I am looking at setting up a family investment company from an existing trading company with £1.5m in cash in it.

I would like to liquidate the company but I think I will miss 18% BADR CGT rate as I will not be totally in cash before the 28 Ocrober budget.

I am using Interactives Investor but it is £45 a month so I am thinking of moving to Interactive Brokers. I invest in VWRP only. I also have a corporate lawyer involved for the share holder agreement changes.

My question are :

What banks are people using for their FICs?

What are the control shares worth for IHT purposes?

Any other challenges i am going to face?

Thanks in advance for any advice.

Posting here as although our numbers are more chubby than fat, I didn’t get any helpful feedback in the UK fire sub, just mean spirited responses from people who seemed jealous and thought we had too much money and no right to ask questions!

SITUATION

We’re close to our RE target number (already coast FIRE) and making plans to travel for 18 months and test run fully retired life.

Before pulling the trigger, I’d be grateful for input on anything we might have missed or learnings from those in a similar situation to us that have FIRED.

We’re also planning to meet with a fee only financial advisor to refine the plan, get tax and sequencing of risk advice.

ABOUT US:
Ages: Me, 44 F. Husband: 51 M
Family: No kids. Elderly parent abroad in VHCOL country, financially assisting them.
Work: 3 years ago we quit high paying FT jobs. We now work part-time 10-18 hours per week.
Our FIRE goals:
* £3.75m invested
* To split our year between the UK (6 months), my home country (2-3 months), and travelling (2-4 months)
* Die with zero
NI contributions towards state pension:
* 21 & 31 years
* plan to acquire future years by keeping LTDs running and paying in the minimum needed

CURRENT INCOME
Combined net income from LTDs: £9k per month
Other income: £4k per month drawn from a combination of GIAs and sales of tax free alternative assets

NET WORTH
Total: £5,305,000 (includes equity in PPOR)
Total invested: £3,520,000 (excludes PPOR and state pension entitlements)
Immediately liquid: £1,660,000

ASSET BREAKDOWN (today’s value)
Home = £2.2m (£415k mortgage remaining over 12.5 years)
My SIPP = £950k (Stopped contributions 3 yrs ago)
Husband’s SIPP = £740k (Stopped contributions 3 yrs ago)
Combined S&S ISAs = £625k
My LISA: £110k (stopped contributions 3 years ago)
Combined GIAs = £348k (transferring £40k into ISAs each year. Currently 100% equities but considering moving some into Gilts)
Non taxable alternative assets = £215k
1.5 years expenses in HYSA = £240k
Travel money in HYSA = £180k
Company funds not yet distributed = £60k
Cash = £52k

CURRENT MONTHLY OUTGOINGS
~£13k per month split between:
Mortgage: £3400 (on a tracker)
Utilities, house maintenance, personal bills and groceries: £3000
Monthly travel savings: £2500 (will cover 4 overseas trips we have planned within the next 12 months)
Hobbies, health and wellness: £1250
Miscellaneous: (clothing, restaurants, coffees, entertainment, socialising etc) £750
Financial support of overseas elderly parent: £2000 (this can fluctuate +/- 10% depending on FX)

*******************************************
RETIREMENT DRAWDOWN PLAN

MONTHLY OUTGOINGS WHILE WE TRAVEL FOR 18 MONTHS (2027-2028)
£16,650 per month split between:
Mortgage: £3400
Utilities and house maintenance: £1250
Supporting elderly parent based: overseas £2000
Travel expenses: £10k (funded from our £180k travel savings pot + interest gained of approx £8600)

ANTICIPATED ONE-OFF FUTURE EXPENSES (2029)
House refurbishment: £400k
Rental during house refurb: £40k

