Phil and Matt were directors of a successful family business. The company was making good profits but had done little planning in the early years; they had instead focused on growing the business and making things stable.
Phil and Matt were comfortable from a personal income perspective but had neglected their own financial position. They had the mantra “my business is my pension” ringing in their ears!
However stable a business, unforeseen circumstances can derail its fortunes very quickly. Both Phil and Matt had young families, so protection in the short and long term was essential.
Phil and Matt were both concerned about what would happen in the event of their untimely deaths, as they were both the sole earners in their respective families. They wanted to understand how their wives would be compensated in terms of the value of the business and future earnings.
On the other hand, Phil and Matt also wanted to know if the eventual sale of the business would be sufficient to support their lifestyles through retirement.
We recommended that the company effect a relevant life policy on behalf of each director. The premiums are an allowable expense, and there’s no benefit in kind tax charge on the directors. The rates are based on standard term assurance, so there is no premium payable.
We also suggested that they individually effect shareholder protection policies for their respective share in the business.
Employer contributions to pension policies were also suggested in order to take advantage of the carry forward rules.
In order to make the company more like a trading entity, we recommended an investment in BPR strategies, which, after the two-year qualifying period, would negate the impact of the investment company concerns. Significantly, they did not have to expose themselves to increased risks to achieve the BPR status.
Should either Phil or Matt die, there will be a significant capital sum provided from the two protection policies.
In terms of the shareholder protection, the surviving director will own 100% of the company and the deceased director’s widow will have been appropriately compensated.
Large pension funds will have been created, which may never need to be touched and therefore represent a further Inheritance Tax benefit.
As the company is deemed to be trading, following the BPR strategy, should they sell the business, they will get the most tax-efficient deal.
There wasn’t anything wrong with their situation before, but our advice has improved their overall position considerably.
What our clients say
The people we help are at the heart of what we do. Here are some of their testimonials.
I knew I needed to begin saving and planning for the future but didn’t know where to start. Stratton helped me to understand my finances and put together a savings plan that is affordable and works for me. I now have and an ISA and a pension, and whilst retirement is many years away, I have the peace of mind that I am saving for my future. I look forward to working with them for many years to come.
Martin Corrigan -
A client since 2016
I have been impressed with the advice and service provided by Stratton Wealth Management and have always found Darius to be approachable, dependable and highly professional in his approach. It is reassuring to be able to have such a high level of confidence and trust when it comes to financial advice.
Russell Jones -
A client since 2018
Many thanks indeed for your in depth report for my client Mrs H – it is most thorough and above all readable. This might sound particularly strange; however you may well gather that in my profession we see many such reports, and I often feel that if the adviser fills it with charts and graphs it evidences a level of research. In truth most of what is produced is readily obtainable from the internet.
I would like to thank you (and your organisation) for your prompt and professional attention to my requirements on behalf of my client. As a practice we shall definitely be putting Stratton Wealth Management on our “preferred supplier list".
Colin Dunstall, Donaldson Dunstall Solicitors -
A client since 2015
I would highly recommend Darius and John. I’ve used a financial adviser previously and could never get in contact with them when I needed their help. Stratton Wealth Management have been excellent from the start. They are always available to talk, and they also don’t talk in financial jargon!
Dave Rigby -
A client since 2015
Having recently transferred my financial management to Stratton Wealth Management, I have been extremely impressed with the highly professional service I have received. I feel I have been fully involved in all decision making, and the company's highly skilled advisers have shown commitment and patience in any dealings I have had with them. I have also always found them to be easily accessible for any discussion I may require.
Denise Thornton -
A client since 2019
As a business owner and father of four children, finances are usually the last thing we think about. Stratton oversees and manages our finances, both in terms of advice for my business and our personal investments. It is comforting to know that our retirement, investment and life insurance planning has been taken care of. Darius and John are always so efficient in dealing with our affairs. As someone with no real understanding of the ins and outs, it has been fantastic to have experts giving us great advice and making sure our best interests are always the top priority.
Lee and Claire Parkinson -
Clients since 2016
Darius deals with my family’s finances and is a very trusted adviser. We meet a number of times a year, but I know I can call him any time if I have any questions. He is proactive, helpful and friendly!
Jonathan Dennis -
A client since 2019
Darius has been our adviser for a number of years, and when he told us he was starting his own firm, we had no hesitation in moving with him. We had a number of areas that we needed help with, including the complexities around an employee share scheme, investments for us and our new child, in addition to our retirement planning. Darius has continually provided us with a first-rate level of service and we would highly recommend Stratton.
Eamon and Holly O’Hara -
Clients since 2017
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