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OVERALL ANALYSIS
This section will take a look at the
current market for inheritance tax
planning products that utilise business
property relief. The analysis is based
on data that has been collected in our
investment register and we believe the
register captures the great majority of
the products that are currently available
in the market, as well as a handful of
products that are now closed to new
funds. However, as BPR products are
unlisted, while we are confident that
we have a representative sample, we
cannot be certain that we have captured
the entire market.
This register has been compiled through
extensive primary research, access to
data on the MICAP Fund Finder platform
and with the gracious participation of
BPR product providers. The register
includes data on over 50 investment
products comprised of single company,
discretionary portfolios and UCIS
products.
The overall aim of the register and this
analysis is to help advisers understand
the BPR market and the range of
solutions available to them within this
asset class. Hopefully this information
will help them better serve their clients.
When compiling the register we
collected information on the legal
structures, underlying investments,
minimum investment levels, targeted
returns and level of charges.
The information included in this register
has been analysed to identify emerging
trends within the market. It does not
single out individual products for praise
or criticism. The objective is to simply
provide an overall picture of the BPR
market to enable investors and advisers
to make their own appraisal.
For clarification, whilst EIS and SEIS
investments both incorporate BPR
as part of their inherent benefits,
the market analysis in the rest of this
report focuses on investment products
which have been structured purely for
inheritance tax planning in its wider
sense (BPR products) and therefore
no account is taken for EIS and SEIS
investment.
OBJECTIVES
Our aim in compiling the investment
register and carrying out the
subsequent analysis is to help readers
acquire whole-of-market awareness
of the BPR sector. There are many
different investment products available
that utilise BPR, covering a range
of legal structures, manager styles,
underlying investments, and risk and
return profiles. Gathering as much
of the available information as we
can together in one place will help
advisers develop their understanding
of the opportunity and decide if BPR
investments are right for their clients.
The register and analysis aim to:
provide a snapshot of the market at a
point in time (Q1 2015)
look at the growth of the market over
the last 20 years
include insight and analysis into the
types of BPR qualifying investments
available
compare the features and benefits of
the various product categories
The information included in this register
forms the basis of our unique analysis
on the BPR market. To the best of our
knowledge, data of this kind has not
been collected and analysed in this way
before and is not available elsewhere.
DATA COLLECTION
We began the data collection process by
assimilating all of the publicly available
information, with the help and support
of current service providers such as
Tax Shelter Report and MICAP. We also
scraped product provider websites and
online marketing materials for data.
As part of stage two of the data
collection process providers were
contacted and asked to verify the
details we had on record about their
current investment offerings (and
provide further supporting information
where required). This initiative was well
received by the majority of providers
and was essential to ensure that the
information used in our analysis was as
accurate as possible.
CHALLENGES AND
LIMITATIONS
It is important to clarify that there are
some limitations to our data collection
process that may have an impact on the
final analysis.
The information included on the
register is limited to those investments
that are openly marketed. There is
currently no comprehensive register
for BPR investments that we are aware
of (though MICAP just having launched
will potentially eliminate this problem)
so there may well be products that are
open and available that we have not
been made aware of.
Secondly, unfortunately not all of
the BPR product providers engaged
with the data verification process.
Every BPR provider was given the
opportunity to participate, and it was
very encouraging to receive a high
level of support, but inevitably there
were a number of providers that chose
not to participate – perhaps due to
understandable apprehensions about
disclosing commercially sensitive
information for inclusion in a new and
unfamiliar report. We feel that although
this step is missing, it is not essential.
Provided that those providers’ publicly
available information was accurate,
then the data in the register will be
accurate. However, the fact that the
data verification second check step was
not comprehensive does increase the
possibility of inaccuracies creeping into
the report.
Finally, our data collection process
means that there is an in-built bias
towards the most recent investment
opportunities as these are the easiest
to identify and collect data on. BPR
products have not been widely reported
on in the past, so the existence of , and
data on, many historical products can
be difficult to capture. We’re not able
to quantify the impact of this, but logic
tells us that the later the period we
are looking at the more accurate the
analysis is.
