What’s the catch?
Clients often want to know why it’s possible to save 40% inheritance tax by making a BPR-qualifying investment.
“There must be a catch,” they think.
The answer is simple. This tax relief exists as an incentive for investors to take on the risk of backing BPR-qualifying companies. These are small or unquoted businesses that are making a valuable contribution to the economy.
BPR-qualifying investments put a client’s capital at risk. The value of these investments, and any income from them, can fall as well as rise. Clients may not get back the full amount they invest.
Clients should also be made aware that tax treatment depends on individual circumstances and tax rules could change in future. In addition, tax relief depends on the companies they invest in maintaining their BPR-qualifying status.
The shares of unquoted and AIM-listed companies can be more volatile than shares listed on the main market of the London Stock Exchange. They may also be harder to sell.
Learn more at The Estate Planning Show
A strong knowledge of BPR can help you write inheritance tax business across the board, not just more BPR business, because it neutralises major client objections.
If you’re going to talk to clients about BPR, the more thoroughly you know the subject the better.
So tune in to The Estate Planning Show, a two-part online event on Tuesday 15 June and Wednesday 16 June at 10am.
The show will take you through a variety of estate planning opportunities and share expert tips on how to turn them into planning. Last year’s show was watched by thousands of advisers – so don’t miss it!
For more information, and to reserve your place, go to octopusinvestments.com/estate-planning-show/
Jessica Franks, Head of Tax
1More heirs hit by inheritance tax as families fall foul of gift rules, Financial Times, 4 December 2020
BPR-qualifying investments are not suitable for everyone. Any recommendation should be based on a holistic review of your client's financial situation, objectives and needs. We do not offer investment or tax advice. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London EC1N 2HT. Registered in England and Wales No. 03942880. Issued: May 2021. CAM011052
