Harry & Sally - Wayfinder · 21/10/2015 2 Photo by Jack Amick - Creative Commons...

21/10/2015

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Photo by MIKI Yoshihito (´･ω･) - Creative Commons Attribution License http://www.flickr.com/photos/7940758@N07 Created with Haiku Deck

Mike Hague From our files:

Harry & Sally

Photo by Marion Doss - Creative Commons Attribution-ShareAlike License http://www.flickr.com/photos/7337467@N04 Created with Haiku Deck

21/10/2015

2

Photo by Jack Amick - Creative Commons Attribution-NonCommercial License http://www.flickr.com/photos/20909379@N00 Created with Haiku Deck

Photo by Duncan Rawlinson - @thelastminute - Duncan.co - Creative Commons Attribution-NonCommercial License http://www.flickr.com/photos/44124400268@N01 Created with Haiku Deck

21/10/2015

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Photo by _jjph - Creative Commons Attribution-NonCommercial-ShareAlike License http://www.flickr.com/photos/23849931@N08 Created with Haiku Deck

•People

•Pounds

•Planning

21/10/2015

4

1 Establish and

define the client-planner

relationship

2 Gather client data

including goals

3 Analyse and

evaluate your financial position

4 Develop and

present Financial Planning

5 Implement the

Financial Planning recommendations

6 Monitor the

Financial Planning

recommendations

1 What do you

want to achieve?

2 Where are you now?

3 Analysis and projections

4 What

alternatives should we consider?

5 Implement

the planning

6 Monitor,

evaluate and review over time

21/10/2015

5

Objectives Current Position Analysis and projections

Develop Action Plan

Implementation Review

21/10/2015

6

Three wishes (Assumptions)

• Harry and Sally are in a “steady state.”

• FCA return assumptions turn out to be real.

• Tax etc. tomorrow is the same as tax etc. today

Photo by Sebastiaan ter Burg - Creative Commons Attribution-ShareAlike License http://www.flickr.com/photos/31013861@N00 Created with Haiku Deck

21/10/2015

7

What needs to happen?

What other information do you

need?

What do they want to achieve?

Objectives Current Position

Analysis and projections

Develop Action Plan



Develop Action Plan


Assets House, joint tenants, £400,000 Cash ISAs £20,000 each. Money from time of house move and business start up. Put here “just in case” General chattels – not a lot really Equal Shareholding in AlphaOmega Ltd No pensions other than the state pension entitlement

Liabilities None after this month’s mortgage payment

Income Salary £20,000 each Dividends – regularly £10,000 each plus ad hoc for kids etc.

Expenditure Been difficult to pin down but seems to be £40,000 pa

21/10/2015

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Develop Action Plan


Balance sheet

Assets Cash at bank £200,000 Debtors £300,000 Fixed Assets £30,000

Liabilities Trade Creditors £250,000 Corporation tax £20,000

AlphaOmega

Profit Regularly £100,000 pa


Develop Action Plan


Income Harry

Salary £20,000

Dividend £10,000

State Pension

Sally

Salary £20,000

Dividend £10,000

State Pension

Total Income £60,000

Expenditure Tax estimate

Harry

Salary/pension £1,880

Dividend £375

Sally

Salary/pension £1,880

Dividend £375

General Living Costs £40,000

Total Expenditure £44,510

Surplus (shortfall) £15,490

Harry Sally Joint Total House £400,000 £400,000

Savings £20,000 £20,000 £40,000

Business Shares £130,000 £130,000 £260,000

£150,000 £150,000 £400,000 £700,000

21/10/2015

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Develop Action Plan


Age 50 51 52 53 54 55 56 57 58 59 60

Income

Harry

Salary £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000

Dividend £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000

State Pension

Sally

Salary £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000

Dividend £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000

State Pension

Total Income £60,000 £60,000 £60,000 £60,000 £60,000 £60,000 £60,000 £60,000 £60,000 £60,000 £60,000

Expenditure

Tax estimate

Harry

Salary/pension £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880

Dividend £375 £375 £375 £375 £375 £375 £375 £375 £375 £375 £375

Sally

Salary/pension £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880

Dividend £375 £375 £375 £375 £375 £375 £375 £375 £375 £375 £375

General Living Costs £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000

Total Expenditure £44,510 £44,510 £44,510 £44,510 £44,510 £44,510 £44,510 £44,510 £44,510 £44,510 £44,510

Surplus (shortfall) £15,490 £15,490 £15,490 £15,490 £15,490 £15,490 £15,490 £15,490 £15,490 £15,490 £15,490


