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Inheritance Tax Planning Strategies
AIM Portfolio utilising Business Property Relief – straightforward managed portfolio of AIM listed securities with a minimum investment of £50,000. Qualifies for business property relief.
Principal residence scheme unaffected by Phizakerley. This scheme uses a home reversion transaction to provide a cash lump sum which buys an offshore whole of life contract. This can be given to the heirs. The whole of the property is held in an Isle of Man fund. After death the contract pays around 93.5% of the fund value. The property may then be repurchased by the beneficiaries benefiting from a reduced tax bill using the proceeds of the whole of life contract, which is linked to the fund value, thereby ensuring that future changes to the value of the property are taken in to account.
A debt scheme is available that lasts for between 5 and 10 years, which is useful as late life planning. This creates a large debt against an estate and so is immediately effective. The debt is independent of the principal private residence and so can cover inheritance tax payable on, for example, shares in a family or other investment company, or just plain rich!
Usual non contentious means of mitigating inheritance tax all useful such as Gift and Loan schemes, Discounted Gift Schemes, and dare I say it, good old fashioned life assurance.
An investment in a trading company (thereby attracting Business Property Relief) which in turn invests in a number of trades including commercial forestry, residential and commercial property development, managed public houses. Relatively low risk/low return and usual caveats applying to any property investment.
Managed Enterprise Investment Schemes and AIM portfolios. Qualify for Business Property Relief after 2 years – various offerings, can generate income and also some useful capital guaranteed schemes., that also carry liquidity availability (often an issue with AIM/EIS especially in the current market.
If you wish to discuss the above further or require information on any of our services, then please contact us.
Any reference to legislation and tax is based on FPP’s understanding of UK law and HMRC practice. These may be subject to change in the future. Tax rates and reliefs will also change and their value to you will depend on your individual circumstances. No guarantees are given regarding the effectiveness of any of the above strategies.