We Change Lives Series

An interview with John Winterbottom a Personal Wealth Adviser at Schroders Personal Wealth

  • Shunil Roy-Chaudhuri
  • 15 May 2022
  • 5 mins reading time

Can you tell me a bit about your clients?

These clients are a married couple. They were both professional people who had retired. I inherited the clients from an adviser colleague who was himself retiring. The couple had children and grandchildren and wanted to pass on the proceeds of their estate to them as tax-efficiently as possible.

What were their main concerns?

I visited them purely to conduct an annual review, but I checked their wider issues as part of my duty of care. We had set up a trust for them to pass on to their children. More than seven years had passed since the trust was created, which meant it was now outside of their estate and so would not be subject to inheritance tax (IHT) rules.

The problem they now faced was that, in the intervening time, their investment portfolio had grown, and this would now be subject to IHT in the event of their passing. As a result, their estate was less tax-efficient than the couple liked.

How did you help them?

When I pointed out they still had a potential IHT liability, the couple decided to create a new trust for their grandchildren. They were still around £200,000 above the IHT threshold. So they put £300,000 into the new trust, to try to prevent a new IHT liability arising due to potential future investment growth.

How did this help change their lives?

The new arrangement gave the couple the peace of mind that their grandchildren could benefit from their estate without them having to change their will. The financial gain for their grandchildren was the equivalent of around two years’ worth of the grandparents’ combined salaries.

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