IFA trying to sell me on inheritance tax avoidance strategy for my mother (who has dementia)

TheGreenFrog

[Deleted User] said:

Turns out the scheme is a diverse investment portfolio in unquoted companies that have BR relief: https://www.ftadviser.com/investments/2024/01/04/what-advisers-need-to-understand-about-the-business-relief-system/, and 'which should' keep pace with inflation.

A ridiculous proposal given your mother’s situation and assets.   I would also be very suspicious of any other advice given by that IFA.

Linton

Was the adviser really an IFA?  I cannot see any advantage for an IFA in pushing such a product. On the other hand a plain FA (ie salesman) could well do so.

Sarahspangles

I’d have declined simply because I despise cross-selling. If you were in the market for a product like that you’d have been asking about it.

MarkCarnage

Sounds totally inappropriate, and I would be having serious doubts about the competence and integrity of the adviser. Time to look elsewhere maybe. 

Grumpy_chap

Forgive me if I have missed it, but the OP does not seem to have clarified the fundamental question as to whether, after allowing for IHT thresholds (allowances / exemptions) and the cost of funding care (whether an immediate needs annuity or otherwise) plus any ongoing costs of living expenses, the Mother will be likely to leave an Estate liable for IHT.

Ibrahim5

Surely the IFA will be able to make an enormous amount of fees from the arrangements. That's what really matters. Are you sure about the annuity? Most people don't need care for very long. In my opinion the only people who would buy them would be those with unrealistic opinions of life expectancy.

LHW99

Ibrahim5 said:

Surely the IFA will be able to make an enormous amount of fees from the arrangements. That's what really matters. Are you sure about the annuity? Most people don't need care for very long. In my opinion the only people who would buy them would be those with unrealistic opinions of life expectancy.

Just to add a different spin - some people need an immediate care needs annuity when old age catches up with them, some people want an annuity to ensure that their spouse has an uncomplicated income after their passing, some people want an annuity to protect against "losing their marbles" and not being able to cope with drawdown as they get older, some people just want an annuity for the certainty it brings....

Whether you pay an adviser, or pay commission to a company, buying annuities will cost money. The question is whether given your age, your finances and your requirements whether the income you receive at the end does the job you want.

TheGreenFrog

There is a tax benefit attached to immediate needs annuities.  I have no practical experience of them to know whether or to what extent this benefit is in effect eroded by pricing.

starving_artist

TheGreenFrog said:

There is a tax benefit attached to immediate needs annuities.  I have no practical experience of them to know whether or to what extent this benefit is in effect eroded by pricing.

The 'income' payment is non taxable if it is paid direct to a registered care provider.