FWIW, I think it admirable that you look after your father's portfolio rather than outsource it to an IFA, which could be seen as an easy option or kop out.
After all, apart from wishing to do well by your father you also have your own skin in the game so to speak.
Well, done Mr GL, and good health to you and your Father 👏

the gilt bond ladder (mix of nominal and index linked) has developed/grown since last update and thanks to recent rises has been doing well from a mark to market perspective.... kinda moot as this is set up to cover his foreseeable spending for the next 13 years (to take him to 94 years old... )... old man's total RISKY AUM (away from his 5% ish in cash... which is now made up of easy access and national savings) is up 3.1% year to date... % holdings below is versus his total AUM

5.3% Cash

1.3% TN24 UKT 0.125 1/24 (0.25 years)
1.9% TN25 UKT 0.25 1/25 (1.25 years)
1.9% T26 UKT 0.125 1/26 (2.25 years)
6.5% TR26 I/L 0.125 3/26 (2.5 years)
2.7% TN28 UKT 0.125 1/28 (4.25 years)
5.1% I/L 0.125 8/28 (5 years)
2.7% T29 UKT 0.5 1/29 (5.25 years)
5.1% I/L 0.125 3/29 (5.5 years)
2.7% TG30 UKT 0.375 10/30 (7 years)
2.8% TG31 UKT 0.25 7/31 (8 years)
4.1% I/L 0.125 8/31 (8 years)
2.7% I/L TR31 0.125 8/31 (8 years)
2.8% TG33 UKT 0.875 7/33 (10 years)
2.8% TG35 UKT 0.625 7/35 (12 years)
2.9% I/L TG36 0.125 11/36 (13 years)
47.9%

8.3% CGT
1.5% CGT
1.5% Ruffer RICA
11.4%

2.3% AVI Global AGT
2.7% Bankers BNKR
2.7% Dunedin Inc DIG
1.6% Ecofin Global EGL
2.7% FCIT
1.5% Fidelity Asia FAS
1.2% Fidelity China FCSS
1.1% Herald HRI
1.2% HGT
1.1% HVPE
1.5% Impact Health IHR
1.2% JPM Emerging JMG
1.5% LXI
2.7% Merchants MRCH
1.2% OCI
3.1% RIT Capital RCP
1.9% Scottish Mortgage SMT
1.2% Smithson SSON
3.1% TR Property TRY
35.4%

My old man's 2024 end of year... 80+ dementia in a care home ... could go on for years as physically in good shape... likes to do the boxercise and still laughs at funny films / TV shows / swear words...

Ended 2024 overall +6.1%... his annual needs (care home + sundries less pension and care allowance) are about 4% of AUM so overall another OK year of risk adjusted returns...

Cash 4%
Gilts + Index Link 33%
Diversified (CGT/PNL/RICA) 29%
Property / Infra 15%
Smaller Co 1%
Commodities 1%
Emerging Mk 2%
Healthcare Bio 0%
Global 14%
Private Equity 0%
UK 2%
100%



This gilt portfolio generated a 1.4% gain over the year.... I haven't taken anything out as he had enough spare cash to meet needs last year... the 1/25 maturing gilt will probably not get reinvested and will move to spare cash. This portfolio has 7.1 years of spending needs and add to approx 1yr of cash on hand you can see he's quite well funded for a while...

2.8% TN25 UKT 0.25 1/25 (0.5 year)
3.2% T26 UKT 0.125 1/26 (1.5 years)
4.5% T26A UKT 0.375 10/26 (2 years)
4.5% TG27 UKT 1.25 7/27 (3 years)
4.6% TG28 UKT 1.625 10/28 (4 years)
4.9% I/L T29 0.125 3/29 (4.5 years)
3.9% I/L TR31 0.125 8/31 (7 years)
28.4%


This taxeable / non-wrapped account has significantly changed over and throughout the year - as many others have done I thought I had started to build the income portfolio AFTER the price falls but have given up much of the earlier part of the year's gains as prices have continued to fall.. I anticipate it being the main driver of income and some capital gains going forward but am trying to be tax aware and not planning on trading it much ... at the end of 2024 it was showing a 2.6% gain. This portfolio represents 6 years of spending and clearly is now heavily about income generation...

