The Stellar Bespoke Inheritance Tax Service is designed for sophisticated investors who prefer a tailored discretionary investment approach to improve tax-efficiency. The service offers both flexibility and complete control of your estate and succession plan. Both the investment strategy and selection can be tailored to suit your requirements.
The Stellar Bespoke IHT Service provides you with access to a range of qualifying business activities, which seek to qualify for tax benefits including Business Relief, which offers 100% relief from inheritance tax. The service employs a family trading company structure providing family members the flexibility to allocate assets and capital as required, including multiple companies and multiple share classes.
We aim to generate a target return of between 3% to 5% per annum for your Stellar Bespoke Company from our range of qualifying business activities. You are able to select which of these activities you wish your Stellar Bespoke Company to participate in.
This choice will affect your target return. Please note that this is a target only and is not guaranteed.
The Stellar Bespoke IHT Service allows you to pass family wealth to your beneficiaries without ceding control during your lifetime. Once inherited, your beneficiaries may wish to consider how they can best manage their affairs tax efficiently, and this could well include their estate planning needs.
Families are deliberately establishing estate planning strategies that can be maintained by successive generations, without the need for complex trusts, to provide the next generation with a legacy free from IHT whilst maintaining full control of their capital.
Access to Capital
One of the distinguishing features of the Stellar Bespoke IHT Service is that, unlike some inheritance tax planning, you retain ownership and control of, and access to, your capital.
At some point in the future you may wish to access your capital, and likewise – whilst your beneficiaries may maintain your Stellar Bespoke Company for future generations – they may also wish to access some or all of the capital. It is therefore important that you understand how capital can be accessed, and the timeframes which may be applicable.
Your funds are invested in a Stellar Bespoke Company that is owned by you, and this permits greater control over what it does. Your Stellar Bespoke Company invests in Businesses, to enable it to undertake qualifying activities that enable you to benefit from Business Relief after two years.
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Reasons to Choose Stellar Bespoke IHT Service
Relief from IHT, and other tax planning opportunities.
This is key to our investment approach and intrinsic to our service.
You invest in your company, so you keep control.
Providing you with confidence and reassurance, today and in the future.
Offers uncapped returns from qualifying business activities.
Investments made in your family’s names, to match your family’s bespoke needs.
Opportunities to blend investment sectors to meet your objectives.
Create your preferred portfolio
Investment sector expertise that Stellar can provide includes:
- Arable Farming
An opportunity to benefit from both capital growth and Agricultural Property Relief.
- Bridging Finance
Providing a regular source of income with strong levels of asset security.
- Commercial Forestry
Offering stable and predictable returns – with all timber sales free from capital gains and income tax.
- Commercial Property Development
Acquiring opportunities to develop land for commercial use – underpinned by a freehold or long leasehold interest.
Owning and operating hotels across the UK, to deliver a regular source of annual income and capital growth.
- Renewable Energy
Supplying a stable and predictable income – underpinned by the subsidies provided by the Government.
- Residential Property Development
Sourcing opportunities to develop land for residential use – underpinned by a freehold or long leasehold interest.
How your Stellar Bespoke Company Works
Choose Your Strategy
There are three main strategies that you can choose from:
The Discretionary Strategy
You choose the investment sectors and we select the underlying investments. This strategy is designed for investors who want to leave a legacy without committing time to sourcing their own investments.
The Tailored Strategy
You choose the assets to invest in. Designed for investors who want complete control of their portfolio.
The Hybrid Strategy
A blend of both the discretionary and tailored strategies. Designed for investors who are happy for Stellar to choose some investments but also want to add their own choices.
You have the option to further adapt your strategy if your circumstances change in the future.
The Stellar Bespoke Inheritance Tax Service is carefully designed to provide real returns during your lifetime, as well as a tax-efficient legacy for your beneficiaries. This graphic compares the three year projected performance of a savings account and government gilts with the Stellar Bespoke Inheritance Tax Service.
- The Stellar Bespoke Inheritance Tax Service is higher risk than saving accounts and government gilts.
- After two years, a holding in the Stellar Bespoke Inheritance Tax Service should attract 100% relief from IHT, provided the initial investment is held at the point of death.
- Please note the target is between 3% and 5% depending on the investment sectors selected.
- All returns are calculated using annual compounding and rounded to the nearest whole pound where applicable.
- Your capital is at risk
The value of your Stellar Bespoke Company, and any income derived from it, may go down as well as up and you may not get back the full amount you invested.
- Qualifying business activities are not guaranteed
There is no guarantee that sufficient investments in qualifying business activities will be made within the expected timetable, or at all. In addition, qualifying business activities may subsequently cease to qualify for Business Relief. In such cases, Business Relief could be lost or delayed.
- Target returns are not guaranteed and you cannot rely on past performance
Please remember that past performance is not a reliable indicator to future performance, and there is no guarantee the target return objectives will be met.
