The Directors present the strategic report for the year ended 30 June 2025.
The Group consists of the non-trading parent company Tacit Holdings Limited (THL/Group) and its trading subsidiary companies, TIML Limited, which trades as Tacit Investment Management (Tacit), and Lucus Wealth Limited (Lucus Wealth). TIML Limited continues to be regulated by the Financial Conduct Authority (FCA) as a Small and Non-Interconnected (SNI) firm. Lucus Wealth Limited is regulated by the FCA to give Independent Financial Advice.
Lucus Wealth was acquired by THL on 09 August 2023, following approval from the FCA for the change of control. This year reflects the contribution of Lucus Wealth to the Group following integration into TIML and a year of significant growth.
The principal activity of Tacit since its inception is the investment management of portfolios for private individuals and a small number of corporate entities. As the Directors reported last year, the strategic objective for Tacit is to evolve from a MiFID II investment firm into a fully integrated wealth manager. In furtherance of this objective, the firm submitted and successfully progressed a Variation of Permissions (VoP) application with the FCA to expand its advisory permissions, including the provision of pensions advice, non-investment insurance mediation, and broader financial planning services. This expansion of its permitted activities has enabled Tacit to develop a holistic wealth management proposition for UK investors which combines financial advice on pensions and retirement planning, tax efficient investment, and protection and inheritance planning, with the investment of their assets.
The proposition to, predominantly retail, UK investors has been developed in line with the principles of the FCA’s Consumer Duty and the Directors are confident that its products and services are fully aligned with FCA expectations for target market, price and value, customer understanding and customer support, and that its policies and processes for meeting the particular requirements of vulnerable clients are appropriate and effective. Tacit currently has two advisors qualified to provide pensions and insurance advice working alongside the Investment Directors. Over the year, the team has engaged with a small number of specialist tax and legal practices to provide wider services to clients where this is appropriate such as Family Investment Company planning and trust structures. The firm attained Charter status with the Chartered Institute for Securities and Investment (CISI) and joined the Consumer Duty Alliance in the course of the year, both of which demonstrate the firm’s strong commitment to professionalism and excellence in the service of its clients.
The new financial advice component of Tacit’s business generated only modest fee revenue in the year but the business plan envisages this contribution rising steadily over the next years to become a significant driver of revenue.
Lucus Wealth provides independent financial advice to clients mainly in the mass affluent and affluent sectors. Lucus Wealth operates on a 'total market' principle and is not restricted to proposing Tacit to its clients who have an investment management requirement. Lucus Wealth charges fees for advice commissioned by its clients. Lucus Wealth currently has two senior financial planning advisers and is actively looking to attract additional qualified financial planning advisers with established books of clients.
The Group continued to acquire new clients throughout the year and has been successful in winning new business from private investors in a higher net worth bracket, confirming the appeal of high quality personalised professional service, and the depth of market experience of the senior managers in Tacit and Lucus Wealth.
The investment environment and the requirement for tax planning and overall financial planning are the principal drivers of business for the Group companies. The first half of the year was dominated in the main by the US presidential election and a growing recognition that Donald Trump would win a second term. Mr Trump’s inaugural address set the scene for what has turned out to be an unconventional and idiosyncratic exercise of presidential power. An aggressive tariff strategy caused equity market to roil in the first months of the presidency and US bond markets were also at times volatile in the face of concern at the level of US borrowing and with concerns that economic activity would slow and inflation rise as a consequence of the tariffs. By the final quarter of Tacit’s financial year, markets had steadied and embarked on an unexpectedly strong rise, not only in the US but in most of Europe and Southeast Asia. By the end of the financial year, Tacit strategies were at new highs and both the value of assets under management and the quarterly fees calculated shortly before the 30 June were at new records for the firm.
The UK government is under increasing pressure to fund public services and, inevitably, this leads to higher personal and corporate taxes. A fundamental change to the taxation of personal pensions will bring unspent pension assets into the scope of UK inheritance tax (IHT) from 2027 and this has forced many families to reconsider their succession planning and means of addressing their exposure to IHT. Further changes to the personal tax regime in the UK are expected and this makes financial planning all the more important for UK investors with savings and assets. The Group subsidiaries are strongly placed to attract new clients to their services.
