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.
Sipps, Isas and general investment accounts invested in funds, residential property, cash.
£60,000 per year income, gift £300,000 to children, pass on Sipps and home to children, mitigate IHT.
“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.