- Tax reliefs are not guaranteed
The rates of tax, tax benefits and tax allowances described in this brochure are based on current legislation and HMRC practice. They are not guaranteed, are subject to change, and depend on personal circumstances. In addition, any changes to what constitutes a qualifying business activity may have a material adverse effect on the value of the Businesses or the ability of Stellar to achieve the objectives of the Stellar Bespoke Inheritance Tax Service.
- Investments are long-term and high risk
Investments must be held for at least two years, and held at death, to benefit from Business Relief. Although you can request a withdrawal from your Stellar Bespoke Company, there may be a delay because the interests in the Businesses are not liquid. Exits are reviewed quarterly and there is no guarantee that an exit will be possible. Such interests are also considered to be higher risk than securities listed on the London Stock Exchange.
- Conflicts of interest
Instances may arise where the interests of one group of investors will present a conflict with the interests of another group, or an interest of Stellar. In the event of a conflict, Stellar’s investment committee will work to ensure that this is resolved fairly and in accordance with its conflict policy.
Fees and Charges
|Initial Subscription Fee||1.5%|
|Consultancy Fee||Up to 2% of the amount invested|
|Management Fee||1% plus VAT|
|Administration Fee||0.5% plus VAT|
|Performance Fee||20% of excess above target return|
|Exit Fee (where applicable)||2% plus VAT|
To gain a full insight into our Stellar Bespoke IHT Service, explore the following resources:
- Document Downloads – featuring brochures, application forms and more
- Independent IHT Liability Insurance Policy
To arrange a Bespoke Consultation, please speak to your Adviser or call us on 020 3195 3500. Alternatively, please complete the form and we will contact you to set up a Bespoke Consultation.
Investing in Inheritance Tax Services carries risks and is not suitable for everyone, read more.
for more information
Independent Inheritance Tax Liability Insurance – Two Year Cover
For advisers recommending Business Relief, AIG offers a term assurance policy – specifically designed to cover any liability for inheritance tax in the first two years of planning.Find out more
Frequently Asked Questions on Stellar Bespoke IHT Service
Can BR be used with a Power of Attorney?
Yes, Business Relief (BR) investments allow the client and Power of Attorney to retain control of their capital and investments.
This is a distinct advantage over traditional IHT planning, such as gifts and trusts, which generally requires the agreement of the Court of Protection.
It may be that the Court does not agree that making lifetime gifts or placing assets into a trust is an appropriate strategy for the client, as this will involve the client losing control of their capital.
Can clients access their capital?
While traditional solutions such as gifts and trusts may work for some, a disadvantage is that clients have to give up control or access to their capital for it to qualify for IHT relief.
One of the more effective IHT solutions is Business Relief (BR) – a piece of Government legislation, offering IHT relief. BR provides clients with flexibility and capital growth, without capital falling outside of their estate.
Investing in assets that qualify for BR – such as British forestry, hotels and residential developments, or stocks on the AiM Index – will fully relieve any IHT liability after just two years, providing they are held at the time of death. In contrast, gifts and trusts require seven years before they qualify for IHT relief.
Read the full story here about how Business Relief can give the client control and access to their capital.
What are the advantages of using BR over a trust?
Despite popular opinion, the tax advantages that a trust offers have been steadily reduced by successive Governments over the past few decades. In 2006, the Government announced reforms which meant that many assets that moved into trusts became subject to a 20% IHT levy. Not only that, in 2016, the government increased the income tax rate for dividends held in trusts and removed a 10% tax credit.
As a result, many advisers believe that families are going to lean towards a different approach to managing their inheritances via a trust.
As well as being able to obtain IHT relief up to five years faster than trusts, IHT planning using BR also offers investors greater security, does not take away control from their estate, and also provides plenty of flexibility to the client. By mitigating several layers of risk, BR can be seen as the safer option for less experienced investors.
To find out more about BR and how it could work for a number of clients, get in touch with one of our experienced team members by clicking here or calling 020 3907 6984.
Take a look at our wide range of services
Stellar AiM IHT Service
A discretionary managed portfolio that mitigates risk through a diversified selection of 40 AiM stocks. This service is available for advised clients, on many of the UK’s largest wrap platforms.
Stellar AiM ISA IHT Service
The Stellar AiM IHT Service is also available for investment via an ISA, which enables investors to benefit from both Business Relief qualification and all ISA tax benefits. This service is also available on various wrap platforms.
Stellar Business IHT Service
A discretionary managed service which provides numerous succession planning and tax efficiency options for business owners – either following the sale of a company, or to invest excess company capital to maintain tax efficiency.
Stellar Conservative Growth IHT Service
This discretionary service involves the creation of a privately owned limited company for each investor, to access a portfolio of asset-backed Investment Sectors – targeting 3% growth per annum.
Stellar Growth IHT Service
This discretionary managed service involves the creation of a privately owned limited company for each investor, to access a portfolio of asset-backed Investment Sectors – targeting 5% growth per annum.