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The Entrepreneur
The plan

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Bloomsbury discusses the various observations and conclusions with John, to identify how he feels about the available options.

After discussing the pros and cons of the various planning options and considering the overall position, John and his Bloomsbury planner formulate the overall financial plan incorporating the following main points:

• John and his wife should create new wills which maximise the use of their nil rate bands and thus save over £100,000 in inheritance tax.
• John and his wife should each create enduring powers of attorney, to allow each of them to deal with the other's affairs in the event of incapacity.
• John invests £4m into a broadly spread number of companies which qualify under EIS and AIM, and thus avoids paying tax of £0.8m in January next year. If John dies after two years or more, the assets will be exempt from inheritance tax and the original capital gains tax liability will also be avoided.
• John moves his personal and pension investment portfolios away from the private bank and stockbrokers who are currently managing them, into a combine nominee service provided by Bloomsbury 's third party specialists. The funds are reallocated to a 50/50 equity/bond split to reflect John's and his wife's risk and return profile. In addition all funds are allocated to passive institutional pure asset class funds, which both reduces the risk inherent in holding direct equities and reduces the expense ratio from 3.80% to 1.25% - an annual saving of 2.55%; a saving which no longer needs to be funded by a riskier investment strategy. John adds £200,000 of his cash to his long-term portfolio to bring the value of the long-term portfolio up to the £4m required.
• John applies for enhanced protection in his pension fund to exempt the fund from any potential tax change, should it exceed the lifetime limit when benefits are taken.