Inheritance Tax Portfolios
Inheritance tax, or IHT, is generally considered the most unfair tax of all.
It could apply on estates over the value of £450,000. This is made up of the “residence nil rate band” of £125,000 plus the current “nil rate band” of £325,000. Anything over this could potentially be subject to 40% tax on death, or your spouse's or partner's death if later.
The good news is that careful planning can reduce or even wipe out completely your estate’s IHT liability without losing control of your assets in your lifetime.
One of the many ways to shelter your wealth from IHT is to invest in assets that qualify for Business Property Relief (BPR). You can:
- Invest unlimited amounts in unquoted or some AIM companies
- Hold AIM investments in your ISA, so you can benefit from tax-free growth and tax-free income
- Save up to 40% in IHT
- Retain control and ownership of your investment
- Select investments that aim to pay you a regular income and/or help preserve capital
- Full IHT relief after just 2 years under current rules – quicker than with most other IHT-mitigation strategies
In 2016/17 bereaved families poured £4.8 billion into the government’s IHT coffers.
And it’s going to get worse, official estimates warn. According to the Office for Budget Responsibility, inheritance tax receipts are expected to rise to £6.4 billion in 2022 – a 32% increase. Despite the ‘residence nil rate band’ introduced in April 2017 the Treasury expects to raise nearly £2 billion more in inheritance tax over the next five years than previously estimated.
When the residence nil rate band comes fully into effect in 2020, couples will be able to jointly pass on a home worth up to £1 million tax free.
Happily, investing in IHT schemes can be straightforward – just visit the offers page to see the available opportunities. Before you invest you should also ensure you have read and understood our terms of business and the Risks and Commitments. The two-year IHT-clock starts ticking once your funds have been invested.
Please remember IHT schemes are the only IHT planning solution we offer, but there are others you could consider. If in doubt, please seek specialist advice.