EIS Case Study

Mr and Mrs J Both in 70’s

  • Combined Income of  £70,000.
  • Combined Tax bill £16,000
  • Portfolio of £800,000.
  • Premium Bonds £60,000
  • Oher Cash £160,000
  • Pension fund of £400,000. (still able to draw down £36,000 tax free.)
  • Concerned about IHT, but do not want to give away assets.

Solution

Take £48,000 from Premium Bonds  and invest into an EIS with a strategy aimed at exit in 3 plus years. use this investment to claim back tax paid in 2014.

Take £36,000  tax free cash from pension fund and use balance of Premium Bonds (£36,000 plus  £12,000) and invest into an EIS for the year  ending 2015.

End Result .

£96,000 ZERO rated for IHT after 2 years.

Tax saved £32,000. (even tax returned) Imagine a cheque back from the tax man.

A FULL AND COMPREHENSIVE MEETING NEEDS TO BE CARRIED OUT AND FULL FACTS OBTAINED ABOUT AN INDIVIDUAL’S CIRCUMSTANCES IS UNDERTAKEN BEFORE ANY RECCOMENDATION IS MADE. THIS EXAMPLE IS NOT A RECCOMENDATION.

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