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Brian has recently suffered a heart attack. Although not debilitating, it was a warning that he needs to change his lifestyle. So, at the age of 60 he is considering retiring from the business. Jack retired a number of years ago but keeps an active interest in the firm and retains his original shareholding. Simon does not wish to retire yet at the age of 61. They have had an approach from their biggest rival to buy them all out for the price of £2 million. Brians share will come to £1,200,000. They accept the offer.

Brian has built up a considerable pension portfolio over the years and the valuation last month was as follows: -

His earnings over the last 3 years were as follows:

Even before adding the proceeds from the sale of the business, Brian had built up a fair sized investment portfolio, a summary of which is:

Judith is still lecturing at the university and is due to retire in 3 years time at the age of 60. Her earnings are £27,000pa, but she intends to continue to work for as long as she can.

All three of their children Andrew (31), Stephen & Phyllis (26) are independent, living away from home. Both Brian and Judith gave each of them £10,000 when they reached age 25.

The family home is currently worth £270,000 and Brian and Judith have no mortgage or other debts.

As for Life Assurance Policies, they only have the whole of life policy with the West Country mutual, which pays out whichever of them dies first. The sum assured payable on death is £150,000. As it is unit linked policy, it also has a fund value. Currently, it is £112,000. This monthly premium is still £350.

Both Brian and Judith have wills leaving their estate to each other on death.

1. Do you think you would have suggested anything different, had you known what was going to happen?

2. Do you know what would be the taxation position on the sale of Brian's shares?

3. What pension options are open to Brian?

4. If Brian were to die today, what would be the IHT position and how much tax would be paid?

Is it possible to reduce the tax bill?

Review of previous planning

Brian's pension options

Considerations

REMEMBER You should not use any information contained on this page as the basis of any action until you have discussed matters with your financial adviser.