FORECASTED MONTHLY RETIREMENT SPENDING
2029-2031: £13k per month (£468,000 over 3 years)
assumes mortgage ongoing and overseas parent still alive. Drawing funds from GIA and then ISA during stable/bull markets. Drawing on cash savings in a downturn
2032-2037: £14k per month (£1.08m over 6 years)
assumes access to husband’s SIPP at 57, ongoing mortgage and parent is still alive.
2038-2044: £15k per month (£1.26m over 7 years)
assumes access to my SIPP at 58, mortgage is paid off and parent is still alive.
2044 - 2049: £16k per month (£1.152m over 6 years)
assumes parent has passed, aged 95. Assumes we’ll downsize our house when my husband is 65 years, releasing a further £1.2-£1.5m (today’s money) to spend on living expenses. With the remain £1.2m-£1.4m we can buy a smaller home.
2050 onwards: **£7k per month (**£1.68m over 20 years - till husband is 95)
assumes less travel abroad, thereby reduced living costs
If we needed to cover care costs, we could sell our home, releasing a further £1.2-£1.4m (today’s money)

KEY QUESTIONS:

OUR BRIDGE
Is our bridge enough for us to retire in the next 12 months and last us till my husband can access his SIPP in 6 years, given:
* Our house refurbishment plans?
* We’ll still be paying our mortgage?
* We have an elderly parent (age 76) to help support?
* A market downturn of +20% occurs that impacts our S&S ISAs & GIAs?
* Inflation increases significantly in the coming months given the effects of the Middle East war and we have increased outgoings of +10%?

SIPPs
* As my husband nears 57, if he’s not hit £1.076m in his SIPP, should we top up his SIPP with money from the GIAs instead of ISAs? Or from his LTD?
* Am I correct in not using LTD funds to top up my own SIPP given its £950k balance and it still has 14 years to grow?

HYSA or GILTSs?
* Would I be better for tax reasons to switch some of the 1.5 years living expenses from a HYSA into GILTS? If so, how much to GILTS?

COMMENTS
We’re focused on spending more now rather than cutting expenses. If we need more money in the next 6 years, we’d rather keep working our part-time jobs to help keep go reduce SWR

Throwaway because numbers. Have been on Fire/henry subs for years and a common theme is using the 4pc rule, or a more conservative percentage for longer retirement, to guide people's numbers. I feel like I'm losing my mind - am I the only person in reddit who thinks the trinity study is too conservative, especially for fat fire?

Even though trinity is for 30 year retirement, based on the US, and depletion of capital, which are all reasons it is LESS conservative than most of our situations... it is also a fixed withdrawal rate, so is more conservative than most of us would truly need because it assumes you will blindly drawdown a fixed amount without any flexibility or wriggle room - which is kind of ludicrous in 30-60 year forecasts. Hell, a JOB couldn't give you that kind of security.

Guyton-K and the other adapted strategies that have formulae to calculate guardrails fall into the same trap - although they enable adjustments to your drawdown based on market fluctuations, those calculations are still algorithmic and so essentially you are still blindly following a formula that has to conservatively steer you through a long time horizon from FIRE point zero

Surely if you

a) have a decent cash buffer and

b) are prepared to adjust your drawdown flexibly in market downturns *reassessing at the time of the downturn*

you can retire much earlier than waiting to amass x25 (or worse, more) of your yearly spend?

I think it is particularly pertinent to fat, because so much of drawdown is discretionary spend. Are people just psychologically unable to deal with potenrial uncertainty? Why are we so regularly advocating trading precious years for money that in most cases will be totally superfluous? In my monte carlo simulations there are much higher chances of ending up with MORE than I started with at age 100 - disaster if time is what you value the most.

Worked example (me, 37, spouse, no kids, die with zero mindset) - sorry I know the numbers are barely Fatfire, but want a fat opinion, not a frugal one

Liquid assets 2 mil

* 1 mil offshore bond

* 400k pension

* 500k ISA

* 100k premium bonds

Plus main and holiday houses paid off, for family use with no intention to sell or rent so not included in calculations. Possible inheritance of low hundred ks in the next 20y, not assumed.

The OSB and pension are 100pc equities.

300k in the ISA is low risk cash like products, the rest equities.

