Partner Content by Octopus Investments

How John helped Cliff kickstart his estate planning

To be clear, Cliff is putting his capital at risk

John makes it clear to Cliff that the value of any BPR-qualifying investment, and any income from it, can fall or rise. Cliff may not get back the full amount he invests.

John also explains that BPR is assessed by HMRC on a case-by-case basis and that this assessment happens when an estate makes a claim. Entitlement to claim the relief will depend on the company or companies Cliff invests in qualifying for BPR at the time the claim is made. Tax relief will also depend on personal circumstances, and tax legislation could change in future.

While Cliff is not expected to need to access this pot of money during his life, the investment will remain in his name, and so he will be entitled to request a withdrawal should he need to. John makes clear that withdrawals cannot be guaranteed as the shares of unlisted companies can be harder to sell than shares listed on the main market of the London Stock Exchange.

Peace of mind

Cliff is comfortable with these risks and decides to act on John’s recommendation. He invests £1.8 million into a BPR-qualifying investment. Should Cliff be very unlucky and pass away tomorrow, he knows that Andrew and Nicole should inherit those shares without having to pay inheritance tax. As you can imagine, this represents valuable peace of mind for Cliff. 

At Octopus, we frequently work with advisers like John whose clients have sold a business. This is one of the scenarios we’ll be covering in The Estate Planning Show, a live, online show taking place on 12 and 13 May. We’ll look in-depth at the types of companies that BPR qualifying portfolios can be invested in and which clients they might be suitable for. We’ll also be exploring scenarios like the one above, to help you identify new and existing clients who might benefit from an estate planning conversation.

To take part, go to octopusinvestments.com/estate-planning-show/

For professional advisers and paraplanners only. Not to be relied upon by retail investors. 

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: April 2020. CAM009612.