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Octopus Inheritance Tax Service
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Thanks Harry, can't believe that Octopus have 75% of the VCT market though, there are many other significant players out there.0
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The scheme could probably be best considered for those in ill health, or those who have a good reason to want to retain ownership of their assets in their lifetime.
You could also add those with a large potential IHT liability ?as presumably if the potential IHT liability was less than say £100K tax it would probably not be worth the bother and cost of getting involved in such schemes ?
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Many thanks for your detailed reply, HappyHarry.
If the govt withdrew the IHT benefits of this type of scheme - which, given they are looking at all options for new tax raising measures, must be a possibility - is there a significant risk of a high volume of withdrawal requests, potentially leading to gating/delays and Octopus potentially having to fire-sale the assets at low prices?0 -
Yes, that is always going to be a hazard of these types of IHT avoidance schemes. The legislation eventually catches up with them, as it did when the focus was on using EIS.No free lunch, and no free laptop0
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aroominyork said:Many thanks for your detailed reply, HappyHarry.
If the govt withdrew the IHT benefits of this type of scheme - which, given they are looking at all options for new tax raising measures, must be a possibility - is there a significant risk of a high volume of withdrawal requests, potentially leading to gating/delays and Octopus potentially having to fire-sale the assets at low prices?
In reality, no government is going to get rid of BPR. This is what small business rely on to keep going past the death of their owner. Imagine a 50 person business owned by the founder who then dies. Without BPR, 40% of the value of the business would be due in IHT. This would likely mean the closure of the company, and redundancy for the workers. It would be a regressive tax policy with consequences that would be unpalatable even to the far left of our political parties.
I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.3 -
HappyHarry said:aroominyork said:Many thanks for your detailed reply, HappyHarry.
If the govt withdrew the IHT benefits of this type of scheme - which, given they are looking at all options for new tax raising measures, must be a possibility - is there a significant risk of a high volume of withdrawal requests, potentially leading to gating/delays and Octopus potentially having to fire-sale the assets at low prices?
In reality, no government is going to get rid of BPR. This is what small business rely on to keep going past the death of their owner. Imagine a 50 person business owned by the founder who then dies. Without BPR, 40% of the value of the business would be due in IHT. This would likely mean the closure of the company, and redundancy for the workers. It would be a regressive tax policy with consequences that would be unpalatable even to the far left of our political parties.0 -
aroominyork said:HappyHarry said:aroominyork said:Many thanks for your detailed reply, HappyHarry.
If the govt withdrew the IHT benefits of this type of scheme - which, given they are looking at all options for new tax raising measures, must be a possibility - is there a significant risk of a high volume of withdrawal requests, potentially leading to gating/delays and Octopus potentially having to fire-sale the assets at low prices?
In reality, no government is going to get rid of BPR. This is what small business rely on to keep going past the death of their owner. Imagine a 50 person business owned by the founder who then dies. Without BPR, 40% of the value of the business would be due in IHT. This would likely mean the closure of the company, and redundancy for the workers. It would be a regressive tax policy with consequences that would be unpalatable even to the far left of our political parties.
Again, theoretically yes, but it means discriminating against certain business owners, many of whom will genuinely be taking some risk.
There are far easier targets to go for. BPR cost the government £710m according to this link (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/737597/Dec_17_Main_Reliefs_Final.pdf)
and I expect that the majority of that will be for "genuine" owners. Compared to the £24bn pension scheme tax relief costs, I can't see BPR being very high on the agenda.I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.1
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