Trevor had Power of Attorney over his father’s finances after he became ill some years ago. He was worried about the cost of care home fees and wanted financial security in relation to the costs associated with looking after an ill parent.
He came to us as an existing client and trusted adviser to seek advice.
Trevor was unsure as to what would be an appropriate investment and was worried about the size of his father’s estate in relation to Inheritance Tax.
He did not want to worry about a large tax bill when his father does pass away nor did he want immediate tax bills now if he was to receive an income from an investment that could cover care home costs.
Trevor wanted something that could be expertly managed in accordance with an appropriate investment strategy, beating the returns from leaving the cash in deposit accounts.
What We Did
We carried out some research on various investment products that were suitable for large contributions, with large investment opportunity and could also be placed under Trust.
We recommended a model portfolio of investment funds that were designed and managed by us. The portfolio was perfect for someone with his attitude to investment risk, whilst investing in a range of assets such as equities, bonds and property. Therefore searching for good returns over a long period by having well-constructed diversified portfolio.
We soon realised that an International Bond would be the perfect investment for Trevor on behalf of his Father, meeting with his above objectives.
The bond benefits from ‘gross roll up’ and as such can grow quickly and efficiently as there is no tax to pay within the bond. Trevor was excited that he could potentially see the value of the bond increase in value.
The bond enables monthly withdrawals which was again useful for Trevor as he was concerned about future care home fees his father would have to pay. These withdrawals (up to 5% of the value of the bond) can also be tax deferred, meaning no tax is paid immediately but rather at a date which is more suitable.
We also suggested that Trevor place the bond in Trust, therefore removing it from his father’s estate when Inheritance Tax does becomes liable.
We presented our findings to Trevor with a letter sent out to him before our initial meeting and later met up with him for a face to face discussion. Trevor quickly agreed that this investment was right for him and his father going forward.
We gathered the correct paperwork and a few days later the investment was submitted.
Trevor now has an investment that can invest in a wide range of funds that are in aligned to his father’s low attitude to risk.
He has peace of mind that his father’s estate will not be overly large when he is liable to pay Inheritance Tax and that he has a financial instrument that can pay him capital sums should he require them.
Trevor appreciates that his father’s investment is expertly managed on his behalf receiving ongoing reviews and management.
The Bond was also set up on a Wrap Platform that enabled Trevor to see real time valuations any time he wants.