Case Studies


Divorce Click Here

IDFM (City) Ltd

IDFM City

Case Study – Divorce

(To protect client confidentiality the detail of this case study has been changed)

Background

– Gemma was going through a divorce after 20 years of marriage.
– The family house was valued at £1.7 Million and family savings of £600,000.
– Gemma had no pension provision and her husband’s pension was valued at £750,000
– Gemma’s income was £20,000 per year.

Key Challenges

– Gemma felt that she had very little understanding of financial affairs and felt bullied by the legal process.
– Gemma was concerned about her lack of pension provision.
– Gemma needed help with understanding the best way to formulate a financial settlement that best represented her interests.

Action Taken

– Prepared a ‘Pensions & Divorce ‘ report setting out all the various options with regard to her husband’s pension and the pros and cons of the different options.
– Prepared a financial settlement for the solicitor to best represent Gemma’s interest in the divorce proceedings.
– Implemented the transfer of 50% of husbands pension to a pension plan solely in Gemma’s name.
– Invested the proceeds of the 50% split of the family savings of £300,000 into a medium risk investment portfolio.

Outcome

– Gemma now has significant retirement planning to secure her income at retirement.
– Gemma now has a medium risk investment portfolio, which is reviewed annually.

IDFM (City) Ltd is an appointed representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited which is authorised and regulated by the Financial Conduct Authority.

Inheritance Tax Click Here

IDFM (City) Ltd

IDFM City

Case Study – Inheritance Tax

(To protect client confidentiality the detail of this case study has been changed)

Background

– Anne was a widow with 2 sons.
– Anne’s main house was valued at £1.5 Million and she had savings of £500,000.
– Anne’s income was £19,000 per year from pension and £7500 from savings interest.

Key Challenges

– Anne’s estate faced a huge inheritance tax bill on her death.
– Anne needed extra income. Ideally she wanted an income of £33,000 per annum.
– The savings interest Anne was receiving was reducing her personal allowance due to the ‘age allowance’ trap.
– Anne wanted to make gifts to her son to reduce her potential inheritance tax bill.

Action Taken

– Prepared an ‘Inheritance Tax Planning’ report setting out how to effectively use the allowances available to Anne to reduce the potential inheritance tax bill.
– Implemented an investment bond invested under a ‘discounted gift trust’ with her sons nominated as beneficiaries.
– An income of £14,000 per annum was set-up from the investment bond in favour of Anne.

Outcome

– After a period of time the estate liablility for inheriatance tax was reduced by the value of the bond investment of £500,000 plus any future growth.
– A tax deferred income of £14,000 per annum was paid to Anne from the investment Bond to supplement her existing pension.
– By removing the savings interest Anne’s personal allowance was fully restored and the ‘age allowance trap’ removed.

The FCA does not regulate some forms of Inheritance Tax Planning.

IDFM (City) Ltd is an appointed representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited which is authorised and regulated by the Financial Conduct Authority.

Insurance Settlement Click Here

IDFM (City) Ltd

IDFM City

Case Study – Insurance Settlement

(To protect client confidentiality the detail of this case study has been changed)

Background

– Michael & Mary have a son called James, who was involved in a serious car accident.
– James requires permanent care for the rest of his life.
– The driver of the other car was found to be responsible for the accident and a lengthy court case followed.
– James was finally awarded £1.8 Million in damages.

Key Challenges

– Michael & Mary were concerned with how to ensure the £1.8 Million was properly invested to ensure all James’ needs were met for the rest of his life.

Action Taken

– Established a ‘Financial Plan’ involving cashflow projections taking into account a range of different scenarios.
– Established the cost of public and private care options available to James.
– Established the rate of investment return required from the investment portfolio to meet James’ needs and requirements under all the different scenarios for the rest of his life.
– An low/medium risk investment portfolio was established with an income facility generating £50,000 per annum initially to meet the immediate care costs. A six monthly review service was established to monitor the performance of the portfolio and any changes with regard to James’ needs and requirements.

Outcome

– James’ investment portfolio was established with a low/medium risk investment portfolio with an income facility generating £50,000 per annum.
– The investment portfolio is reviewed twice a year. This provides peace of mind that the income is enough to sustain the cost of care and that the remaining investment fund is sufficient to meet the care costs for the rest of James’ life.

IDFM (City) Ltd is an appointed representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited which is authorised and regulated by the Financial Conduct Authority.