Performance
Total revenue increased by 12% from £2.4m to £2.7m. This is due to increases in both Lucus Wealth and Tacit. However, as noted last year, operating costs have increased again for several reasons, including a change in the remuneration arrangement for some of the Directors who are now on the payroll (the total payroll costs increased by 47% over the previous year), and a general increase in most operating costs including third-party service provider costs. As a consequence, post-tax profit was £154k compared with £229k in the previous year. The Directors acknowledge that costs must be contained and reduced wherever possible, and that more energy must be devoted to winning new clients. The balance sheet on page 15 of the financial statements shows that net assets have decreased by £202k to £1.3m, following payment of dividends.
Business plan
The Group business plan is to deliver high quality financial planning services and investment management to UK clients in the mass affluent, affluent and High Net Worth (HNW) sectors. Lucus Wealth is directed at affluent clients who require financial planning services at defined points but who may use a range of providers for their investment needs. Tacit’s holistic wealth management service combines ongoing financial and tax planning with investment provided by Tacit, and its client profile is typically in the HNW segment. The Directors firmly believe that strong investment management, tailored advice, and a hands-on service approach aided by technological engagement will provide strong outcomes for clients moving forward.
Operational risk
Operational risks arise from the people, processes, and systems, or from external events. Tacit implemented and developed Intelligent Office (IO) as its client database and operating system. The analytical capability of IO will greatly enhance the Firm’s range and depth of management information (MI) and will enhance client reporting experience and interactive communication with Tacit. Lucus Wealth is already a user of IO and the next stage of implementation will be to seek efficiencies across the Group.
Regulatory environment
The FCA’s current focus areas for wealth management include, ongoing financial crime Anti-Money Laundering/Counter Terrorist Financing (AML/CTF) control effectiveness, embedding and evidencing Consumer Duty compliance, robust systems and controls (including third-party and outsourcing risk governance), board engagement and governance, vulnerable customer support and timely and accurate regulatory reporting.
The regulatory environment for UK MiFID II investment firms is undergoing significant transformation as the FCA and HM Treasury continue to shape a post-Brexit regulatory framework tailored to the UK market. During this reporting year, the FCA has reinforced its expectations for robust governance, effective systems and controls, and a strong culture of compliance, all of which are codified in the Senior Management Arrangements, Systems and Controls (SYSC) sourcebook and the onshore MiFID II regime. These requirements are designed to ensure that UK MiFID investment firms maintain the highest standards of organisational resilience, risk management, and client protection.
The FCA’s supervisory priorities for MiFID firms continue to focus on the delivery of good consumer outcomes, as mandated by the Consumer Duty, and on the prevention of financial crime. Firms are expected to demonstrate that their products and services deliver fair value, that client communications are clear and not misleading, and that vulnerable customers are identified and supported appropriately. The FCA is actively reviewing how firms embed these expectations into their governance, product design, and ongoing client interactions.
Technological environment
Tacit relies heavily on digital technology and believes in making the best use of technology to remain competitive and to provide excellent service to clients. The Directors are very conscious of the risks of cybercrime and data breaches. Tacit employs a professional IT support firm to advise on security measures and to maintain system protection software on all devices
At the operational level, the Group has incorporated the UK Government’s 10 Steps to Cyber Security into our day- to-day management of the firm.
Economic environment
The economic backdrop is dominated by US policy, in particular the trade tariffs implemented by President Trump and their frequent use as political leverage against specific countries. Neither a jump in US inflation nor a drop in global growth, both of which were thought to be the inevitable consequences of the tariff policy, has yet materialized. This may be a matter of timing, and it remains to be seen if significant disruption to international trade has been triggered. Market substitution and favourable fossil energy pricing may compensate for some of the tariff impacts, at least in the short term.
Another factor which is widely expected to bring economic benefits and higher productivity gains is the rapid development and roll-out of artificial intelligence (AI) into virtually all dimensions of human activity. The extent of these anticipated benefits will become clearer as AI processing becomes widely embedded across industries and in the public sector also.
Political Environment
Internationally, the political climate has become more volatile than in recent decades and many of the norms of the post WWII international settlements are being fiercely contested and in instances overturned. One of the consequences of this is a dramatic return in Europe to defense spending on a scale not imaginable after the end of the Cold War and the harvesting of the so-called peace dividend. Often, technological advances have had their origin in the defense industry, and it is likely that the urgent need to prepare for defense in a world that is already infused with digital technology will generate new applications with benefits beyond the battlefield.
