News: Week In Review: #21
May 18, 2020
It has been another busy week here at Plus Group and we’d like to keep you updated on what we have been up to behind the scenes.
in Partnership with Triple Point
One of the highlights of the week for us was the first in a series of six IHT training seminars, organised in partnership with Triple Point.
This was all carried out via Zoom and over 100 Partners & Advisers joined us for what was a very interesting and enjoyable couple of hours.
Should you wish take part in future seminars, you can register your interest here.
Defined Benefit Case Study
Things are still very busy with Paraplanning and as usual we have had a few interesting cases to look after this week.
One of which was a fairly demanding Defined Benefits case, in terms of the client’s situation, which was approved:
The gentleman was 64 and had retired a year ago. He was using his cash to provide income and had used some of his Lifetime Allowance via an UFPLS in the previous tax year, so had plenty of cash to see him through – until now.
He had agreed retirement objectives with the Partner to include an immediate capital need of £50k (and access to more in the future – he had an interest only mortgage of £200k due in 7 years’ time), to be no more than a basic rate tax payer BUT with a net income need of £53,000 (so in higher rate tax) and of course, to maximise his legacy to the family.
His house was worth £1,000,000 – significant for IHT purposes in terms of the Residence NRB and ISAs valued at £260,000.
His transfer value was £1,300,000 and he had Individual Protection 2016 at £1,111,111.
The Lifetime Allowance tax problem was also to be exacerbated by three other DB schemes he was to crystallise – two now and one next tax year.
The schemes were all with the same provider who was willing to pay any LTA tax for the member and reduce the pension (although we could not find out by how much).
In short, the case was in the words of the paraplanner, ‘a bit tax messy’ – income tax, IHT and LTA tax. The main elements to the case that were ‘interesting’ were:
- The LTA tax calculations – a full two pages in the SL. We had to show all the options available to meet the income and cash needs and also check the uncrystallised funds at 75. A large Excel spreadsheet was therefore created.
- The LTICs – as seems more common nowadays, the client had different escalation rates on more than three income streams to put onto the LTICs – where, as some of you may know, we are limited to three columns.
Those incomes at 2% CPI – including BTL rent – had to be worked into the Target Income.
No problem, I hear you say – but then tax free cash and LTA charges also had to be worked in, on all the viable advice options.The paraplanner had to draft an explanatory sheet for the numbers in the LTICs.
This was one of those cases that took a lot of time to construct and get through Business Assurance.
The paraplanner said it was great for his personal development in that it stretched his authoring skills to the limit and was quite mathematically challenging. In his words, it was ‘a real kitchen-sinker’.
It has been another busy week for our Administration Support team too.
They have been helping Partners with varied requests including setting up e-briefing for one Partner who had never done this before.
We have also been helping a practice to book their clients in for telephone or Zoom meetings. Some were re-arranged from face to face meetings that we had already booked for them.
Most of their clients really do seem to be embracing the new and varied ways of engaging with their adviser.
However, there were some clients who had declined their meetings/usual review at the start of lockdown, wanting to see what happened and preferring a face to face meeting.
As this is still unlikely to be able to happen for a while yet, we helped by emailing those particular clients for the practice to see if any had changed their minds and would now like to speak with their adviser, again either by telephone or Zoom.
A number of topics were listed within the email to give them some things to consider that they may not have thought about before, as these reviews never just have to be about how the markets are doing.
In this, he discussed how it has continued to be another challenging week for our chasers, with some of the providers still struggling to provide a timely service.
However, the team keep chipping away at them with never ending optimism and are starting to see results from all their hard work as information has finally started to work its way through to us.
In the next week we will be launching both our Cash Flow Modelling Service and Social Media Marketing Support Packages.
We will continue to provide our weekly provider update email – again if you are not on the list for this update, just let us know and we can add you right away.
We are sure we will have more complex/interesting cases heading our way too.
In the meantime, take care.