top of page

Case Study 2 – Family Wealth Transfer

Colin ran a successful property development company. By the time he reached his 60s he had amassed significant assets both inside and outside his pension. His SIPP was worth over £2m, he had significant amounts in cash and a main residence also worth over £1m. He was married to Anne, had 3 grown up children and 8 grandchildren.

Very sadly, Colin was diagnosed with a terminal illness which gave him a much-reduced life expectancy. He wanted to plan how to pass his wealth to his family in an efficient manner and to make sure that this wife was financially cared for, for the rest of her life. He wanted his children to receive an inheritance and leave some money for his grandchildren.

He was concerned that as he had a large estate, his beneficiaries would have a large inheritance tax bill to pay. He had always intended to plan for inheritance tax but had never given it any priority.

The SIPP provided the answer.

Colin had intended to leave the SIPP to Anne and split the cash between his children and grandchildren. This might be considered the traditional approach – to provide a pension for your spouse from your pension. However, after discussing matters with us, this was not what Colin did.

Colin left the main residence and all the cash to Anne. There is no inheritance tax between spouses and Anne therefore had a home which she could, if she wished, sell and downsize - plus a significant cash sum to provide her with income through her life.

The SIPP was split between the children and the grandchildren (in different proportions) – none of it was left to Anne. The beneficiaries received their share of the SIPP fund with no inheritance tax nor any capital gains tax.
As Colin died before age 75 – any money that the beneficiaries withdraw from the SIPP will suffer no income tax. The grandchildren could pay their own education costs or get themselves on the property ladder. The children, who had not been able to fund pensions of their own, inherited a tax-free income source.
So – there was no inheritance tax bill and the SIPP provided the best way of leaving a legacy to his children and grandchildren in a way that suited Colin.  Had the SIPP been left to Anne and she survived beyond age 75 then any remaining fund she passed on would be subject to income tax on the beneficiaries – so again, not leaving her any of the SIPP was efficient tax planning.


This example shows that taking advice from someone who fully understands the advantages of using the SIPP as a vehicle for family wealth transfer can maximise the amount passed to family and provide a legacy for generations to come.

The purpose of this case study is to provide technical and generic guidance and should not be interpreted as a personal recommendation or advice. Any tax treatment depends on the individual circumstances of each client, Tax Planning is not regulated by the FCA. You may not get back the full amount of your investment.

Please note:

Rates of tax and the legislation that governs them are subject to change, and this information was only accurate at the time of writing.

“I would sum up my relationship with 336FM in one word ‘trust’. I trust them to make my money work hard, their service is great and their charges are reasonable. They are clear and up front about all the information I need to know.”


bottom of page