Develop Action Plan


Age 50 51 52 53 54 55 56 57 58 59 60

Income

Harry

Salary £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000

Dividend £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000

State Pension

Sally

Salary £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000 £20,000

Dividend £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000 £10,000

State Pension

Total Income £60,000 £60,000 £60,000 £60,000 £60,000 £60,000 £60,000 £60,000 £60,000 £60,000 £60,000

Expenditure

Tax estimate

Harry

Salary/pension £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880

Dividend £375 £375 £375 £375 £375 £375 £375 £375 £375 £375 £375

Sally

Salary/pension £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880 £1,880

Dividend £375 £375 £375 £375 £375 £375 £375 £375 £375 £375 £375

General Living Costs £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000

Total Expenditure £44,510 £44,510 £44,510 £44,510 £44,510 £44,510 £44,510 £44,510 £44,510 £44,510 £44,510

Surplus (shortfall) £15,490 £15,490 £15,490 £15,490 £15,490 £15,490 £15,490 £15,490 £15,490 £15,490 £15,490

21/10/2015

10

£36,400

£53,134

£70,208

£87,631

£105,408

£123,548

£142,058

£160,945

£180,217

£199,882

£219,948

£0

£50,000

£100,000

£150,000

£200,000

£250,000

50 51 52 53 54 55 56 57 58 59 60

Closing Capital


Develop Action Plan




Develop Action Plan


Age 60 61 62 63 64 65 66 67 68

Income

Harry

Salary £20,000

Dividend £10,000

State Pension £7,865 £7,865

Sally

Salary £20,000

Dividend £10,000

State Pension £7,865 £7,865

Total Income £60,000 £0 £0 £0 £0 £0 £0 £15,730 £15,730

Expenditure

Tax estimate

Harry

Salary/pension £1,880 £0 £0 £0 £0 £0 £0 £0 £0

Dividend £375 £0 £0 £0 £0 £0 £0 £0 £0

Sally

Salary/pension £1,880 £0 £0 £0 £0 £0 £0 £0 £0

Dividend £375 £0 £0 £0 £0 £0 £0 £0 £0

General Living Costs £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000

Total Expenditure £44,510 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000 £40,000

Surplus (shortfall) £15,490 -£40,000 -£40,000 -£40,000 -£40,000 -£40,000 -£40,000 -£24,270 -£24,270

21/10/2015

11



Develop Action Plan


Closing Capital



Develop Action Plan


Working

Not Working

Pensioners

Income surplus/shortfall

21/10/2015

12



Develop Action Plan


Working

Not Working

Pensioners

Income surplus/shortfall

Paying for care



Develop Action Plan


Increase net income by c.£33,500 pa until age 60

Paying for care

21/10/2015

13



Develop Action Plan


Sales Minus

Cost of sales Gives

Gross Profit Minus

Overheads Gives

Operating Profit Minus

Taxation Leaves

Net Profits



Develop Action Plan


Sales Minus

Cost of sales Gives

Gross Profit Minus

Overheads Gives

Operating Profit Minus

Taxation Leaves

Net Profits

Reward for work done: Salary Bonus Benefits in Kind Pension

Reward for risk taken Share of profit (dividend)

