BR report 2018

67 66 DOWNING ADAPT IHT PORTFOLIOS ABOUT DOWNING Downing LLP is a London-based investment management firm. We help UK businesses grow by investing via our range of enterprise investment scheme (EIS), venture capital trust (VCT), inheritance tax (IHT), individual savings account (ISA) and open- ended investment company (OIEC) products. In addition, in March 2016, we established our own crowdfunding platform. So far, over 35,000 investors have been a part of what we do, and we are proud to have raised over £1.7 billion for businesses that make a difference, including renewable energy, care homes, health clubs, pubs and children’s nurseries. We currently have over £1 billion of funds under management (as at December 2017). OUR ESTATE PLANNING SOLUTIONS Our estate planning solutions enable investors to obtain full IHT relief on their subscriptions after only two years (provided the shares are held at death). We also provide Downside Protection Cover on death under the age of 90, covering a loss in value of up to 20% on the net initial investment – no medical questionnaires or exclusions for pre- existing conditions, and no extra cost. We offer four BR services, including: Downing Estate Planning Service (DEPS): DEPS offers an additional Life Cover option (subject to higher fees) designed to mitigate the effect of IHT for those under the age of 85 from the date the shares are acquired, for the first two years before IHT relief begins. The policy covers 40% of the gross initial investment upon death within two years. Subject to terms and conditions. Downing AIM Estate Planning Service: Obtain IHT relief after only two years by owning a portfolio of AIM-quoted companies. Downing AIM ISA: Combine IHT relief after two years with ISA tax benefits through a portfolio of AIM-quoted companies. Investors can transfer part or all their existing ISAs to Downing. Capital is at risk. Prospective investors should be aware that the value of their investment may go down as well as up. There is no guarantee that the valuation of shares will fully reflect their underlying net asset value, or that investors will be able to buy and sell at that valuation or at all. Please refer to the relevant product literature and terms and conditions. HOLDING IN DEPS ENERGY: SOLAR 17% ENERGY: AD 24% ENERGY: WIND 2% ENERGY: HYDRO 0% ENERGY: OTHER 3% ASSET-BACKED: PROPERTY 12% ASSET-BACKED: PUBS 5% ASSET-BACKED: HOTELS 5% ASSET-BACKED: CARE HOMES 17% ASSET-BACKED: LEISURE 0% ASSET-BACKED: DATA CENTRES 11% CASH 2% INGENIOUS IEP CARE ABOUT INGENIOUS Ingenious is an investment manager, providing investment opportunities to individuals, family offices and institutions across three unique and diversified sectors: media, infrastructure and real estate. Since our inception in 1998, clients have trusted us with over £9bn which we have deployed across our range of carefully designed investment strategies. We have invested over £1.3bn into Business Relief (BR) qualifying investments. We pride ourselves on our ability to find the hidden angle, identifying innovative investment opportunities within those sectors which are uncorrelated to the stock market, have reliable cash flows and are complementary to our investors’ portfolios. Sector knowledge is at the core of our investment philosophy and our investment teams are comprised of specialists with experience operating and managing businesses within these sectors, in turn mitigating risk and maximising returns for our investors. Our investment teams operate within a robust professional infrastructure with expertise spanning across accountancy, tax, law and compliance. We build strategic partnerships with our investors and their advisers, working together to understand individual financial objectives and consistently providing compelling solutions which meet these as they evolve. IEP CARE – OUR BR OFFER IEP Care provides a simple and unique solution to help investors plan for the potential costs of long-term care while aiming to preserve and grow their capital. It is designed to be fully integrated with a wider estate planning strategy to help protect an investment from the potential impact of inheritance tax (IHT). IEP Care offers investors access to compelling Business Relief (BR) qualifying investments – shares in unquoted trading companies which should become exempt from IHT after being held for two years – across our three chosen sectors: media, real estate and infrastructure. As well as targeting an annual return of between 3-5% per annum (net of fees), IEP Care gives investors the ability to access their investment should their circumstances change unexpectedly. The service comes with the additional benefit of an exclusive partnership with specialist care advisers, Grace Consulting, who provide free and unlimited long-term care guidance to investors. INVESTMENT CASE STUDY In October 2017, Ingenious Real Estate provided a £21m loan to an experienced developer to facilitate the construction of 50 units in Kingston upon Thames. The completed development is projected to be valued at £32m and will comprise 39 private flats and houses, 10 affordable units and a commercial unit pre-let to a national convenience store. The development will be constructed over 18 months, with payments certified by an independent monitoring surveyor and progress monitored by our dedicated portfolio management team. The developer was selected for funding on account of its impressive track record. Loan repayments will occur gradually, with instalments being triggered by each individual unit sale. Ingenious Real Estate represents one of Ingenious’ three core sectors, alongside media and infrastructure, which invest into BR qualifying companies on behalf of investment services such as IEP Care. WHY IEP CARE? EFFICIENCY The value of your client’s investment should be fully exempt from IHT after only 2 years. Other methods can take up to 7 years. TRANSPARENCY Investments are managed under a carefully designed investment strategy. Your client will be provided with regular performance updates and access to a dedicated support team. PROTECTION A conservative investment strategy designed to carefully grow and preserve the value of your client’s investment. CONTROL Your client retains beneficial ownership of their investment and can access their funds as needed. Other methods can require investors to give up control of their assets. SIMPLICITY No restrictions on health, age or occupation. Subject to customary checks required by law, your client’s investment should be complete shortly after application. SUPPORT Your client will have free and unlimited access to Grace Consulting, the UK’s premier independent consultant on care options. INVESTMENT CASE STUDY DOWNING ESTATE PLANNING SERVICE (DEPS) Life Cover is designed for those under 85 to mitigate the effect of IHT from the date shares are acquired; the policy covers 40% of the original gross investment on death in the first two years. The illustration below shows the IHT liability with and without Life Cover, if the client dies 18 months after investing in DEPS. Life Cover is subject to conditions and will not pay out if they are not met in full. The example assumes no growth or loss, that the investor utilises the nil rate band elsewhere and that they pay an adviser charge of 2%. After two years, Life Cover will expire and automatically switch to Downside Protection Cover (provided it is available at that time), designed to reduce the impact of a loss in value of up to 20% of the net initial investment for those aged up to 90 years. WITHOUT LIFE COVER WITH LIFE COVER INVESTMENT IN DPS £250,000 £250,000 ADVISER CHARGE AT 2% £5,000 £5,000 DOWNING INITIAL CHARGE AT 2% £4,900 £4,900 NET ASSETS £240,100 £240,100 COST OF LIFE COVER £0 £9,475 IHT AT 40% £100,000 £100,000 LIFE COVER PAYOUT ON GROSS SUBSCRIPTION £0 £100,000 NET ESTATE £140,100 £220,625 As at 30 September 2017 Ingenious is a trading name of Ingenious Capital Management Limited, which is authorised and regulated by the Financial Conduct Authority under Firm’s Reference Number 562563. The value of an investment may go down as well as up and investors may not get back the full amount invested. Tax treatment depends on the individual circumstances of each client and may be subject to change in future. Past performance is not a reliable indicator of future results. Investments made by the Manager are in unquoted companies and are therefore likely to have less liquidity than listed shares.