Wealth Management for dental practice owners

 

Get your finances in shape for retirement

If you are a dental practice owner within 10 years of retirement there are some key decisions to make that directly impact on your financial security in retirement. We have identified 4 key areas which amount to a retirement planning crossroads.

NHS Pension - take it or leave it?

The NHS Pension is a core source of income for most dentists in retirement. However decisions on taking benefits are often more complex than they first appear and require careful planning.

A good starting point is to consider which NHS Pension scheme you belong to - 1995/2008 or the 2015 scheme. This dictates when you can take the pension without incurring a penalty and how much tax free cash is available to you. For many the 'normal' retirement age (1995 scheme) is age 60. However if you are among a growing number of dentists selling your practice closer to age 50 than 60 a decision needs to be made on when you take the pension. What is the penalty for taking the pension early? Do you need the income? What is the knock-on effect on your Lifetime Pension Allowance (LTA)?

PFM Dental has always given me comprehensive and highly professional advice. Jon Drysdale has handled my investment portfolio for several years now and he’s extremely knowledgeable, particularly in relation to the NHS pension scheme and the impact of the new lifetime allowances on pension planning.

— Kenny Combes, practice owner, UK

Personal pensions - flexible income options

If you have accumulated money in personal pensions you will have a number of options for income and tax free cash after age 55.

Positioning your personal pensions for 'income drawdown' should be a priority because this offers you the best opportunity to manage income tax, inheritance tax and your Lifetime Allowance position. Most pensions don't offer a drawdown facility so advice is required to make sure a transfer is viable and in your best interests.

Practice sale proceeds - investment options

A once in a lifetime business sale can produce some significant proceeds. Managing investment risk, tax efficiency and income requirements are just a few of the challenges you face when you sell your practice.

A well constructed investment portfolio will offer the opportunity for growth and/or income before and after retirement. Investment risk can be managed and tailored to your preferences - cautious, speculative or somewhere in-between. We offer a regular review process and a high level of diversification to make the most of your practice sale proceeds. We won't recommend products with financial exit penalties or complex tax schemes.

Inheritance tax planning - first steps

Your practice value is outside your estate for inheritance tax purposes because a trading business is exempt. However when you sell your practice the value drops back into your estate.

Tackling a potential inheritance tax bill first requires calculating the liability. We can help you to understand what is included and what is exempt. Practical solutions often involve gifting - either directly, or to a trust if you would like to retain some control over the gift. In each case we can guide you on the options and recommend a solution that reduces your inheritance tax liability whilst retaining access to the funds you need personally.

Case study

Maximising investments before selling and retirement

Reaching a financial crossroads is certainty for dentists selling their business. Making the right decisions, underpinned by professional guidance is the key to a financially secure retirement. PFM Dental have the skills and qualifications to deliver the right advice at the right time.  

— Jon Drysdale, director, PFM Dental

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Our accreditations

  • Chartered status is our industry’s gold standard for quality and integrity. No other financial planning firm offering advice exclusively for dentists has this badge of excellence.

  • Only recognised dental specialists can join The Association of Specialist Providers to Dentists. As members we’re guaranteed to understand dentists’ particular needs, problems and opportunities.

  • The Institute of Chartered Accountants in England and Wales (ICAEW) believes accountancy is a force for positive economic change and works to promote trust in business. Membership means we’ve passed a premium qualification and have access to its world-leading resources.

  • Lexcel is the Law Society’s quality mark for practice management and client care. It’s a voluntary standard that we’ve signed up to. The mark means we meet their high standards, giving you peace of mind.

  • The National Association of Commercial Finance Brokers (NACFB) is the national trade body for brokers who arrange finance for businesses. NACFB promotes the highest industry and regulatory standards.