What happens if I am looking at retirement?

At a time when life expectancy is rising and healthcare is forever evolving, many Britons are living for 20 to 30 years after they retire, which is why making adequate preparations for retirement is now more important than ever before.

Sound retirement planning is vital for anyone who wants to enjoy a financially comfortable life in their later years and leave behind a sizeable and tax-efficient legacy for their family.

However, from ISAs and savings products to property investments and pensions, the world of retirement planning is complex and confusing, as is thinking about the tax implications of your retirement planning activities.

Here are a few things to consider:

Business succession planning

If you are in business, what is your exit strategy? Will you hand the business over to the next generation or are you planning to sell? If you intend to hand the business over, do you have a viable succession plan? If you intend to sell, how will you value the business and find a suitable buyer, Are you aware of all the tax implications of the timing of disposals?

Selling your business

If you are intending to sell your business, it is important to be aware of the rules governing tax in the UK. Whether it is a management buyout or a sale to an outside party, it is important to consider your options well in advance of your intended retirement date.

Regardless of your circumstances, seeking appropriate tax planning advice and exploring which options are most appropriate to you is crucial to ensure that your business disposal is tax efficient.

Tax-efficient pension savings

Pensions can be one of the most important aspects of retirement planning. But equally important is structuring your investments in a tax-efficient way and ensuring that the contributions you pay benefit from tax relief where appropriate.

Life assurance and critical illness

It is important to consider the benefits of life assurance, long-term care and medical insurance in order to safeguard yourself and ensure that you and your family are guaranteed a good quality of life.

Investing in buy-to-let property

Investing in property can prove to be very lucrative, but those who do need to factor in the associated costs.

For example, there are the recent changes to Stamp Duty Land Tax (SDLT) on additional property purchases to consider, as well as the phasing out of mortgage interest tax relief if you intend to let out a property in order to supplement your retirement income.

Similarly, anyone who is investing in a property with a view to selling it on needs to plan ahead for the Capital Gains Tax (CGT) implications of this.  In some circumstances, Income Tax may be due on the gain.

Wills and Inheritance Tax planning

Drafting a Will can help you to ensure that your estate is passed on in line with your wishes when you die. However, you will need to think about the Inheritance Tax (IHT) implications of passing on your legacy and plan ahead accordingly.

Each individual in England and Wales is entitled to a tax-free allowance of £325,000, above which estates will attract IHT at a rate of 40 per cent.

Fortunately, there are various ways you can mitigate your IHT liability, such as by leaving money to a charity in your Will or passing property down to direct lineal descendants using the residence nil rate band (RNRB).

How can Brown Butler help?

Brown Butler and our colleagues at Brown Butler Pension and Investments can provide integrated advice to help you plan for retirement and maximise your financial security in later life.

For further details or to arrange a free, no-obligation meeting, please contact Lyndsey Shaw on 0113 246 1234.


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