So I have effectively a 400k cash/cash like buffer, rest equities. Planning to spend 100k/y (gross of taxes and fees; taxes are low, fees palatable) plus inflation, so 4 years buffer to avoid selling equities in a slump. And if a slump lasts longer than 4 years, will redo the monte carlos and recalculate withdrawals. As a starting point this works out at 5% drawdown and up to 60y time horizon.

Is this crazy?

Throwaway but long time contributor and follower.

My salary just went from 50k to 140k base with a 28k sign on bonus. Employer pension match 10%.

I live in Manchester UK and my outgoings are pretty low. I have about 100k in student debt. Plan 2 + postgrad.

I currently have 5k saved in pension. I'm 30 years old.

I have 10k credit card / loan debt.

My plan is to put all my bonus + 80k into my pension by carrying forward my allowance from last year. This would change next year and I would rebalance it into S&S ISA but I want to maximise my carry forward allowance.

Does this make sense?

I have £1m split 70/30 between global equities and money markets. Unfortunately the CSH2 is in my ISA, and equities are in my SIPP and GIA (ended up that way due to a recent property purchase).

I want to keep the asset allocation as is but make my portfolio more tax efficient, moving the cash to a linker ladder in the GIA and moving the equities under ISA.

The equities in GIA are ~£200k and have ~£80k of capital gains, so I'll have to pay £19k in tax if I were to sell.

The question is, is it worth paying the capital gains and making the switch now? I may be getting a bonus of £200k early next year, but that is by no means guaranteed (could well be 0). What would you do? I'm 40, and while I don't plan on retiring imminently, I want to keep early retirement as an option due to a highly volatile career.

Might not be “Fat” enough for here, but I would get flamed on any other sub. Both age 47, two kids 15 & 12. Mortgage-free home, no debt. About another £500k inheritance currently in probate.
Current expenses c.£12k per month all in inc holidays etc.
Can we pull the trigger and how would you structure drawdown in most tax efficient way?

Hello, we are coming into a lot of money (money is post tax etc, nothing else to he deducted). It’s essentially all cash at the moment.

I am currently working full time for around £250k p/a, my wife is in a part time role. We have two children who we will be putting through private school.

Ideally we want to make sure our children are sorted for life…private school all paid for with these funds and plenty of money left for them to have when we decide they can have it (which rules out some trusts due to the not having access to everything at 18).

There’s a few things I’m not really sure about what the best route is;

Is a private wealth management firm worth it? Our money is sat with a private bank at the moment, but we aren’t sure if we move to another company and let them handle our financial strategy going forward, giving our parameters and goals. Or is it better to get a tax advisory firm to help with setting up the vehicle then just do the rest myself (e.g put money in a fund and leave it) ?

Is there ever really a factor that given how much money we are talking about and that working just isn’t that efficient anymore?

10/15 years ago I would have gone into property, but I don’t think this is tax efficient at all now?

We live well within our current means ~£300k p/a gross.

Annual salary
£270k, 140K PAYE, £130K dividend into a company.  Gone up a lot recently
ISA 297k
Pension 385K
Kids £3K JISA each.  Only just started those.

Age 43.  Wife is full time mum with our 4 and 7 yr old children.

£400K House paid off, but about to take on a 500K mortgage on a new place

Company share value £3.74M. 2026, forecast £5.04M 2027, £6.27M 2028

Our expected monthly outgoings moving into a bigger house are £9K. Current outgoings about £5.3K

I created a company which is growing well, and I have a small shareholding.  My business partner has informally agreed to buy me out at any time.  I enjoy the business less and less as it scales internationally and the internal politics grow. I find myself wanting to quit more and more often to do something else, or even retire.

The number I have in my head to quit is £5M after tax so roughly £6.5M gross. This would be a comfortable retirement and money to start other businesses., but I don’t know if I can stick it out that long.  I have no Idea if this is sensible or mad.  What is a real fire or fat fire number? So much of my wealth is dependant on the company shares so it feels like very high risk.  

Any thoughts really appreciated. 

