Medical Family Finance Client Newsletter - Summer 2025 by david.norris

+ Leaving assets to the taxman

It will be another record year for inheritance tax (IHT) payments. IHT receipts for April and May reached £1.5bn, nearly £100m higher than the same period last year. Total IHT revenues have increased by more than 50 per cent over the past ﬁve years and are predicted to raise £9.1bn in the 2025-26 tax year.

This is before any further ‘tinkering’ to the current rules by the chancellor in the Autumn Budget. As part of last year’s ﬁscal statement, the government announced that most unused pension funds and death beneﬁts would be included in the value of a person's estate for IHT from April 2027.

These signiﬁcant policy changes – as well as restrictions on agricultural and business reliefs – will increase receipts even higher. In addition, the nil-rate band, which has been frozen at £325,000 since 2008, will be extended to the 2029-30 tax year. In 2008, the average house price in the UK was around £155,000 and in London, around £270,000. Now the average house price in the UK is £307,000, and £529,000 in the capital.

It is easy to see why inheritance tax is such an important topic to discuss with your family, and your professional advisers. Often your ﬁnancial planner will work with your accountant to consider the most appropriate methods for mitigating inheritance tax, if desired.

This may include setting up trusts and making use of gift allowances and the spousal exemption. Gifting can be a simple

and effective tool to reduce estates, but advice should be sought before restricting access to, or giving away funds that may be required in the future.

Individuals can gift funds to loved ones to reduce the size of their estate but must survive for another seven years to avoid inheritance tax being due – this is known as the seven-year-rule. If the person dies within seven years, the gift will be included in the estate and inheritance tax may be charged on the sum. It is also possible to make regular gifts from ‘excess income’.

It is important to keep accurate records of any gifts in the year when the gift happens – trying to establish the correct information at the time of enquiry (and in the haze of emotional upheaval) is unlikely to be reliable.

Having worked hard to accrue assets, most clients we meet wish to ensure these can be passed to the next generation and beyond. Now that unused pensions will generate IHT payments, a different strategy could be needed to do just that.

While retirees often choose to use assets such as ISAs to fund later life and retain their pensions, this approach is likely to shift in the next few years.

Should you have any concerns, your adviser will be happy to discuss generational wealth planning with you at your next review meeting.

+

As a fair and transparent adviser firm, it is always refreshing to hear when some of the big financial players in the industry are held to the same standards. Wealth manager St James’s Place (SJP) has faced a challenging few years dealing with large-scale complaints (upheld by the Financial Ombudsman Service) about the quality of the service it provides and the significant fees it charges to do so.

In 2024, one law ﬁrm alone had settled over 4,000 cases against SJP reclaiming approximately £12m for its clients. A further 8000 cases were awaiting a decision. SJP has set aside £426m for potential client refunds to address ongoing advice complaints.

SJP is now overhauling the business, cutting one sixth of its 3,200 workforce as part of a plan to reduce operating costs. Importantly, the company is changing its complex fee structure and removing the exit fees which kept clients chained to poor service indeﬁnitely.

The ﬁrm came under pressure after the Financial Conduct Authority published new ‘consumer duty’ rules in 2024 to ensure clients could trust their ﬁnancial advisers. Firms had to prove that their services offer a fair value and their fees are suitable for the work they conduct.

As a company, we know that our own values are aligned with the rules – we strive to give our clients communication that is clear and transparent, our services support your needs, and our fees are commensurate with the beneﬁts our work brings. We are also committed to ensuring clients have the full information to assist with any important decision-making.

Exodus

Investors will be particularly relieved that the ‘early withdrawal charges’ of SJP are being removed. Previously, a charge was levied (applied on a six-year sliding scale) if a client with pensions or investment bonds tried to leave. Now, new clients and those who have been with SJP for more than six years will no longer need to pay this fee when choosing to seek alternative advice. Sadly, however, those who joined SJP in the last six years will still face a penalty for moving to more cost-effective advice.