Investment Click Here

IDFM (City) Ltd

IDFM City

Case Study – Investment

(To protect client confidentiality the detail of this case study has been changed)

Background

– Married man aged 58/Semi-Retired
– Home £450K
– Investments £200K
– ISA £150K

Key Challenges

– Investments had been taken out over many years without a coherent strategy in place
– Investments had been originally set up for growth
– Now wanted additional income and needed to change emphasis of investment strategy
– Some poorly performing funds
– No idea of overall risk profile of portfolio

Action Taken

– Assessed investment risk profile and determined overall income level required from portfolio
– Restructured the ISA holdings to improve performance and increase income
– Analysed and evaluated existing investments and advised on an alternative investment strategy
– Scheduled regular review meetings and ongoing analysis of investment funds so that the portfolio could be monitored and updated in light of changing investment circumstances

Outcome

– Increased income in a tax efficient manner
– The new investment strategy improved performance and reduced risk/volatility
– Reduced overall tax liability
– Peace of mind that investments were being proactively reviewed

IDFM (City) Ltd is an appointed representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited which is authorised and regulated by the Financial Conduct Authority.

Retirement Benefits Click Here

IDFM (City) Ltd

IDFM City

Case Study – Retirement Benefits

(To protect client confidentiality the detail of this case study has been changed)

Background

– George and Julie have recently retired and George has accumulated a pension fund of £950,000.
– George is a smoker and has had some heart problems.

Key Challenges

– George was concerned that in the event of his death he wanted to ensure that Julie had sufficient income to sustain her standard of living.
– George & Julie also wanted to invest the tax free cash from the portfolio in a cautious investment portfolio

Action Taken

– Prepared a ‘options at retirement’ report, which set out all the annuity options available to George and Julie.
– The report included ‘impaired life’ annuity options, which produced a much higher income in retirement.
– An investment recommendation was presented with a cautious investment approach and an income facility to top-up the pension George would be receiving.

Outcome

– George received a much higher annuity under the ‘impaired life annuity’ than was available from a conventional annuity.
– A spouse pension provision was built into the pension so that in the event of George’s death Julie would receive 2/3rds of George’s pension for the rest of her life
– An investment portfolio was implemented with a cautious attitude to risk which yielded a tax free income of £11,000/year.

IDFM (City) Ltd is an appointed representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited which is authorised and regulated by the Financial Conduct Authority.

Sale of Business Click Here

IDFM (City) Ltd

IDFM City

Case Study – Sale of Business

(To protect client confidentiality the detail of this case study has been changed)

Background
– John and Helena had run a successful retail business for 20 years and they have recently sold the firm for £2.5M.
Key Challenges

– John was unhappy with the capital gains tax bill following the sale of his business and wanted to look at ways this could be reduced.
– John wanted to invest £1.5M in a low/medium risk portfolio that generated an income of £50,000 per annum

Action Taken

– A low/medium risk investment portfolio was established with an income facility generating £50,000 per annum. An annual review service was established to monitor the performance of the portfolio and any changes with regard to John and Helena’s requirements and circumstances.

Outcome

– John & Helena now have a low/medium risk investment portfolio with an income facility generating £50,000 per annum, which is reviewed annually. This provides peace of mind that their standard of living will be maintained for the rest of their lives.

IDFM (City) Ltd is an appointed representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited which is authorised and regulated by the Financial Conduct Authority.

Retirement Planning Click Here

IDFM (City) Ltd

IDFM City

Case Study – Retirement Planning

This case study is not a real-life example and is for guidance only. We can review your personal circumstances and advise you of the best course of action.

Background

– Married couple seeking business exit in 8 years
– Business owners
– Home £500K/Business £800K/Cash £80K/Investments £100K/Pensions £350K

Key Challenges

– Clients wanted to exit business in 8 years time in the most tax efficient manner
– Needed a joint retirement income of £50k (from all sources)
– Clients concerned that they might not have enough money to fulfil their objectives in retirement

Action Taken

– Produced a detailed financial planning report clearly demonstarting shortfalls in planning
– Liaised with their accountant and solicitor to ensure that the business was structured in the most tax efficient manner ready for retirement
– Created an investment strategy with an appropriate risk profile that would help maximise their income requirements
– Restructured their existing pensions which reduced overall charges while increasing flexibility
– Put in place a ‘review service’ to ensure the financial plan and investments were regular reviewed to take into account changing circumstances

Outcome

– Clients were actually able to retire after 5 years, ahead of schedule
– They achieved their required retirement income
– They had peace of mind that they had sufficient assets and income to provide them with the lifestyle they wanted in retirement

IDFM (City) Ltd is an appointed representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited which is authorised and regulated by the Financial Conduct Authority.


Please contact IDFM on 0845 2706160 for further information
or email peter@idfmcity.com