Defaqto unveils tax shelter guide

Melanie Tringham

The independent financial research company Defaqto has launched a guide informing advisers about tax shelter investing.

The guide, called Business Property Relief – An Essential Financial Planning Solution, stated the importance for financial planning of business property relief, which removed assets from the client’s estate for IHT purposes.

Defaqto said that as the nil rate band had been frozen at £325,000 since 6 April 2009 – and is expected to remain frozen until at least 2018 – the increasing value of property meant a smaller proportion of the nil rate band was free for other assets.

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The report read: “These dynamics, coupled with the tightening of allowances within the more mainstream tax-efficient investments such as pensions, mean that investors are looking elsewhere for tax-efficient investing.

“We feel that this is an ideal time to introduce the subject to help our adviser colleagues navigate their way through the recommendation process.”

IFA verdict: Paul Clough, financial planner, Grainger Financial Planning, Sunderland:

“You’ve got some clients who are quite comfortable with stepping out of mainstream investments and I think BPR is not a mainstream investment. The bulk of clients don’t understand the complexity of this type of planning.”