Real Life Stories #3: A tax efficient rollercoaster

Rollercoaster

I have known and dealt with Wyn for around 30 years. As well as being a trusted adviser he has also become a close friend. My main concern when I first sought advice was to invest tax efficiently. The advice given has resulted in my having a substantial investment portfolio that is ring fenced from being taxed as it grows, if I need to cash it in or take an income from it.

It would be nice if investment portfolios grew in a straight line but the truth is that the graph usually looks like a roller coaster!

Wyn has asked me to share what is probably the toughest time that we have been through and put real figures to the story which is why I wish to keep this endorsement anonymous.

I had two separate tax sheltered portfolios that had grown in value to over £95,000 each at the end of 1999. The FTSE 100 at the time was hitting highs of almost 7000.

We were waiting for each portfolio to go through the £100,000 ceiling!!

The year 2000 triggered what was to become three years of falling values when instead of going through the £100,000 ceiling my portfolios fell in value to around £65,000 each and I had given up hope of going through the £100,000 ceiling.

During this period Wyn made a comment that I did not understand or believe at the time. He said that we would break through the £100,000 before the FTSE was back at 7,000.

In August 2005 Wyn included a paragraph in a letter to me which said:

“We have monitoring the recovery of both your MIP and your PEP portfolio. The great news is that they have both topped the £100,000 … During our conversation I noted that, as predicted, the recovery of your funds has happened sooner than the recovery in the usual stock market indicator used i.e. the FTSE 100.”

By today (March 2013), the values are £201,930 and £197,334, tax free, and the FTSE still not back to 7,000.

DisclaimerReal Life Stories are written by clients of iPlanning Wealth Management. The views expressed in this post are those of the author only and are not necessarily those of I Planning Wealth Management Ltd. All material in this post should be considered as general information only and should in no way be construed as a recommendation of a specific product or course of action. Each circumstance is different and professional advice tailored to your circumstances should be sought from a qualified financial adviser.

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