As Inheritance Tax (IHT) receipts continue to rise, hitting £5.4 billion for the last tax year (2020/21), advisers are increasingly looking for ways to mitigate this tax for their clients.[i]
Business Relief (BR) is rising in popularity as it offers investors a faster route to IHT relief, requiring only two years to gain IHT exemption instead of seven years with gifting or trusts.
The importance of BR as an IHT planning tool is highlighted by new research which shows that 17% of advisers are now recommending BR as the preferred IHT solution for clients at least once a month. A further 32% are recommending it every three months, meaning that almost half of advisers are recommending BR at least once a quarter.[ii]
In addition, 29% of retail investors aged between 55 and 64 said that the Covid-19 pandemic has made them think more about their mortality and seek estate planning advice to make sure they have plans in place when they die.[iii]
TIME Investments’ market-leading IHT solution, TIME:Advance, has experienced consistent inflows and has, in fact, seen a 33% increase in inflows year-to-date, when compared to the same period in the 2019-20 tax year, prior to the pandemic. This has resulted in TIME:Advance hitting an AUM milestone of £750 million in October, several months earlier than expected. The service was launched in 2013 and offers a simple and effective IHT solution, using BR to potentially offer a 100% exemption from IHT after just two years. It targets net returns between 3% and 4.5% per annum.
TIME has a long track record in tax-efficient investments and has raised and deployed over £1 billion into BR qualifying trades across its range of IHT solutions. Over 1,600 investors have exited and successfully benefited from BR, reducing their IHT liabilities and increasing the value of the legacy for their beneficiaries.
Nigel Ashfield, Managing Director of TIME Investments, said:
“TIME:Advance has been recognised as a market-leading IHT planning solution as demonstrated by the AUM milestone and the frequency with which advisers are using BR for their clients’ estate planning. The pandemic has also focused advisers and their clients on ensuring appropriate plans are in place.”
[i] Table 12.1 Inheritance tax: analysis of receipts’, HMRC, July 2021
[ii] TIME Investments Business Relief Survey of 202 financial advisers and wealth managers, September 2021.
[iii] Consumer research conducted by Consumer Intelligence among 1019 individuals, 19-21 February 2021.
The levels and bases of, and reliefs from, taxation may change in the future. Any favourable tax treatment, such as Business Relief, is subject to government legislation and as such may change. Past performance is not necessarily a guide to future performance and there is no guarantee that the target return objectives of TIME:Advance will be achieved; you should recognise that capital is at risk and investors may not get back what they invest.Posted: 04/11/2021 Categories: Inheritance Tax, News, Press, TIME:Advance