Steady returns with
Access and control
in case plans change
An additional service to plan for complex health and care needs
As people are living for longer and spending more time in retirement, they have a number of important objectives, both for themselves and their beneficiaries.
Whilst investments focused on capital growth can increase an investor’s savings throughout their life, in the absence of efficient tax planning, Inheritance Tax (IHT) liabilities can ultimately leave beneficiaries with a poor outcome. On the other hand, by focusing too much on just IHT planning and ignoring how their wealth is being invested, investors may be left with little or no growth in their savings, whether that be due to the negative impact of poor investment management, volatility, or high fees – all of which may reduce an investor’s options in later life.
Whilst prudent investment management can deliver steady, consistent returns to maintain and grow an investor’s wealth, the value available to their beneficiaries on death can be significantly reduced by IHT, meaning they may not achieve the outcome they desire. Business Relief (BR)-qualifying investments like Ingenious Estate Planning can reduce the impact of IHT whilst allowing investors to retain control over their money for unexpected circumstances.
IEP investors acquire shares in one or more portfolio companies that are engaged in a BR-qualifying trade. This means any transfer of the shares should be free of IHT after just two years (or sooner if the investment constitutes replacement business property).
We understand it is important for investors to maintain control of their assets. There are several ways in which IEP investors can, subject to liquidity, access their investment, including regular draw-down of growth, set annual payments, emergency payments or partial or full redemption.
Just as IHT can reduce the value of an investor’s savings, Capital Gains Tax (CGT) can reduce the value of withdrawals for all-important life needs. Incoming investors into IEP will receive newly issued shares, so after three years, a disposal of the shares should qualify for Investors’ Relief. This means that the applicable rate of CGT should be 10% rather than the higher rate of 20%.