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Passing on your wealth tax-efficiently
Investments that could qualify for relief from Inheritance Tax.
Business Property Relief (‘BPR’, also referred to as Business Relief) allows ‘Business Property’ to be passed on to the beneficiaries of an estate without being subject to Inheritance Tax.
To qualify for BPR, the Business Property must have been owned for at least two years and still be held at death. BPR is particularly important for business owners. For example, without BPR it would often be impossible for a family business to be passed from one generation to the next. If the company was considered part of the deceased’s taxable estate, the beneficiaries would most likely be forced to sell it in order to pay the Inheritance Tax liability.
But it is not just entrepreneurs who can benefit from BPR. Shares held in some types of unquoted trading companies can currently be classified as ‘Business Property’, regardless of whether the owner of the shares is directly involved in the management of the company.
Through the Oxford Capital Estate Planning Service we offer clients access to investments which could qualify for BPR. This is an investment opportunity which provides a straightforward method of acquiring shares in unquoted trading companies. It aims to preserve the value of your capital, targeting modest growth at a rate slightly above inflation. If your personal circumstances or investment strategy change, you can ask to withdraw part or all of your investment. We will usually aim to fulfil your request by selling your shares. However, there is no ready market for unquoted securities, so the return of capital to you may depend on us being able to sell your shares to other investors in the Oxford Capital Estate Planning Service.
You can read more about the Oxford Capital Estate Planning Service here.
EIS investments, including those available through the Oxford Capital Infrastructure EIS and Oxford Capital Growth EIS, have the potential to qualify for BPR as well as EIS advantages including income tax relief and tax-free gains.
However, it is important to note that EIS investments are illiquid – if the investor dies, EIS shares will be passed to the beneficiaries who will not be able to access the capital until the company is sold (for example, through an acquisition by a larger competitor) or lists on a stock exchange.
It is also possible that EIS investments will be sold while the investor is still alive, prompting a return of capital. If the proceeds cannot be reinvested into other BPR-qualifying assets before the investor dies, then the capital will not be protected from BPR. By contrast, investments focused purely on BPR can often be simply left in place until the investor’s death.
Investments that qualify for Business Property Relief (BPR), can be exempt from Inheritance Tax after just two years, if you still own them when you die.
Other Inheritance Tax strategies, such as lifetime gifting, take seven years to be effective.
This means that, as we get older, using BPR can significantly increase the chances of successful Inheritance Tax mitigation.
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James looks after a number of Oxford Capital’s key relationships with national accounts as well as
Tom has responsibility for a number of Oxford Capital’s key national account relationships as well
Richard is responsible for managing Oxford Capital’s direct clients.
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Our investments place your capital at risk. We do not provide investment, tax or legal advice and we recommend you seek professional advice if you are considering investing with us. You may lose part or all of the amount you invest with us. We invest in unquoted shares in small companies. The value of these shares can be volatile, and the shares are often difficult to sell. The tax reliefs associated with our investments depend on the individual circumstances of each investor and may be subject to change. Past performance is not a reliable indicator of future results. Our forecasts and performance targets cannot accurately predict how investments will perform.Accept Back to homepage