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Both active and passive funds have a place in a portfolio

Passive funds are cheaper, but active funds can add value in specialised areas
Both active and passive funds have a place in a portfolio

John, age 62, and his wife, age 56, are retired. Their investments, which John has managed since he retired three years ago, provide all their income. Their children are financially independent, and their home is worth about £700,000 and is mortgage free.

Reader Portfolio
John and his wife 62 and 56
Description

Sipps, Isas and general investment accounts invested in funds, residential property, cash.

Objectives

£60,000 per year income, gift £300,000 to children, pass on Sipps and home to children, mitigate IHT.

Portfolio type
Inheritance planning

“We want income of £60,000 a year before tax,” says John. “We aim to get most of this by selling investments held outside tax-efficient wrappers, offsetting any gains against our annual capital gains tax (CGT) allowances. This amount equates to an average long-term investment return of around 3.3 per cent from our equity investments, including dividends and accounting for inflation. 

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