BR report 2018

Welcome to the fourth edition of the annual BR Industry Report Welcome to the fourth edition of the annual BR Industry Report. There have been very positive developments in the BR market since our last report, supporting our belief in the utility and value of BR to investors, investees and by extension, to UK PLC. The Patient Capital Review (PCR) resulted in major endorsement of Business Relief, with HM Treasury’s consultation response stating that, “The government will keep BR under review, and is committed to protecting the important role that this tax relief plays in supporting family-owned businesses, and growth investment in the Alternative Investment Market and other growth markets.” Not only that, but HMRC research reported that, in general, BR usage is genuine and in keeping with policy objectives. This looks like a weighty stamp of government approval and a massive message of support to the 12 million people employed by family businesses and the £4 billion invested via BR products. Perhaps not surprisingly, with the changing economic and political backdrop and the growing importance of efficiency within UK taxes, inheritance tax (IHT) has now come under the spotlight. The Office for Tax Simplification’s review is set to examine the complexities and technicalities of IHT. BR will not be a main focus, but there is a chance that any resulting changes could impact BR. But, we haven’t noted concerns — at least not about BR. There are plenty of other current considerations, from the record HMRC inheritance tax take during the last tax year and forecasts of ongoing increases, to demographic, health and economic shifts that are requiring more flexible, sometimes collaborative estate planning solutions. Under these circumstances, BR qualifying investments can be an important part of advisers’ toolkits. Our intention is to give advisers, planners and industry stakeholders the insights and investigations they need to confidently and appropriately navigate the BR market over the coming months. For those looking for the practical and mechanical aspects of BR, I’m also delighted to direct readers to Intelligent Partnership’s “Advisers’ Guide to Business Relief”. This is the first in our guides series and is designed as a common-sense, everyday resource covering rules, case studies and technical tips. GUY TOLHURST Managing Director Intelligent Partnership Editorial John Schaffer Lisa Best Creative Mar Alvarez Estela Alcay Sub-editing John Schaffer Lisa Best Research John Schaffer Lisa Best Alan Sheehan Van Li Katie McCarthy Marketing Michelle Powell Jeremy Gordon Print Palina Limited Copyright © Intelligent Partnership 2018 DISCLAIMER This publication is not included in the CLA Licence so you must not copy any portion of it without the permission of the publisher. All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means including electronic, mechanical, photocopy, recording or otherwise, without written permission of the publisher. This publication contains general information only and the contributors are not, by means of this publication, rendering accounting, business, financial, investment, legal, tax or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Neither the contributors, their firms, affiliates nor related entities shall be responsible for any loss sustained by any person who relies on this publication. The views and opinions expressed are solely those of the authors and need not reflect those of their employing institutions. Although every reasonable effort has been made to ensure the accuracy of this publication, the publisher accepts no responsibility for any errors or omissions within this publication or for any expense or other loss alleged to have arisen in any way in connection with a reader’s use of this publication. This publication is based on the authors’ understanding of the structure of the arrangements detailed, the current legislation and HM Revenue & Customs practice as at April 2018, which could change in the future. It is not an offer to sell, or a solicitation of an offer to buy, the instruments described in this document. Intelligent Partnership is not authorised and regulated by the Financial Conduct Authority and does not give advice, information or promote itself to individual retail investors. It is the responsibility of readers to satisfy themselves as to whether any arrangement contemplated is suitable for recommendation to their clients. Tax treatment depends on an investor’s individual circumstances and may be subject to change. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors. FOREWORD