The whole point of the consumer duty rules is to allow investors to make sound ﬁnancial decisions based on choice. Exit fees remove that fundamental choice from the client and allow some ﬁrms to grow ever more complacent.

Value for money is always an important part of your adviser selection. Firms such as ours who deliver sound advice for fair fees will always champion consumer choice.

If you would like to discuss any of these matters further, please get in touch at paul.hart@medicalfamilyﬁnance.co.uk or 020 7252 5765.

+ Making Tax Digital for sole traders and landlords

If you run your practice as a sole trader or if you are a UK landlord, you may have received a brown envelope from HMRC requiring you to complete your tax returns via the Making Tax Digital scheme from next year.

Making Tax Digital (MTD) means completing quarterly online tax reports rather than annual. Each quarter, businesses will need to make an electronic submission to HMRC using appropriate software.

MTD became mandatory in 2022 for VAT registered companies and now sole traders and landlords will have to take part too, dependent on their income.

From April 2026, those with a gross income of over £50,000 annually from their self-employment or property income will need to

submit their returns quarterly – as well as complete the usual annual tax return to make any ﬁnal adjustments for the year. From April 2028, sole traders and landlords with income of over £20,000 a year will need to ﬁle their tax returns quarterly too.

If this applies to you, you may wish to sign up for a webinar on MTD being run by specialist medical accountants Sandison Lang.

Making Tax Digital: your essential guide will take place at 7pm on Monday 8th September. To register for the webinar, please follow this link https://bit.ly/SLwebinarMTD and you will receive joining instructions.

The webinar will last around 40 minutes with time for a Q&A at the end.

+ Introduction to Robert Dunne

Robert Dunne is a qualified financial adviser and head of our paraplanning team. In 2024, we moved our advisor support staff into one team under Robert’s direction. Previously, paraplanners worked alongside a specific adviser. This allows our clients to benefit from the experience and knowledge of all our paraplanning colleagues and means there is a consistent high-quality service for everyone.

Clients who need help with any ﬁnancial queries can now speak to any member of the team and in turn, you may receive communications from different paraplanning colleagues who will be supporting your usual adviser. This ensures that your work is handled quickly and efﬁciently without delay. For example, if a colleague is on holiday, another member of the team can pick up your query.

Here Robert tells us about his team: What is a paraplanner?

It is a highly technical and varied role. It includes preparing reports, conducting research, data analysis, maintaining compliant client ﬁles and implementing recommendations. The overall aim of our paraplanners is to free up advisers’ time so they can focus on providing strategic advice to our clients.

On top of this, at Medical Family Finance, our paraplanners have to keep up-to-date with the latest NHS legislation relating to pay, pensions and taxation. So when changes are made at government level, we have to make sure we update our knowledge so the rates and ﬁgures we use are accurate. The team plays a vital role in our service to clients.

We made the decision to move the paraplanning service into a ‘pool’ so that all our clients can access the knowledge and expertise of the team. Our colleagues learn best practice from each other and our clients always have someone on the end of the phone who can help.

Thank you for thinking of us

We are delighted to announce that the winner of our referral prize draw this quarter is Dr Jaspal Bhular. Jaspal has won a Montblanc Meisterstück Classique pen.

We are always delighted to speak to your colleagues who may beneﬁt from our specialist services and are grateful for the many

We never have to say ‘someone is away’ or ‘could that issue wait?’ –a member of the team can jump on the call to help. This is a clientsﬁrst approach and we are really pleased with how it’s working.

What

is your role?

My role is to make sure we continue to develop the team’s skill base, manage the day-to-day running of workloads and implement improvements to our processes when required. We are constantly reviewing our working methods to make sure we are doing the very best we can for our clients and our colleagues. The end result should be an improved client experience.

As a qualiﬁed ﬁnancial planner looking after my own clients, I understand what the adviser team needs from paraplanners to be able to do their jobs properly, and at the same, what complex tasks the paraplanners are working through. I like to think I’m a good point of liaison between our teams.

What is the most rewarding part of your role?

