Looking after your family's future
Here we look at some situations where clients comfortable with the associated risks could benefit from Business Property Relief-qualifying investments for inheritance tax planning. Nothing should be taken as investment advice or recommendation.
Clients who want access and control e.g. for care fees
Clients retain access to 100% of their BPR - qualifying investment and can make regular withdrawals if needed (subject to liquidity being available).
Clients who need a fast inheritance tax situation
Investments in BPR-qualifying shares will be exempt from inheritance tax after just two years, provided they are still held at the time of the investor's death.
Clients with a Power of Attorney in place
BPR-qualifying investments may be a suitable investment where gift or trust transfers are restricted or prohibited under Court of Protection rules.
Business owners looking to exit
Clients disposing of a BPR-qualifying business can reinvest some or all of the proceeds into new BPR-qualifying shares within three years and benefit from immediate relief from inheritance tax on their new investment.
Clients with large ISA portfolios
Transferring ISAs into an ISA that is invested in BPR-qualifying shares provides inheritance tax exemption on the ISA portfolio after two years.
Clients looking to settle assets into trust
Settling BPR-qualifying investments into a discretionary trust does not incur a 20% lifetime charge.
Key risks of BPR-qualifying investments:
The value of a BPR-qualifying investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.
Tax treatment depends on individual circumstances and could change in the future. Tax relief depends on portfolio companies maintaining their qualifying status.
The shares of smaller and unquoted companies could fall or rise in value more than other shares listed on the main stock market of the London Stock Exchange. They may also be harder to sell.