In the UK, the strain on government funding in an already over-borrowed economy is forcing a higher tax burden on both corporations and individuals. This is not a conducive environment for entrepreneurism and growth, but it has made tax planning and advice fundamental to UK investors even with moderate wealth. In this respect, the domestic environment creates a growing need for investors and savers to combine financial planning with their investment objectives.
Capital adequacy
The regulated subsidiary, TIML Limited, is required to maintain minimum regulatory capital and liquidity levels as identified in the firm’s ICARA report; as an SNI regulated firm, it continues to be capitalised in excess of regulator-imposed minimum capital adequacy and liquidity requirements. TIML Limited’s capital adequacy requirement is calculated based on three months contracted fixed costs.
Competitive environment, social and market forces
The Group continues to operate in a competitive marketplace with many larger competitors focusing on asset growth rather than investment management as their primary objective. Consolidation and a focus on margin at the expense of the service and value-added to private investors is a helpful backdrop for Lucus Wealth and Tacit to promote their personalised services, and the consistent performance of the Tacit strategies over a fifteen-year run is a strong foundation for retaining and winning clients.
The Directors intend to continue to assess relevant opportunities to develop or expand the firm’s activities, provided these are consistent with the Group’s business strategy and direction.
The Group's key financial performance indicators during the year were as follows:
Unit 2025 2024
Turnover £ 2,686,338 2,398,322
Operating profit £ 359,886 469,221
Investment outcomes and client retention
The four Tacit strategies performed well in absolute and relative terms when compared to the Asset Risk Consultants Private Client Indices. This was achieved by strictly adhering to the Growth/Stabiliser framework which underpins the Tacit Investment Philosophy as well as the ability to pivot away from more expensive US equity exposure meaningfully towards Asia and Europe where valuations are cheap when considered in the context of history. Liquidity was an important factor also as it allowed the team to manage exposures through the volatility which followed the announcement of tariffs by the US administration. All strategies provided positive returns after all costs, over the 12 months (the performance since inception on 30 September 2010 for each strategy is shown in brackets next to the 1-year return). Conservative +4.45% (+77.06%); Real Return +7.21% (+129.94%); Steady Growth +7.96% (+163.62%); Total Return +10.59% (+250.52%).
Section 172 Statement and engagement with stakeholders
The Group includes a discretionary investment management firm which depends on the trust and confidence of its stakeholders to operate sustainably in the long term. It seeks to put its clients’ best interests first, invests in its employees, supports the communities in which it operates and strives to generate sustainable profits for shareholders.
The Directors of the Group consider that they have acted in accordance with their duties codified in law, in particular their duty to act in the way in which they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole, having regard to the stakeholders and matters set out in section 172(1) of the Companies Act 2006.
Clients
The Group considers our clients to be one of the most important stakeholder Groups of our business model. Tacit and Lucus Wealth place the highest emphasis on personal service to each client and regularly review the processes by which we establish the individual needs of each client and respond to them with investment propositions and regular communications which meet their objectives and enable them to understand the basis on which our investment decisions are made.
Suppliers
The Group recognises that key suppliers and outsourced service providers can have a material impact on the long- term success of the business and so incorporates the interests of these stakeholders when making strategic long- term decisions. The Group believes that having due regard to the interests of these suppliers is a dynamic and ongoing process which requires thoughtful monitoring and assessment, and a willingness to engage with those suppliers to better understand their operating constraints and business development plans.
Employees
The Group is committed to being a responsible employer and the Directors recognise that for our businesses to succeed, we need to manage our employees’ performance through mentoring and structured training, and develop and encourage talent, ensuring that we operate as efficiently as possible.
High standards of business conduct
Maintaining a high standard of business conduct when dealing with stakeholders such as regulatory bodies is vital for the subsidiaries. The subsidiaries are regulated by the FCA and the Directors are very aware of the need to keep up to date with industry regulations and best practice. The subsidiaries recognise the importance of meeting their reporting obligations to the FCA and take client confidentiality and data protection very seriously as set out in our privacy notice on our website which is reviewed regularly.
The community and the environment
In their decision making, the Directors need to have regard to the impact of the Group’s operations on the community and environment. Wherever possible, the Group encourages carbon friendly business practices as evidenced by giving all staff the ability to work from home if possible.
On behalf of the board
The Directors present their annual report and financial statements for the year ended 30 June 2025.
The Directors who held office during the year and up to the date of signature of the financial statements were as follows:
Dividends declared after the year end and up to the date of approval of these financial statements totalled £108,951.
The business’s principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to finance the business's operations.
