At a time when life expectancy is rising and healthcare is forever evolving, many Britons are living for 20 to 30 years after they retire, which is why making adequate preparations for retirement is now more important than ever before.
Sound retirement planning is vital for anyone who wants to enjoy a financially comfortable life in their later years and leave behind a sizeable and tax-efficient legacy for their family.
However, from ISAs and savings products to property investments and pensions, the world of retirement planning is complex and confusing, as is thinking about the tax implications of your retirement planning activities.
Here are a few things that your clients should consider:
Tax-efficient pension savings
Pensions are one of the most important aspects of retirement planning. But equally important is structuring investments in a tax-efficient way and ensuring that the contributions you pay benefit from tax relief where appropriate.
Life assurance and critical illness
It is important for your clients to consider the benefits of life assurance, long-term care and medical insurance in order to safeguard their quality of life.
Investing in buy-to-let property
Investing in property can prove to be very lucrative, but those who do need to factor in the associated costs of Stamp Duty Land Tax (SDLT), as well as the phasing out of mortgage interest tax relief if your client intends to let out a property in order to supplement their retirement income.
Similarly, anyone who is investing in a property with a view to selling it on needs to plan ahead for the Capital Gains Tax (CGT) implications of this.
Business succession planning
If your client is a business owner, they might wish to pass their business on to other members of their family when they retire, or sell the business on.
Whatever their wishes, they will need to seek specialist tax advice and plan ahead accordingly from an early stage to avoid facing unfavourable tax consequences.
Wills and Inheritance Tax planning
As you will of course be aware, drafting a Will ensures that your client’s estate is passed on in line with their wishes. However, they will need to think about the Inheritance Tax (IHT) implications of passing on their legacy and plan ahead accordingly.
Fortunately, there are various ways to mitigate IHT liability and we are happy to partner with your law firm to ensure that your clients’ tax burdens are minimised.
Good investment and future planning is hard work, which is why it is always best to seek specialist advice at the earliest possible opportunity. Get in touch with J W Hinks to find out how we can help your clients.