As a ﬁnancial planner, I am particularly pleased when clients have appreciated ﬁnding a great value service and one which gives them total peace of mind. We work in a very niche area and one where regulations change pretty quickly, so retaining our NHS knowledge can be challenging. It takes a lot of work and so it is always rewarding when our expertise makes a difference to people’s lives.

As head of paraplanning, I really enjoy being part of the overall development of the team – both in terms of their technical knowledge and competencies. It is a highly skilled role and requires signiﬁcant focus, a keen eye for detail and the ability to complete complex tasks.

What do you love most about working for Medical Family Finance?

There is a great culture here – it is fun, dynamic and everyone gets along. We are able to speak freely, contribute to discussions that shape the business and can grow under the leadership. I have never experienced micromanagement which is refreshing – this means everyone can make a difference at any level in the organisation. As a small business, there is also the opportunity to develop your role and I see many colleagues who have been with the company for a long time. That in itself speaks volumes.

If you would like to speak to Robert directly, please contact him on robert.dunne@medicalfamilyﬁnance.co.uk or 020 7252 5765.

recommendations that help us to support more people. For every referral that contacts us, you will receive an entry into our quarterly prize draw which will take place in October. Please ask your contact to mention your name when they ﬁrst enquire with us.

Many thanks for supporting our business.

+ Improving our client portal

We have always appreciated the views of our clients to help us grow as a company and to improve the services we offer to medical professionals.

We do not shy away from important feedback and instead, encourage our clients to share their thoughts with us via client surveys, review websites such as VouchedFor and everyday conversations with members of our team.

Recently we have discussed our client portal and how we can improve the experience of using it when logging in or trying to ﬁnd the information you need. Using a secure client portal is the safest way to communicate with your adviser, particularly when exchanging sensitive or ﬁnancial information.

We are happy to conﬁrm that we will be upgrading the current client portal and installing a new, easy-to-use system within the next 18 months.

In the meantime, we have dedicated client services team members who are happy to assist you should you have any issues with using our secure system. Our team are happy to set up a Teams video call to offer online assistance or can help you in person if you have arranged to meet your adviser in our ofﬁces. Please do let us know if we can help in any way.

If you have any further feedback or would like some help, please contact Cristina Morais, head of client services on 020 7252 5765.

+ Client offer: harnessing the power of AI

We know from our many updates with clients that doctors are embracing AI (artiﬁcial intelligence) to help ease the administrative burden and speed up processes at work. We are pleased therefore to bring you a client offer from PLAUD which produces useful tools that record conversations and turn them into summaries and tasks.

The original PLAUD Note is a small, portable recording device used to transcribe and summarise voice communication. The company also produces the PLAUD NotePin which can be worn as a

necklace, wristband or clip for easy voice recognition and recording.

Having trialled these in our ofﬁce, we know they will also be useful for doctors needing to maintain accurate summaries of patient and colleague discussions.

To receive 10 per cent off either item please follow this link and use the promo code MFF10. www,plaudai.pxf.io/mff

+ Taking lump sums from your NHS pension

In April 2024, the government ofﬁcially removed the lifetime allowance (LTA) which restricted overall pension savings, and replaced it with the lump sum allowance (LSA) and the lump sum and death beneﬁt allowance (LSDBA). These limit the amount of tax-free cash that can be paid from pension schemes.

If you wish to take your NHS Pension Scheme beneﬁts, you need to let the NHS Pensions Agency know about any pension beneﬁts you have already taken (this could be a pension, a lump sum or an income drawdown).

To do this, you will need to complete a PTD1 form so that calculations can be run correctly under the new lump sum allowances. The form will specify if you have taken any pension beneﬁts and if you have a valid protection certiﬁcate from HMRC.

The form will also allow inflationary increases to be paid on your pension benefits. If your NHS pension is in payment, it is reviewed every April and should increase at that time in line with the official rate of inflation as set by the Consumer Prices Index (CPI).

For more information, please contact your adviser or to request the form directly, please contact NHS Pensions.