TRANSPARENCY
√
Investments are managed
under a carefully designed
investment strategy.
SIMPLICITY
√
No restrictions on health,
age or occupation. Subject to
customary checks required by
law, your investment should
be complete shortly after
application.
PROTECTION
√
Investments are usually
based upon conservative
strategies that target capital
preservation and low risk
growth.
CONTROL
√
You retain beneficial
ownership of your
investment and can access
your funds. Other methods
can require you to give up
control of your assets.
EFFICENCY
√
The value of your investment
is fully exempt from IHT
after only two years. Other
methods can take up to
seven years.
WHY BPR ?
13
SPEED
One final point: everything so far
discussed is based around the concept
of long term financial planning. But of
course sometimes getting something
in place quickly is the priority - maybe
because a client is terminally ill or
has simply put off the rather morbid
task of estate planning for too long.
BPR investments qualify for 100% IHT
relief within 2 years - gifts and trusts
take 7, so BPR investments are easily
the quickest way of placing assets
outside of the estate and mitigating
IHT (however, it is important to note
that the 2 years starts from share
ownership, not from writing the cheque
for the investment manager).
What is clear is that IHT planning is an
area where advisers are perceived to
add value more than almost any other:
73% of consumers are not confident
that they could effectively reduce their
IHT liability without professional advice
(GetAdvised campaign research).
CONCLUSIONS
So a frozen nil rate band and rising
asset prices mean more households
than ever are captured by IHT. Whether
the Treasury can do without this money
is debatable, but what we do know is
that planning for longer retirements
is difficult and makes estate planning
more complex - some clients will want/
need to stay invested and grow their
wealth and many will want to retain
access to their funds in some way.
The nil rate band is frozen at
£325,000 until at least 2018
Over 1 in 20 estates have an IHT
liability today
By 2018, almost 10% of estates
will be liable for IHT
The average house price in
Greater London is over £400,000 and
over £330,000 in the South East
House prices are forecast to
increase by 20% over the next five
years
An ageing population means
individuals require income for longer
Savings and pension pots are
spread thinner
Interest rates remain frozen at
0.5%
Greater access to pension funds
will require advice and more
innovative solutions
SOME KEY DRIVERS
“BPR products do not require investors to make irreversible decisions”