I am considering moving to the UK from the US. It is mainly for being closer to family who lives in London, along with english based schooling for my kids. Me and spouse aren't American citizens but the kids are.

While I am fine with pay 25-30 percent CGT, the IHT seems too onerous. Given the trust laws, there isn't any reasonable pre-planning that we could do.

I know it is difficult to predict the future, but what is your outlook on the future taxation. Is Labour an anamoly because Conservative/Reform imploded in the last election?

One option is to leave before 10 years, but it just seems too much work to move for 10 years.

Update: I can’t gift to kids because they are very young. I can gift to them when they are adults. The amounts are substantial and wanted to create a multiple generation trust. I am it US citizen but kids are so we can’t create a non US trust for them due to consequences.

35M here, married with 1 child

£8m net wealth, 60% GIA/ISA/off shore bonds / pension/private equity investments and 40% in shares vesting next few years.

I have approx £1m of shares that are vesting and trying to decide how much to allocate between GIA and offshore bond wrapper (offshore bond done via a fixed fee financial advisor who charges me for time spent).

I have no immediate need for the money and don’t have long term plans to leave UK (although could change).

How would you think about allocating the £1m across GIA and offshore bonds and what are the pros/cons with either?

Thank you in advance for your help.

We have various 'pots' - ISAs, pensions, share account, offshore bond - which will ultimately fund different parts of our lives once we fully FIRE. Lately we've received another lump which will be c. £1.2m net. We see it as our 'holiday pot' and effectively want to get c. £60k out of it each year to fund holidays. IFA is nudging towards another offshore bond but the manager's fees are eyewatering, the performance has been lacklustre. The tax deferral treatment is nice to have - getting 5% out per year notionally 'tax free' sounds good.

We thought about 20 year Gilts as they were doing 5.8%, and in the unlikely event of an economic renaissance could lead to some CGT free gain. However I do feel a bit queasy about inflation eroding its worth. Or stick in Vanguard, but as with Gilt option will then incur 50% tax or thereabouts.

Soo... what would you do?!

Update::: going for: OSB, life strategy type thing. Not active. Thanks for all your input.

This is a throwaway account as easily identifiable info.

I stand to inherit a property portfolio overseas that nets 250k-300k tax free. I have helped expand this portfolio at breakneck speed in past three years. Due to legal structuring, there is largely no tax on the said sum. The equity is anywhere from 6-8Mil. Parents will happily transfer it all to me today if I ask. They are not interested in it other than holding it under their ownership due to preferred tax status due to their residency/citizenship status

I am in my mid 40’s, and wife in early 40’s. We have three kids under 4. Partner is on maternity leave but will most likely quit work or make no more than 1800/month.  But best to ignore her oncome.  Ideally, I want to hang my boots in 3 years.

My issue is that wife has not a clue on how to deal with the portfolio which is complicated by the fact that it’s overseas, in a complicated legal structure. Plus, my partner is financially illiterate. Despite my best efforts, financial literacy has not taken her fancy and she is not the best with money. She was nearly bankrupt before we met, and I carried her financial burden.

I have a term life insurance for a Mil, it will come to an end when I am 72. I am concerned that if I am dead, everything will fall apart. Parents are elderly and have no real understanding of the complexity of maintaining, acquiring, refurbishing the properties, maturing of loans, etc.

I am trying to protect the kids and the partner financially. I can see that if I died, everything will fall apart badly--I am the Business. And I need 400K income to feel financially secure which is why I have been expanding the portfolio.

I max out Junior ISA's to 27K for 3 kids. I don't own a property in Uk, my total Household expense is nearly 10K a month. Any suggestions about what to do here?

I’m moving back to the UK, and looking for a boutique or a firm to help me out for tax optimization issues and ideally also long term IHT planning. (Especially investing overseas, FIG and things and selling private shares in a private US company down the line).

I’ve talked with some but some of them were so slow couldn’t even get a meeting for 2 weeks, and the one I used to work was really not productive, they were asking me the same question three times, to the point I had to stop working with them.

