BR report 2018

78 79 FINAL CONCLUSIONS KEY TAKEAWAYS BR IS LIKELY TO GROW IN POPULARITY With IHT receipts steadily rising, many people will be looking for estate planning solutions that can facilitate passing their life savings to the next generation. 3.9% of all UK deaths in 2014/15 lead to an IHT charge, and this proportion has been rising over the past years. Estate planning is now no longer the preserve of only the extremely wealthy. Home owners in London and the South East have become incredibly asset rich over the past two decades, while the nil rate band of £325,000 has been frozen for close to a decade. Our survey showed that 80% of advisers see their use of BR increasing over the next two years. This is unsurprising. Even with the addition of the residence nil rate band, a large amount of estates will still be liable for a significant IHT bill. MORE COMPETITION IS A GOOD THING Over the past few years, there have been more product providers entering into the BR space. This is a positive for investors - both in terms of competition on fees, and in terms of transparency (which is the top criteria for advisers when they are selecting BR investments for their clients). Competition also drives providers to select high quality underlying companies for their investments. INCLUSION OF AIM IS PROVING A POPULAR ADDITION Over 50% of open BR offers are now AIM quoted. With approximately a third of AIM shares being BR qualifying, BR is certainly boosting inflows into this secondary market. With some AIM BR offers having the ability to be included within an ISA, it is making BR more accessible to retail investors - although notably ones that would normally be defined as mass affluent. The (generally) smaller companies that are quoted on AIM do present a greater risk factor than FTSE securities. However, BR qualification is encouraging investors to hold these investments, with the added incentive of tax relief. This is of course fantastic news for growing companies that might otherwise struggle to receive patient capital. REPORT CONCLUSIONS BR’S SUPPORT OF UK BUSINESSES IS PARAMOUNT, ESPECIALLY WITH BREXIT ON THE HORIZON With IHT receipts steadily rising, many people will be looking for estate planning solutions that can facilitate passing their life savings to the next generation. 3.9% of all UK deaths in 2014/15 lead to an IHT charge, and this proportion has been rising over the past years. Estate planning is now no longer the preserve of only the extremely wealthy. Home owners in London and the South East have become incredibly asset rich over the past two decades, while the nil rate band of £325,000 has been frozen for close to a decade. Our survey showed that 80% of advisers see their use of BR increasing over the next two years. This is unsurprising. Even with the addition of the residence nil rate band, a large amount of estates will still be liable for a significant IHT bill.