Recently Wealthy

The Client

Graham and Samantha were in their mid 50s and had built up a decent asset base in their own right, through years of hard work. They were both hoping to retire from full time work at age 60.
Out of the blue, Samantha received some very unexpected but very happy news - her uncle wanted to make a gift of £600,000 to her and Graham, in an effort to reduce the Inheritance Tax liability on his estate and so he could enjoy seeing Graham and Samantha benefit from the gift whilst he was still alive.

To establish the true difference to Graham and Samantha's lives and plans that the gift had made.
To set aside some of the monies for Graham and Samantha's 2 children, in order to help them get on to the property ladder.
To pay down their outstanding mortgage debt.
To invest the remaining funds (excluding funds for short-term needs) in a suitable investment portfolio, in line with Graham and Samantha's cautious attitude towards risk, to achieve long-term growth and help to provide for their income needs.

£100,000 was ring-fenced in easy access, no risk accounts for the children, which would earn a reasonable rate of interest before the funds were required.
Made the money set aside to pay off Graham and Samantha's mortgage work harder, by utilising a no risk account which would generate a higher after-tax return for them than would be the case if they paid off the mortgage immediately. This strategy persisted until it became less advantageous, whereupon the mortgage was repaid and the profit pocketed.
Established and managed a low-risk, low cost, well diversified investment portfolio and used strategies to meet Graham and Samantha's income needs, whilst minimising their income tax liabilities and maximising the use of Capital Gains Tax allowances.
Took Graham and Samantha through the financial planning process and determined that Samantha could give up her job to spend more time with her elderly father, whilst Graham could now work on only a part-time basis for the final 5 years of his career.

Graham and Samantha obtained an easily missed and risk-free advantage through the sensible allocation of their cash, worth around £2,000.
They have a long-term investment portfolio which is tailored to their needs and preferences, in respect of its ability to protect the purchasing power of their money against the effects of inflation and generate a tax-efficient 'income', all at a level of risk they can comfortably live with.
They are relaxed about spending more time doing the things they enjoy and less time doing the things they don't and are happy in the knowledge that their major financial priorities, including providing for their children, are taken care of.