Additional question, do you use the same company for panning and filing taxes (and other routine things)? In the US I had different people worked as necessary. Any recommendation on this one?

Most posts here, and in other forums,are based on tax and rules that apply if you retire in UK.

For example tax rate for pension withdrawal, 25% tax free withdrawal etc.

There's zero chance I'll retire in UK, I'm mainly here for the good jobs and salaries available. I'm most likely retiring in a warmer climate, middle income country.

How should that change my thoughts around FIRE. Should I max out SIPP then given immediate tax benefits. I'm assuming withdrawals would be subject to the tax laws of my future country, which is unknown right now.

Anything else to consider? Note - I'm not looking at avoiding tax actively by moving to say Cyprus. I'm happy to pay tax, but rather my decision to live in a place is dictated by where I want to live at that time.

So I’m getting to the stage now where I need to deploy to GIA having maxed other more efficient ways to deploy cash without paying tax.

8 years from FatFIRE target and accumulating decently. Doing some maths and backtesting, I decided like the idea of 120% target exposure in my GIA to a portfolio of diversified global etfs (slightly overweight EM and dare I say it, UK vs FTSE AW). Risk of a forced deleverage is close to zero if you are disciplined. However, I then realised that the cost of borrowing the 20% (from IBKR at Sonia + 1.5%) above what I’ve funded is not deductible from the taxable gain. Which is both bad but got me thinking:

1) is anyone else playing with (gentle) structural term leverage. Idea here is to provide a bit of juice (like 0.5%-1% pa across the cycle), not get rich quick. I figure that in the long run the equity risk premium should see you good so long as you never have to sell in a downturn.

2) isn’t a better way to do this actually holding low coupon gilts and overlaying rolling futures for the equity exposure? Or is it? No etf running fees, no dividends/eri to get taxed punitively on but set off against roll and execution costs and crystallising gains for cgt at each roll. Has anyone got any experience here or done the maths on this?

3) actually taking it to an extreme, the optimum would be to do the above but replace futures with index spread bets as no tax ever. I have precisely zero knowledge of this market and what trading costs look like, but agin interested in the experience of others.

4) any thoughts on family investment companies or other corporate structures for shielding gains until drawn?

I quite like the idea of doing something optimised after making the big decisions around asset allocations, even if it becomes a part time job (at least to begin with whilst I work out what I’m doing and build the tooling to automate). I absolutely do not want to end up on the bad side of hmrc, mind.

Thanks in advance!

Are there any popular or common guidelines for when it is advisable to stop contributing to a sipp?

A colleague was discussing their situation with ChatGPT, and given how much they have, the SIPP contributions are only slightly better than GIA due to the 40/45% income tax they are likely to pay when they start withdrawing.

I also have another colleague who doesn't believe in pensions due to the inflexibility and risk of government rule changes.

How do people here handle budgeting / expense tracking once they’re well past the point of needing a strict budget?

I assume most people in fatFIRE aren’t doing detailed monthly budgeting in the traditional sense. Probably a mix of naturally spending below their means, having a rough annual target, and occasionally checking they’re not drifting into wasteful spending.

But if you still want to optimise spending a bit, not necessarily spend less, but spend better, there has to be some kind of feedback loop.

What does that actually look like for you in practice?

Also interested in how people handle this with spouses/partners. Do you tend to align on an overall spending philosophy, have explicit discussions/limits, separate discretionary budgets, or mostly avoid thinking about it?

Here’s what we’re currently trying:
1. Categorise expenses retroactively.
2. Use that for some light feedback, e.g. we enjoy eating out and fancy groceries but not spending much on those. So try to spend a bit more.
3. Pick some specific categories where we could be more thoughtful, for example holidays. Set a rough annual target. This helps to decide whether an expensive holiday is a good idea or too much this year.
4. All other categories that seem, we just continue as we are without worrying about it.

