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How we helped Mr. & Mrs. Edwards sell their business, eliminate IHT and enjoy retirement

Mr & Mrs Edwards (not their real name) were in their mid-fifties when we first met them. Their manufacturing business had been good to them over the years but now they quite liked the idea of retiring, but they had some important questions that they needed to answer, including:

Could they afford to retire?

Could they sell their business? If yes, how?

Would they then have enough income to live comfortably for the rest of their lives?

Having talked to them in detail about their situation, concerns and aspirations we could see that:

They didn’t understand how their pensions worked or what they could do with them.

They were unsure about the tax implications of their current arrangements and any decisions they made

  • their affairs were somewhat disorganised
  • they had an Inheritance Tax (IHT) liability of £1.5m
  • they were unclear as to how much they would need to fund their retirement
  • they needed income of £50,000 net of tax over and above what they were drawing from their business
  • Mrs Client required clarity as to how much they could spend sensibly each year.


After running cashflow projections taking into account various strategies and tax scenarios, we:

  • recommended that they simplify and consolidate their investments
    each develop an investment strategy in line with their attitude to risk and their objectives
  • calculated the amount of money they were likely to need to fund their retirement expenditure and lifestyle
    how much money they could give away to reduce inheritance tax
  • arranged for their Wills to be re-drafting using special trusts, which immediately reduced their likely inheritance tax bill by £110,000 .
  • set up an insured trust, placing over £2m outside their estate, likely to result in a further reduction of inheritance tax
  • began discussions with their fellow business director regarding a vendor financed management buyout.


The results so far:

  • Their inheritance tax liability has been eliminated.
  • They have a tax efficient income stream that matches their lifestyle.
  • We have simplified the management of their investments and the investment reports they receive – Mr & Mrs Client now understood what they have.
  • We have reduced the risk and reward characteristics of their investment portfolio and Mr & Mrs Client now understood that this means.
  • They have peace of mind in knowing they and their children and grandchildren will benefit fully from the fruits of their labours.

30 June 2023

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