Guidance. Reassurance. Inspiration.
If you’re just settling into your career, then you’re in the best place to get a head start on planning for your future. Take a look at how we helped Mr B invest wisely and avoid paying unnecessary tax on his hard-earned salary.
Meet Mr B
Mr B is a 35-year-old entrepreneurial and career-minded chap. He started a successful business during his university years that he then sold for a healthy profit in his early twenties. This gave him a fantastic financial foundation. Mr B is now settling into a great career and wants to start investing for his future, but as a higher rate taxpayer with additional tax issues relating to the sale of his business, he asked us for advice on how to keep as much of his hard-earned income as possible.
Working back from the future we discovered that Mr B was paying into several expensive pension plans, so we quickly consolidated those into a single, more efficient account and asked him to increase his contributions. Using the maximum pension allowance is a great way to recover as much tax as possible AND start building a significant fund for retirement.
Looking at savvy investments
As Mr B had cash from the sale of his business, we also looked at several investment opportunities to make his money work harder, decrease his tax liability and spread the risk. We cleverly spread Mr B’s investments across a variety of tax-efficient sources (including an Enterprise Investment Scheme and Venture Capital Trust) to ensure he gets regular tax-free dividends and is also able to defer or avoid Capital Gains Tax altogether.
For similar reasons, we also recommended using a Peer-to-Peer lender, allowing Mr B to earn a further £1000 each year in tax-free interest. We also advised him to start overpaying his mortgage and keep some Premium Bonds – both of which are a tax-efficient and low-risk way of investing for the long term.
Keeping one step ahead Mr B is now on track to have the future financial position he deserves for his early entrepreneurial efforts and he can rely on us to keep a close eye on his portfolio to ensure it does the best possible job for him