How we helped Suzanne and Ben to pay less tax

Making it possible to achieve security in the long-term future

Without professional help, it’s very easy to find you’re paying more tax than you need, as most people are unaware of all the allowances available. Expert financial planning can help to make the most of current rules and allowances to reduce tax for couples and families.

Why Suzanne and Ben needed our help

When Ben and Suzanne first contacted us, they wanted to know if they could afford to help with the cost of Saffron’s wedding, give Thomasina an equivalent amount, and make sure they still had enough for a comfortable retirement. They had just bought a new home, which needed a complete renovation. They hadn’t yet sold their existing home, as they needed to continue living there until the new house was ready.

Thinking about these plans gave them a wake-up call. They realised they had no idea whether they were paying too much tax or missing out on interest – or when they could afford to retire. 

Suzanne and Ben had always been sensible about money, but had never used financial planning; they made regular payments into a savings account with their bank and added extra whenever possible. They now realised this might not be enough, and the time had come to consult an expert.

Our Canaccord Wealth solution

After carrying out a cash flow planning exercise, we advised Suzanne to pay more into her pension. The personal allowance is reduced by £1 for every £2 of income above £100,000, so Suzanne’s income of £125,000 meant she’d lost almost all her personal allowance. Contributing £60,000 (her current annual allowance) to her personal pension would bring her adjusted net income to below £100,000, reinstating her personal allowance and reducing her tax bill. With the savings invested in a pension wrapper, the money would grow free of income, capital gains and (currently) inheritance tax.  

We encouraged both Ben and Suzanne to take money from their savings account to make full use of their Stocks and Shares ISA allowances (currently £20,000 per person per year), as these grow free of income and capital gains tax.

We also noted that they hadn’t sold their current home before buying the new one, so they had paid the higher rate of stamp duty land tax. They could reclaim this if their old property sold within three years of buying the new one – we promised to remind them!

They arranged to give both daughters £5,000 using the wedding gift allowance, plus £3,000 per year within the annual exemption. 

What happened next

Ben and Suzanne were very pleased with our advice, feeling fully empowered and informed to make decisions with their money, and happy to leave all the arrangements to their Canaccord Wealth Planner. We kept in frequent touch, to reassure them that everything was going well, and that they could afford to help towards their daughter’s weddings and go travelling while the builders put the finishing touches to their new house. 

Keeping in touch

We now meet the couple every year. We check their risk strategy and cash flow models and ensure their portfolio still makes full use of pension and ISA allowances. We alert them to changes that might affect them, and reassure them when markets fall, explaining what is happening and why.