“We are looking for a solution that is flexible to suit our needs and also reduces the burden of IHT for our four grown up children.”
IFA Hannah has a wealthy couple, Catherine and Alex, within her client base and is seeking a bespoke solution for them. The couple are extremely keen golfers and play regularly with their children.
Hannah wonders if owning their own golf course as part of their estate planning may benefit the family in many ways. Hannah knows that owning and operating a golf course qualifies for Business Relief which should provide 100% relief from IHT after two years. Hannah also knows that retaining ownership of their capital in case they need it in the future is important to Catherine and Alex.
With Hannah’s help, Catherine and Alex are keen to invest in Business Relief (BR) qualifying assets seeking to achieve 100% relief from IHT after two years. Hannah recommends the Stellar Bespoke Inheritance Tax service because she realises the importance of experienced managers for these types of assets. It also provides the flexibility required to allow an investor to seek to acquire a golf course near to where they live.
The couple invest in five different companies, one for each of their children and a last one to own the golf course for the whole family. This means that each of their children will inherit a company which may be used for their own estate planning and the family can retain the golf course to pass down as a family legacy. Stellar has discretion to invest the four companies across their range of qualifying business activities.
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 potential benefits of investing £10 million across the five companies 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.