BPR and IHT and ISA

minimumcost

I have a situation whereby an appreciating estate (wife and deceased husband) is likely to exceed the £1m exemption limit for IHT. I'd like to use BPR to take around £100k, that will otherwise be subject to the 40% tax, out of the equation. The family doesn't have a business, so this means investing in a vehicle such as an AIM fund of an IHT planning company like Octopus or Triplepoint. I don't have the time to select and manage a portfolio of individual companies.

I'd very much appreciate some initial thoughts on how to find the right place to put the money? ...And how to do it within an ISA wrapper.

Albermarle

It seems a lot of potential effort to avoid paying what will probably not be a lot of IHT ( as the estate has not yet reached the limit, I assume it will never go massively over it)
Much simpler ways to avoid paying IHT are to
1) Gift  money to relatives and hope you survive 7 years ( even if you do not you have not actually lost anything)
2) Gift money to charity ( no 7 year rule here)
3) Increase spending and enjoy the money.

In any case our new tax cutting chancellor may abolish IHT or at least unfreeze the limit.

minimumcost

Albermarle said:

It seems a lot of potential effort to avoid paying what will probably not be a lot of IHT ( as the estate has not yet reached the limit, I assume it will never go massively over it)
Much simpler ways to avoid paying IHT are to
1) Gift  money to relatives and hope you survive 7 years ( even if you do not you have not actually lost anything)
2) Gift money to charity ( no 7 year rule here)
3) Increase spending and enjoy the money.

In any case our new tax cutting chancellor may abolish IHT or at least unfreeze the limit.

None of these work. 92 years old, doesn't want to buy anything. Charity donation still counts in the IHT calculation and only reduced the charge a little.

What's the easiest way to put £100k into BPR qualifying investments?

Linton

Bearing in mind this is a forum for comments, not for getting formal advice.....

Are you the 92 year old?

If so in my view sophisticated inheritance planning of £100Ks should be left to professionals.  If you dont know the answer to your question you should not be doing it.

If you are not the 92 year old what is your role?  If it's under Power of Attorney I believe you could be acting beyond the authority that you get under PoA in thart it is difficult to see how buying business property, directly or indirectly, at 92 is in the interests of the donor. In any case doing these sorts of things with other people's money is again best left to regulated and qualified professionals.

wjr4

Are you the power of attorney? Has she got existing ISAs? An existing financial adviser? 

Albermarle

 Charity donation still counts in the IHT calculation 

AFAIUI . Charitable gifts given during a lifetime or in a will, are exempt from IHT.  

xylophone

Charity donation still counts in the IHT calculation and only reduced the charge a little.

https://www.gov.uk/donating-to-charity/leaving-gifts-to-charity-in-your-will

minimumcost

My mother. I have PoA. She doesn't need to cover care costs as she has significant pension income. The estate exceeds the IHT limit. She wants the money to go to her family, not charity. We have an ex Sungard executive, 2 accountants and a derivatives trader in the family. We don't need a FA. While we understand the theory and principles we don't know the industry. As per IanManc's last para we want to get past the BS and work out how to invest in BPR qualifying assets without the associate costs.

We want to invest a small % of her assets to avoid paying 40% tax on them. So... in your opinion...

What's the easiest way to put £100k into BPR qualifying investments?