3.6% RICA

0.7% AEI
0.6% BRWM
0.5% Fidelity Asia FAS
0.8% Fidelity China FCSS
0.0% Harborvest HVPE
0.7% JPM Emerging
1.0% JUGI / OIT / OIG / SEC
0.7% North Atlantic NAS
0.7% Smithson SSON

0.9% 3IN
0.7% BBGI
0.6% FGEN (JLEN)
1.0% GCP
1.0% HICL
1.0% INPP
0.6% NESF
0.6% ORIT
0.6% TRIG
0.9% UKW

1.7% CRT
1.7% LMP
1.7% SUPR
0.0% THRL
2.0% TRY
0.0%
24.4%

lastly his SIPP.... where I had focussed most of his risk taking and where over the last 5 years most of his capital gains have happened within the tax free wrapper... With Rachel from Accounts plan to change the inheritance tax rules in a year or so... and his SIPPs already being subject to the over 75 distribution marginal tax already... Rachel's changes will potentially 'cost' (in terms of reducing his net of tax estate) his beneficiaries a fair bit... I calculate that his estate will go from a weighted average 81% net of tax estate (ie 19% average tax to pay) to a 64% net of tax distributable estate ... (so when I put on my potential beneficiary hat that is quite a kick in the balls!). Anyway his SIPP represents 10.8 years of spending and last year produced an 11.6% gain. The below is significantly different to how it has looked throughout most of the year...


across all holdings - and assuming dividends dont get cut / UK government doesnt default etc his dividend / coupon income should generate just over half his annual spending needs... and is about 2.3% of his total AUM...

0.0% Cash (268275 limit)
6.5% Caledonia CLDN
8.9% CGT
4.3% TN25 UKT 3.5 10/25 (1 year)
8.4% PNL
7.5% RIT Cap RCP
7.8% RICA
43.3%

priority has always got to be what is in his best interests - even if this conflicts with what he may himself have done - but I can make decisions based off what is best for him from a tax perspective AND I also have a responsibility to ensure that his potentially beneficiaries are not needlessly disadvantaged by my choices / actions / inactions...

The tax regime / tax treatment of his accounts has meant that short term capital gains were best made / taken in his SIPP as there is no year to year capital gains tax on those investments. the fund he has outside of a tax wrapper has meant I have bough his gilt ladder there using very low coupon gilts to maximise the capital gain component of his yield to maturity of the government bond risk.
With the significant back up in yields and the now not insignificant dividend yields now on offer from a diversified portfolio of REITs / Infrastructure - and the large discounts and hopeful favourable (time will tell) risk reward of a long term holding in such investments I have built the taxable portfolio.

However - and this is a very tricky situation. At some point I need to make a decision as to whether it makes sense to take the up to 25% tax free from his SIPP - subject to a £268,275 max limit. https://www.gov.uk/tax-on-pension/tax-free. and be clear as to why this makes sense and to whose advantage and to ensure that this does not cause a negative outcome for my dad...
As in for his estate and therefore his beneficiaries on his death there is now - due to him being over 75 - an incentive to draw down his SIPP before the rest of his assets because whilst all his estate is now part of the inheritance tax at 40% above 325k his pension will 'suffer' an additional tax charge depending on the marginal tax rates of each beneficiary. Ofsetting this is that his SIPP is a tax free / wrapped vehicle... I have no idea how long he will live - to be tax neutral for him I could start to take 20k a year and put it straight in an ISA so his personal taxable accounts stay the same... however - to be blunt - he's 83 years old and his SIPP is worth over £1.5m so each 20k slice isnt doing very much - and to get to the max allowed £268k would take 13 years and he'd be 96 by the time... its possible... and I can't see how this is wrong from anyone's perspective so I can start to do this and not fall foul of fiduciary responsibilities and his best interest whilst also being reasonable to his potential beneficiaries...
But - to take the whole 268k lump and leave a load in a taxable account today I am not sure how I can justify this for him - but yes - with the gilts backing up as much and there being so many low coupon medium term maturities there may a REASONABLENESS justification to not materially increase his tax exposure whilst materially improving the tax situation of his potential beneficiaries by adding to his medium term maturity gilt investments in low coupon issues......

also as the rules haven't changed yet (think not for another year and a bit) I dont want to do anything too early and run the risk that he suddenly dies and it would have been better if it did nothing!

and finally I also need to find out if it is possible to enact a deed of variation on a pension inheritance as for myself I think I'd rather pass my potential inheritance of my dad's SIPP directly onto my kids. As he has now lost capacity and his will is pretty clear (100 of his estate split as pro rata share to his kids or their issue if predeceased) and so I can't change his expression of wish to be different...

thanks for the question Sara... and now maybe someone can give me the answer!

As in for his estate and therefore his beneficiaries on his death there is now - due to him being over 75 - an incentive to draw down his SIPP before the rest of his assets because whilst all his estate is now part of the inheritance tax at 40% above 325k his pension will 'suffer' an additional tax charge depending on the marginal tax rates of each beneficiary.

Mr GL.. afaik the additional tax charge only applies if a beneficiary spends their inheritance. They could carry on the pension and benefit from a lifetime of tax-free investment. That ought to be more important than the IHT consideration. I assume that once a legatee acquires their share of your dad's pension they are free to model their own p/f: so you would be free of that responsibility. Apologies if I have missed any obvious hitch; I should like to know if I have because my intention is still to run down the unprotected side of my folio and pass on my pensions untouched.