. There was a subsequent change reported by the administrators on a previous DB taken due to GMP equalisation which increased the LTA used.

The breach is around £1,000 so not huge based on the above it appears this might be an issue which will come up again.

When we are aware all the tax free cash has been used, as it has for this client, does anyone know if its just a case of instructing the provider to switch the remaining Uncrystallised Pot to their Crystallised Pot?

Thanks for any input

Louise

We have a case where they appear to be over-insured when it comes to income protection.

They have a couple of personal plans set up a few years ago which appeared to be covering everything they needed. However, the company they work for has now provided them with income protection of 50% after a 12-month deferred period.

We are not overly clear how income protection policies interact with each other during a scenario of being over-insured. Which policy will pay out less than another? Does 1 policy pay out in full and then another pays the difference? Do they all pay out proportionately?

If there were no personal policies and you only had the group policy detailed above, how would you go about topping up to get fully insured?

Hope this makes sense

Thanks
Wild

Does anyone have any experience with EP clients who have no protected lump sum entitlement.

I have a specific scenario.

1. Client has EP with no protected PCLS.
2. Client crystallised £1.75 million in 09/10, and used up 100% of the LTA. The LTA in 09/10 was £1.75 million and the client received £437,500 in tax-free cash.
3. Client now has c£300,000 in SIPP funds uncrystallised.

My assumption was that the client's remaining LSA is £0, as he used up 100% of his LTA in 09/10.

I also calculated that he wouldn't benefit from a transitional certificate as he has received more than £375,000 in tax-free cash.

But I've been told by a SIPP provider that the client has a remaining LSA of £106,275.

Their calculation is based on 100% of the standard LSA being used (£268,275), and because the client has EP of £375,000, his remaining LSA is £106,275.

Are they correct? It's the first time I've come across a client with EP and no protected PCLS.

I’m currently working on a case involving a new client with multiple pensions totalling around £2.5m. One of these pensions is valued at approximately £190k and benefits from around 33% protected tax-free cash.

My understanding was that, regardless of any protected tax-free cash, the client would still be limited to the standard LSA. However, after double-checking with a technical team, they suggested that the client could first use their LSA across their other pensions and then crystallise the protected tax-free cash scheme last. On that basis, the client would effectively receive £265,275 plus an additional £62,700 (33% of £190,000) as tax-free cash.

That feels almost too good to be true, so I wanted to check with others to see if this is the case.

Any help appreciated!

Putting it another way, we will avoid making significantly increased contributions for the next 2 tax years because TFC has been released and we don't want to fall foul of the recycling rules.

Once we are into the 3rd tax year after the year in which TFC was taken, can we use any unused AA from the preceding 3 tax years?

It goes without saying that no income has or will be taken from the pension.

I can't find anything that says we can't but I wanted to see if anyone had any thoughts.

Thanks!

Andy

Just a query regarding an annuity guaranteed period or value protection.
On death, I understand that (in most cases) the protected value or calculated protected amount of the guarantee will be the amount in the deceased's estate.
With regard to calculating available RNRB and the tapering of this relief, is the value of the annuity death benefits included in the estate for the calculation of the RNRB tapering, or would the value come in after this point?
I would assume it is the former, and that the RNRB would be affected by this value, unlike gifting is.

For clarity. e.g:
Client estate of £2,000,000 (excluding value protection amount of the annuity)
RNRB and transferred RNRB of £350,000 available
Annuity protected value on death of £200,000

So would the RNRB remain at £350,000 or would it now be calculated as estate of £2,200,000 and so an available RNRB of £250,000 following tapering?

I've been told by several providers that when purchasing a lifetime annuity using funds from a beneficiary drawdown plan, they will not allow any additional benefits, such as guarantee periods, value protection or spousal benefits.

I was wondering why this is the case? What is stopping these providers offering them? Struggling to find anything online which can explain it.

Thanks
Wild

I haven't come across one before whether the loan is being recalled and funds reinvested into a new trust and want to clarify the options for the growth on the loan trust, as that is currently outside the estate. Can this be moved to the new trust and remain outside of estate for the benefit of beneficiaries?

Any guidance on options would be much appreciated.

Thank you