I want a balanced portfolio

The semi-retired consultant

Name: Allan Phillips

Nationality: British

Age: 53

Occupation: Engineering consultant

Lives in: Currently resides in the UK, but plans to work in Dubai before returning to the UK to retire at 65

Family: Divorced

Spending: Allan has a house that he will rent out while he's in Dubai. He has no mortgage

Savings/investments: £150k salary, rental income of £30k per year on his UK property, plus a pension income from taking early retirement from a previous job. He has £400k to invest, which he expects to top up with £100k from his surplus income while abroad

Allan took early retirement from his position as an engineer with a large construction company and has negotiated a contract with an overseas firm in Dubai that will pay him £150,000 a year. He has £400,000 to invest and expects to top this up with another £100,000 or so. He is seeking a balanced portfolio that has the opportunity to grow, but he doesn't want all his money invested in shares. I would recommend a mix of international equities and bonds, which offer scope for growth but also income when he fully retires.

In addition to a discretionary portfolio, it would be wise to 'wrap' the investment in an offshore investment bond. This changes the tax treatment of the investment in the UK, with key benefits being no immediate tax liability. The investment can grow gross of any tax, and if the bond is encashed when he returns to the UK, 'time apportionment' will ensure that his years abroad are discounted from the tax liability.

Five per cent per annum of the initial investment can be remitted to the UK, deferring tax for up to 20 years, when he may be liable to lower overall tax rates after retirement. A bond wrap generally comes with an initial cost, and we have agreed a preferential rate with a leading provider, ensuring that clients get a great deal.

Expert view:

Adrian Hick, Senior Manager, Offshore Private Banking

"By understanding all of Allan’s future intentions as well as his current plans, we can advise him to set up his investments in the most tax-efficient way. The underlying investments can be adjusted to respond to any changes in Allan's views or circumstances."

The persons and their circumstances portrayed in this case study are for illustrative purposes only and should not be construed as financial advise.