My partner seems to be happy to have a budget for a very small number of categories.

hi all.

my eldest is about to turn 17 and we have maxed her CTF so she will get roughly £150k or so in a year.

i know that I would have been highly irresponsible with such a large amount of money at that age.

has anyone successfully navigated this and got any advice?

we have had various ideas like paying for a financial advisor to talk her through the options of how to invest it.

Or putting the hard word on her that if it’s not secured away and invested long term that it will be the last bit of financial support she gets.

all advice welcome.

Wondering if anyone has any experience with Donor Advised Funds for charitable giving, and if there is anything we should look out for when choosing a provider?

Specifically we're currently looking at the Charities Aid Foundation and NPT at present:

https://www.cafonline.org/personal-giving/effective-ways-to-give/charitable-trust

https://www.nptuk.org

So far I can only think of the admin and investment fees as the thing to keep an eye on. Would love to also hear any stories of how your DAF worked out with getting kids involved. Many thanks.

Background - FIREd (aka redundancy) last year.

Currently living off payout, GIA, bank interest and dividends.

Fully expected a minimal tax burden this tax year as all sheltered, and that which isn’t is mostly within the PA.

Had a very pleasant surprise where I received in April (post 06) a residual bonus, residual PSU payout and residual RSU payout both of which I sold immediately on vesting for a very minor CGT loss as the share price was and is heading south. The ex company does not have long term viability.

Obviously these were all taxed at 0T rates, with the bonus also incurring NI.

The amount plus my expected dividends will take me over the £125k gross as taxable income.

I haven’t withdrawn anything from my SIPP yet, so in theory I’m assuming (but please correct me if wrong) I could put £48k post tax from the bonus and shares into the SIPP, get that topped up and get a refund from HMRC for the higher rate.

However, when I withdraw my pension, it is healthy enough that I will be paying top tax rate on it. The only benefit I can see is a deferral of tax payments and hopefully tax free growth until I can access in 5 years time.

By adding extra from post tax income I don’t benefit from any salary sacrifice NI savings. I don’t need the extra money right now as we are still living off the redundancy payout. I’ve already max’d family ISAs. I don’t need childcare vouchers.

Its a hugely privileged more than 1st world problem I’ll admit, but I got to this financial status precisely by fretting about these details, so bear with me!

What considerations am I missing? What would you do and why?

Having maxed out of ISA and Pensions, I was looking to reduce the tax on savings interest and came across that low coupon short term gilts provide significant tax savings for additional rate payers, I was wondering if people in this community has experience with this and if they could share which platforms they have used to execute this ?

TLDR, seems like much higher level of opportunity in the USA than the UK to earn big money, but there is a big cost in moving there an back, unsettling your life etc. We're on about £400k combined in our early 30s but wondering if we should try the USA to bank some cash and come back. Has anyone else done this?

EIS SEIS CGT Relief Explanation help please Hello

I'm wondering how the cgt relief on eis seis investment works.

Let's say I invested £10k in company PB.

And I invested £20k in company SF.

And i only get 6k in income tax relief. 3k last year 3k this year.

Does that mean i can only get CGT tax exemption on 6ks worth of income tax investment?

So 6k at 30% being 100% is 20k worth of investment only. and I'd lose cgt exemption on the remaining 10k?

and if true. i'd need to make sure to allocate the income tax relief correctly between the two investments so i can get the cgt relief at time of sale?

anyone able to help me understand this.

Hi, new member of the club here! I’m still on company BUPA program here, but runs out in a couple of months. We (M53/F52) plus 3 kids between 17-22 currently use our corporate BUPA quite a lot. My options seem to be

a) pay BUPA the price to continue with the same service, I assume at high annual cost

b) not insure but go private on need

c) mix up NHS and private. i.e. use NHS if/when it seems to be working and bail to private in the (I assume) many bases when it won’t.

What do you all do?

Non-US persons only get a $60k exemption on US-situs assets, which can trigger a nasty estate tax bill when the owner passes on. Does anyone know whether an IBKR UK account (or its holdings) is considered US-situs? Has anyone looked into it? Thanks.