We advised Peter to invest the capital he had received from the sale of the business in to Enterprise Investment Schemes that qualified for Business Property Relief. This effectively meant that money would fall outside of his estate and would therefore be free from inheritance tax (IHT) after 2 years. Other benefits were that Peter was able to ‘hold-over’ the capital gains from the sale of the business and provided he didn’t sell the EISs within 3 years,he was able to reclaim some of the income tax he had paid in the previous tax years.
Effective estate planning is more than mitigating IHT, and also involves keeping access and control to your money. By investing in Enterprise Investment Schemes, Peter is able to access his investments as he would with other investment portfolios. With our help, he can keep an eye on his investments knowing that they will continue to meet his needs and making use of the different tax reliefs.
Know the risks: Investments that qualify for Business Property Relief, such as Enterprise Investment Schemes, can carry a higher degree of risk than ordinary mutual funds and may not be suitable for every client situation. It is important to take independent financial advice before making any decisions to invest in an EIS and there is a significant risk that you may not get back the same amount that you originally invested. The Financial Conduct Authority does not regulate trusts and some aspects of Inheritance Tax Planning.