Marjorie and Sam have been clients of their adviser, Bill, for over five years. They are a couple in their seventies and have an estate of approximately £40 million. They have recently sold a commercial property and have £3 million to invest and are seeking to reduce their three childrens’ exposure to IHT whilst investing in assets that are socially responsible.
They were seeking a bespoke service where they invested specifically in their own projects and have
the flexibility to amend the investment over time. They already have an AIM portfolio with Stellar which attracts relief from IHT because they have owned their portfolio for more than two years.
With Bill’s help, Marjorie and Sam are keen to invest in Business Relief (BR) qualifying assets seeking to achieve 100% relief from IHT after two years.
After considering a range of BR options, Bill selects the Stellar Bespoke IHT Service because it allows a bespoke solution to structuring the investment and selecting qualifying activities that suit their needs. The couple invest in three different companies, one for each of their children. This means that each of their children will inherit a company which may be used for their own estate planning.
They are aware of the need in the UK for further housing and as a result they choose to focus on residential property development for each of the three companies established through the Stellar Bespoke IHT Service.
They are on track to secure 100% relief from IHT for their children after two years, whilst investing in tangible assets seeking to preserve and grow their legacy.
The following table illustrates the benefits of investing £1 million for each of their children sought from the Stellar Bespoke IHT solution. We have assumed the underlying investments provide growth of 4% per annum after fees.
Result after 2 years
Risk warning: Your capital is at risk. Investments can fall as well as rise and investors may not get back the full amount invested. Investments in unquoted companies are less liquid and are higher risk than larger companies. The rates of tax, tax benefits and tax allowances described are based on current legislation and HMRC practice. They are not guaranteed, are subject to change and depend on personal circumstances. Please refer to the latest product literature before investing: your attention is drawn to the risks and fees contained therein.
This document dated 7th December 2022 is intended for retail investors and their advisers and has been approved and issued as a financial promotion under the Financial Services and Markets Act 2000 by Stellar Asset Management Limited (‘Stellar’). This document is for information only and does not form part of a direct offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. Stellar does not offer investment or tax advice or make recommendations regarding investments. Stellar is authorised and regulated by the Financial Conduct Authority (Firm reference No. 474710). Registered in England No. 06381679. Registered office: 20 Chapel Street, Liverpool L3 9AG.