How to help your clients make the most of BPR
- Learn about the changes to business property relief
- Gain an understanding of how to apply it
- Ascertain how advisers are using it for their clients
- Learn about the changes to business property relief
- Gain an understanding of how to apply it
- Ascertain how advisers are using it for their clients
Recent surveys and an adviser round table event has found that advisers would like to see the government provide more vocal support for Business Property Relief.
Business Property Relief (BPR) is a statutory relief that provides 100 per cent relief from Inheritance Tax (IHT) for investors who are holding shares in qualifying businesses, and have done so for at least two years, upon their death.
A number of investment managers offer consumers investment solutions that benefit from BPR, but knowledge about these among the average investor is low.
As part of research conducted for Intelligent Partnership's 2016/17 BPR Industry Report, we surveyed 120 advisers and hosted a roundtable discussion on the topic.
Advisers highlighted that wider awareness of BPR remained very low and called on the government to do more to heighten awareness and engagement.
Yet some advisers said once the relief had been explained, clients were interested. Christopher Green, of Christopher J Green Wealth Management noted: “Very, very few [clients] will have heard of BPR before, so when you introduce it to them and explain the benefits, they react very positively."
Political support
When asked what developments they would like to see in the market for BPR qualifying investments, advisers indicated that they wanted evidence of more support from policy makers - particularly in respect of whether the government intended to maintain the relief or cut it during a future Budget.
Neil Cole, director of Wealth Planning Product Development & Management at UBS, said: “I would like to see more vocal support from the government.
BPR is an area that advisers are increasingly interested in, and with so many new offers launching, there is more work for them to do. Guy Tolhurst"At the moment there is always a nagging doubt that at some point the government will take a look at the amounts going into BPR, decide it is too much and make a change. There is a lot of support for venture capital trusts (VCTs) and enterprise investment schemes (EIS) and I would like to see that replicated for BPR.”
Mr Green said: “I agree. Stop keeping it a secret. This is one option that has been around for a while but has not scratched the surface of the mass market - the additional risk excepted.”
The survey also revealed that advisers would like to see an advanced assurance procedure in place for BPR, similar to the advanced assurance HM Revenue and Customs (HMRC) provides for EIS qualifying investments.