In respect of bank balances, the liquidity risk is managed by maintaining a sufficient cash reserve at the bank to allow for short term net cash outflows. The firm’s cash is held in accounts that pay a competitive rate of interest.
Trade debtors are managed in respect of credit and cash flow risk through the Terms & Conditions of our engagement with clients and professional advisers, and through the regular monitoring of amounts outstanding for both time and credit limits. Retail client fees are taken directly by the custodian from client accounts operated by the custodian, thus mitigating credit risk associated with this aspect of the business. Trade creditors’ liquidity risk is managed by ensuring sufficient funds are available to meet liabilities when they fall due.
At all times the Directors must ensure that they meet the capital adequacy requirements stipulated by the Financial Conduct Authority, which must be reported periodically via the FCA Gateway.
Just Audit Limited has completed the sixth year of appointment and the Directors intend to appoint Just Audit Limited for a further year.
After making enquiries, the Directors have a firm expectation that the Group has resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and Group financial statements.
The Directors' responsibilities statement that the Directors agree to is detailed on page 10.
We have audited the financial statements of Tacit Holdings Limited (the 'parent company') and its subsidiaries (the 'Group') the year ended 30 June 2025 which comprise the Group profit and loss account, the Group balance sheet, the company balance sheet, the Group statement of changes in equity, the company statement of changes in equity, the Group statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the parent company and the Group and the industry in which it operates and considered the risk of acts by the parent company and the Group that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006, UK tax legislation, and FCA regulation, recognising the regulated nature of the Group's activities. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the parent company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The Group profit and loss account has been prepared on the basis that all operations are continuing operations.
The Group has no recognised gains or losses for the year other than the results above.
As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £560,439 (2024 - £440,844 profit).
In the application of the Group’s accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The preparation of the financial statements can require management to make judgements, estimates and
assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the
amounts reported for revenues and expenses during the year.
(i) Impairment of Goodwill
The Group establishes a reliable estimate of the useful life of goodwill arising on business combinations. This estimate is based on a variety of factors such as the expected use of the acquired business and the expected useful life of the cash generating units to which the goodwill is attributed. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired, in accordance with the accounting policy.
Tacit Holdings Limited (“the company”) is a private limited company limited by shares domiciled and incorporated in England and Wales. The registered office is 14 Hanover Square, London, W1S 1HN.
The Group consists of Tacit Holdings Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the Group. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
Parent company disclosure exemptions
In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS 102:
Only one reconciliation of the number of shares outstanding at the beginning and end of the period has been presented as the reconciliations for the Group and the parent company would be identical;
No cashflow statement has been presented for the company.
The consolidated financial statements consist of the financial statements of the parent company Tacit Holdings Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 June 2025.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
After making enquiries, the Directors have a firm expectation that income is expected to continue at at least current levels and that together with reserves the Group has resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and financial statements.
Discretionary fund management income
Ongoing discretionary portfolio management charges and fund management charges, based on the value of assets invested, are recognised during the period the assets are held in the portfolio of investment fund. Turnover is shown net of VAT and other sales related taxes.
Investment consultancy services
Turnover is recognised at the fair value of the consideration received or receivable for consultancy services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the Group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease.
The average monthly number of persons (including Directors) employed by the Group and company during the year was:
Their aggregate remuneration comprised:
2 Directors were participating in defined contribution schemes during the year (2024: 3).
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 30 June 2025 are as follows:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund.
The following are the major deferred tax liabilities and assets recognised by the Group and company, and movements thereon:
Other reserves arose upon acquisition of the subsidiary companies and represent the excess of fair value over nominal value of shares issued as consideration.
The profit and loss account includes all retained profits and losses.
At the reporting end date the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Dividends of £296,048 (2024:£485,243 ) were paid to the Directors and their close family.
During the year ended 30 June 2025, the Group paid £110,000 for consultancy services (2024:£82,500) to another company owned by a director and shareholder. As at 30 June 2025, no amounts were owed to that company (2024:£500).
During the year a subsidiary made advances to a Director of £5,289. As at 30 June 2025, the amount owing from the director was £29,664 (2024:£24,375). No interest is being charged on this loan and it is repayable on demand.
During the year a subsidiary made advances to a Director of £24,000 of which £14,000 was repaid during the year. As at 30 June 2025, the amount owing from the director was £9,195 (2024:£(805)). No interest is being charged on this loan and it is repayable on demand.