BR Guide FINAL 20 Feb

45 CASE STUDIES REPLACEMENT PROPERTY RULES (INDIVIDUAL) SCENARIO: Roger invested £30,000 in an estate planning service a few years ago to mitigate a potential charge to IHT. He is now unexpectedly in need of funds to support his son’s business. SCENARIO: A small amount invested with conventional goals of investment growth can also contribute to IHT planning: John, in his late 50s expects to have £70,000 cash returned to him as his successful solar EIS investments exit. ONGOING ACCESS TO FUNDS EXITING SOLAR EIS INVESTMENT £70,000 Gives the prospect of meaningful growth over the next few years. Eases his concerns about reducing the IHT liability his beneficiaries will face while he considers other tax planning options. GROWTH P.A. 3% YEAR 1 £30,900 YEAR 2 £31,827 YEAR 3 £32,782 YEAR 4 £33,765 EXIT LESS DEAL FEE @ 1% £33,428 INVESTMENT PROFIT THE INVESTMENT HAD MADE A MODEST PROFIT OVER THE LAST FEW YEARS £33,428 £50,000 - RETIREMENT - HOLIDAYS - HOME IMPROVEMENTS £20,000 REINVESTED INTO BR QUALIFYING ASSETS Even if the £20,000 invested in BR qualifying assets is eventually needed to fund Alan’s lifestyle, the money is still accessible. As the investment was made with the intention of benefiting his son anyway, he sees no difference in unwinding it and making the funds available to his son. Roger invested £30,000 in an estate planning service with his son in mind £30K BR INVESTMENT ENCASHED AT CASE STUDY 3 CASE STUDY 4 (Assuming 1% exit deal fee)