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Case Studies

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Pension & Retirement - Case Study 1

Background:

Dr M took her NHS Pension in 2018 however continues to work and run her dental practice.

Objective:

Dr M. still has approximately £150,000 of unused Lifetime Allowance (2018/19; £1,030,000). After contacting the NHS, Vance Financial Management recommended Dr M make a further contribution of around £75,000 into a Personal Pension. Dr M was concerned about Inheritance Tax and ensuring that any further contributions invested into a Personal Pension would go to her spouse and family on her death. Even though Dr M was in receipt of her NHS Pension, she still had income from her dental practice.

Solution:

Investing £75,000 into a Personal Pension was the most tax efficient way for her to invest capital and save on the inheritance tax. In doing so she made a contribution of only £60,000 and the pension provider paid an additional £15,000 into her pension. Dr M was also able to claim a further 20% tax relief (£15,000) via her annual tax return. All in all she received £30,000 in tax relief from HMRC.

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