Nigel and Mary are both aged 68 and are drawing their state pensions. Nigel also has a company pension of £9,000 a year.

Mary inherited a share portfolio from her father some years ago, currently worth £130,000, which generates £3,900 a year in dividends. £1,900 of this is subject to income tax since the annual dividend allowance falls from £5,000 to £2,000.

The couple also have £250,000 in ISAs between them and £150,000 in cash deposits. They are drawing £10,000 a year from their ISAs to supplement their income.

They need an additional income of £10,000 a year to meet their needs. Nigel is considering whether to start drawing income of this amount from his pension fund (SIPP) worth £500,000.

If Mary transfers half her shares to Nigel, both will have dividend income below the £2,000 limit and will escape dividend tax. They can each use their annual capital gains tax exemption to sell their shares if they choose to. They can convert £20,000 a year each from their cash holdings into ISAs, and also run down their cash holdings by £10,000 a year to top up their income. Once the cash runs out, the capital in ISAs will have grown to support the same or larger annual tax-free withdrawals.

By keeping his SIPP untouched, Nigel preserves this capital outside his estate and ensures it can pass inheritance tax-free to his children. But the couple can choose to draw income from it later in life if they need to.