The problem for Edward is that, as a high earner, much of his wealth is at risk of disappearing in taxes. Once you earn more than £100k, you’re effectively paying 60% tax on a portion of your money. So our challenge was to help his income grow in the most tax-efficient way, taking into account Income Tax, Capital Gains Tax and Inheritance Tax. On top of this, he was also in danger of putting too much money into his pension and breaching his annual allowance. At this level, it becomes very limited as to what you can do to still get tax relief back.

We spent some time putting together cash modelling scenarios to help Edward understand what options were available to safeguard the money he was accumulating to fund his retirement.  Rather than carry on paying into his pension and having to pay the annual allowance tax charge, it seemed he’d be better off putting the money into alternative investments instead. We also suggested he could invest some money in his wife’s name and make the most of her personal allowance. Some of his money is now also being diverted to help his children, who are 10 and 12, build up their own investments for the future. As well as making sense to utilise their tax allowances, it’s the perfect way to give them a good start in life.