Case Studies - Inheritance Planning 1

Mr B is an elderly client widower in failing health, with an estate of £1.3 million, of which £350,000 is the value of his house. £950,000 was invested in a mixed portfolio. Mr B has two sons. Under the terms of Mr B’s will, each son will inherit 50% of the estate. Mr B had no previous inheritance tax planning. It is not expected that Mr B will survive a period of seven years, to allow for conventional estate planning. Mr B’s priorities were to enjoy an income from his investments, to supplement his pension to a comfortable level and to reduce the potential impact of inheritance tax, as far as possible.

Specialist Solutions recommended that £950,000 should be invested in a capital protected investment structure, which provides a guaranteed income and which has the effect of transferring the capital outside Mr B’s estate after a survival period of two years.