• National Insurance Contributions • Employer • Employees

• Income Tax

Dividend Tax

21/10/2015

14



Develop Action Plan


An extra £100 as salary Personal Allowance

Basic Rate Higher Rate

£100k Rate Additional Rate

Corporation Tax

Employer's National Insurance Contributions

Employee's National Insurance Contributions

Income Tax

Dividend Tax

Total

"Net" Salary



Develop Action Plan


An extra £100 as salary Personal Allowance



Corporation Tax £0.00

Employer's National Insurance Contributions £3.24

Employee's National Insurance Contributions £2.88

Income Tax £0.00

Dividend Tax £0.00

Total £6.11

"Net" Salary £93.89

21/10/2015

15



Develop Action Plan


An extra £100 as Salary Personal Allowance



Corporation Tax £0.00 £0.00

Employer's National Insurance Contributions £3.24 £13.80

Employee's National Insurance Contributions £2.88 £12.00

Income Tax £0.00 £20.00

Dividend Tax £0.00 £0.00

Total £6.11 £45.80

"Net" Salary £93.89 £54.20



Develop Action Plan





Corporation Tax £0.00 £0.00 £0.00

Employer's National Insurance Contributions £3.24 £13.80 £13.80

Employee's National Insurance Contributions £2.88 £12.00 £2.00

Income Tax £0.00 £20.00 £40.00

Dividend Tax £0.00 £0.00 £0.00

Total £6.11 £45.80 £55.80

"Net" Salary £93.89 £54.20 £44.20

21/10/2015

16



Develop Action Plan





Corporation Tax £0.00 £0.00 £0.00 £0.00 £0.00

Employer's National Insurance Contributions £3.24 £13.80 £13.80 £13.80 £13.80

Employee's National Insurance Contributions £2.88 £12.00 £2.00 £2.00 £2.00

Income Tax £0.00 £20.00 £40.00

Dividend Tax £0.00 £0.00 £0.00

Total £6.11 £45.80 £55.80

"Net" Salary £93.89 £54.20 £44.20



Develop Action Plan





Corporation Tax £0.00 £0.00 £0.00 £0.00 £0.00



Income Tax £0.00 £20.00 £40.00 £60.00 £45.00

Dividend Tax £0.00 £0.00 £0.00 £0.00 £0.00

Total £6.11 £45.80 £55.80 £75.80 £60.80

"Net" Salary £93.89 £54.20 £44.20 £24.20 £39.20

21/10/2015

17



Develop Action Plan


An extra £100 as Dividend Personal Allowance



Corporation Tax £20.00 £20.00 £20.00 £20.00 £20.00



Income Tax £0.00 £0.00 £0.00 £0.00 £0.00

Dividend Tax £0.00 £6.00 £26.00 £32.00 £30.48

Total

"Net" Dividend



Develop Action Plan





Corporation Tax £20.00 £20.00 £20.00 £20.00 £20.00



Income Tax £0.00 £0.00 £0.00 £0.00 £0.00

Dividend Tax £0.00 £6.00 £26.00 £32.00 £30.48

Total £20.00 £26.00 £46.00 £52.00 £50.48

"Net" Dividend £80.00 £74.00 £54.00 £48.00 £49.52

21/10/2015

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Develop Action Plan





Corporation Tax £20.00 £20.00 £20.00 £20.00 £20.00



Income Tax £0.00 £0.00 £0.00 £0.00 £0.00

Dividend Tax £0.00 £6.00 £26.00 £32.00 £30.48

Total £20.00 £26.00 £46.00 £52.00 £50.48

"Net" Dividend £80.00 £74.00 £54.00 £48.00 £49.52

"Net" Salary £93.89 £54.20 £44.20 £24.20 £39.20



Develop Action Plan


An extra £100 Pension Contribution

Tax

Personal Allowance

Basic Rate Higher Rate £100k Rate Additional Rate

Corporation Tax £0.00 £0.00 £0.00 £0.00 £0.00



Income Tax

Dividend Tax £0.00 £0.00 £0.00 £0.00 £0.00

Total

"Net" Pension

21/10/2015

19



Develop Action Plan



Tax

Personal Allowance


Corporation Tax £0.00 £0.00 £0.00 £0.00 £0.00



Income Tax £0.00 £15.00 £30.00 £45.00 £33.75

Dividend Tax £0.00 £0.00 £0.00 £0.00 £0.00

Total £0.00 £15.00 £30.00 £45.00 £33.75

"Net" Pension £100.00 £85.00 £70.00 £55.00 £66.25



Develop Action Plan



Tax

Personal Allowance


Corporation Tax £0.00 £0.00 £0.00 £0.00 £0.00



Income Tax £0.00 £15.00 £30.00 £45.00 £33.75

Dividend Tax £0.00 £0.00 £0.00 £0.00 £0.00

Total £0.00 £15.00 £30.00 £45.00 £33.75

"Net" Pension £100.00 £85.00 £70.00 £55.00 £66.25

"Net" Dividend £80.00 £74.00 £54.00 £48.00 £49.52

"Net" Salary £93.89 £54.20 £44.20 £24.20 £39.20

21/10/2015

20

£0.00

£10.00

£20.00

£30.00

£40.00

£50.00

£60.00

£70.00

£80.00

£90.00

£100.00

Personal Allowance Basic Rate Higher Rate £100k Rate Additional Rate

"Net" Pension "Net" Dividend "Net" Salary

21/10/2015

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What do they want to achieve?



Develop Action Plan


Pass “Harry’s share” to his children and “Sally’s share” to her children.



Develop Action Plan


Other things

• Check • Wills

• LPAs

• Consider • What if…

• Life Cover

• CIC Cover

• Income protection

21/10/2015

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Harry & Sally - Wayfinder · 21/10/2015 2 Photo by Jack Amick - Creative Commons...

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