Stellar Asset Management, a specialist in tax-efficient investing, has a new low-cost discretionary managed inheritance tax (IHT) portfolio service, designed to generate 4.5 per cent income and which will protect up to 100 per cent of capital.
The plan, Stellar Estate Planning Service (Steps), has monthly dealing and will invest in three sectors with low-risk attributions – renewable energy (mainly solar energy installations or wind farms), hotels and secured residential contracting. The product will also qualify for business relief, which means the client should be eligible for 100 per cent IHT relief after just two years.
Hotels, for example, will be acquired on a freehold or long leasehold basis, and Stellar will target undervalued and/or underperforming hotels in strategic locations outside London.
Although the investments are considered low risk, a further layer of protection is available in the form of an option to insure client portfolios against potential losses of up to 100 percent of the value of the investment.
Steps comes with an annual management chart of 1 per cent. The minimum investment for the product is £25,000 and it has an initial charge of 2 per cent. Non-advised clients will be subject to a 5 per cent initial charge and 1.5 per cent annual charge.
www.stellar-am.com
Comment:
IHT is one of the most disliked taxes of all. Despite only affecting a handful, it is undoubtedly a concern for many, but with careful planning, any losses could be mitigated. Anything that will help clients get some relief will be welcomed.
Stellar has pre-identified and completed due diligence on all investments in each trade, meaning money is invested quickly, which will also help ensure that 100 percent IHT relief can be granted as soon as possible.
The product charges are not massive amounts for someone who is concerned about going over the threshold. The service may stand out due to its unusual mix of investments, but the company undergoes strict due diligence before any investment, and it may be no riskier than holding an alternative investment fund, or a Sipp using commercial property.
This type of product could be well suited to someone with a large amount of assets which could go over the current £325,000 threshold.
