INVESTMENTS
THREE TIPS IF YOU ’ RE NEW TO INHERITANCE TAX INVESTMENTS
If you ’ re new to the world of investments that qualify for Business Property Relief ( BPR ), what are some practical steps you can take to help you write this kind of business ? In an Octopus Online Show last year , we spoke to Mark Greenwood , Director of Compliance Services at SimplyBiz , and we asked him for his top tips for approaching this area of business .
BPR explained “ Historically , tax-efficient investments like BPR were seen as non-mainstream ” says Mark . “ But over the years we ’ ve seen an increase in business written in these areas . “ Advisers are looking to go beyond the basic standard of planning for clients . And that ’ s where these kinds of solutions tend to come into play .”
So , what is BPR ? BPR-qualifying investments encourage individuals to invest in unlisted trading companies , or those listed on the Alternative Investment Market ( AIM ). These are higher risk investments than main-market equities . To compensate for some of that risk , the estate of an investor can claim 100 % relief from inheritance tax , as long as shares had been held for at least two years when the investor died . As this is simply an investment , unlike other forms of estate planning there is no need to give away wealth while alive . The qualifying shares are held by the investor until they die meaning they retain control of their wealth , and should they need to sell some or all of their investment to access their capital , they can do so , subject to liquidity . Making a qualifying investment can be effective more quickly than traditional estate planning options , such as lifetime gifts , which can take seven years to reduce the value of an estate . Being able to make investments that support trading businesses and that provide relief from inheritance tax has made BPR qualifying investments a compelling option for many clients planning their estate . Despite the growing popularity of BPR-qualifying investments , it can be perceived as a daunting area to get to grips with . So here are three helpful pointers from a compliance expert .
MAKING A QUALIFYING INVESTMENT CAN BE EFFECTIVE MORE QUICKLY THAN TRADITIONAL ESTATE PLANNING OPTIONS , SUCH AS LIFETIME GIFTS , WHICH CAN TAKE SEVEN YEARS TO REDUCE THE VALUE OF AN ESTATE .
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