An asset-backed discretionary managed service, designed for advisers who are looking to create a legacy free from inheritance tax.

Provided that the portfolio is held for a minimum of two years, and at the time of death, clients and their beneficiaries will qualify for Business Relief and benefit from 100% tax relief – investing in a range of qualifying business activities that offer security and diversification, whilst seeking an income yield.

Key Benefits

The qualifying business activities are carefully selected for their ability to provide capital security and generate a reliable income stream – producing a low risk Inheritance Tax Service.

Investors can elect to have distributions paid to them, or reinvested in further shares – operating across a range of different Investment Sectors including Hotels, Bridging Finance and Development Finance.

Our Stellar Income Inheritance Tax Service aims towards a 4.5% income per annum, without reducing the capital – distributed bi-annually as a dividend.

Investing in our Inheritance Tax Services carries risks and is not suitable for everyone. Tax reliefs are subject to change and dependant upon personal circumstance. There is no guarantee that an investor will receive a full return. Please find further details of the risks here.

 

View our recent performance

Introduction to Income

Watch our video below for a brief explanation of the Stellar Income Inheritance Tax Service.

Click on the following links to access our useful resources.

Reasons to Choose Stellar Income IHT Service

Tax efficiency

Relief from IHT after two years

Diversified

Investment in multiple assets across three qualifying business activities which generate a natural yield

Control

Retain ownership of investments, to provide full control

Lasting legacy

Provides confidence and reassurance, today and in the future

Uncapped returns

Offers uncapped returns from qualifying business activities

Predictable income

A dividend to investors every six months

Our Investment Strategy

  • Offering security and diversification, the Stellar Income Inheritance Service commits each client’s capital to a range of investment sectors – as well as providing a regular income and relief from inheritance tax.
  • All of the qualifying business activities are carefully selected for both their low-risk characteristics and ability to generate a yield. This yield in turn should create a regular and reliable income stream that is distributed twice a year, with capital diversified across three investment sectors: Owning and Managing Hotels, Development Finance, and Bridging Finance.
  • We set up a discretionary portfolio in each investor’s name, which then invests in a range of income-producing qualifying business activities through IHT Companies. The investor is the beneficial owner of the shares in these IHT Companies, which are held through a nominee, so that they keep control of their capital.

Performance Comparison

The Stellar Income Inheritance Tax Service is carefully designed to provide real returns during an investor’s lifetime, as well as a tax-efficient legacy for their beneficiaries.

We strive to generate a target income of 4.5% per annum (net of fees), which will be paid twice a year in April and October. This graphic compares the three year performance of a savings account, government gilts and the Stellar Income Inheritance Tax Service, assuming it meets its target return and all distributions fall within the investor’s personal allowance.

Please note:

  • Target Return –  Please note that this is a target only and is not guaranteed. The target return is quoted before the effect of any adviser charges which, if paid, will reduce the target return.
  • The Stellar Income IHT Service is higher risk than saving accounts and government gilts.
  • After two years, a holding in the Stellar IHT Service should attract 100% relief from IHT, provided the initial investment is held at the point of death.
  • All returns are calculated using annual compounding and rounded to the nearest whole pound, where applicable.

 

Important Information

There are never any guarantees in the world of investment, so it’s essential that advisers make their clients aware of the risks. Our Inheritance Tax Services are not suitable for everyone, so here’s a summary of what an investor needs to know before getting involved – alternatively, click here for more information.

  • The value of a portfolio of IHT companies, or any income derived from them, can fluctuate.
    There is no guarantee that the full value of an investment will be returned, or that sufficient investments in qualifying business activities will be made within the expected timetable, or at all.
  • Qualifying business activities are not certain.
    Qualifying business activities may subsequently cease to qualify for Business Relief. In such cases, Business Relief could be lost or delayed.
  • Tax reliefs are not guaranteed
    The rate of tax, tax benefits and tax allowances are subject to change and are also dependant on personal circumstance. Plus, any changes to what constitutes a qualifying business activity may have a material adverse effect on the value of the business, or Stellar’s potential to achieve the objectives of the service.
  • Conflicts of interest
    The interests of one group of investors may not coincide with another, or an interest of Stellar. In the event of a conflict, Stellar’s investment committee will work to ensure it is resolved fairly and in lie with our conflict policy.
  • Investments are long-term and high risk.
    Interests in the IHT companies are not liquid so although you can request a withdrawal from your portfolio, there may be a delay. 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 LSE.
  • Past performance is no indicator of future success. 
Initial Subscription Fee1.5%
Dealing Fee1.5%
Management Fee1% plus VAT
Administration Fee0.5% plus VAT
Performance Fee20% of excess above target return

Next Steps

To gain a full insight into our Stellar Income IHT Service, explore the following resources:

For further information, complete the form to register for our Stellar Income IHT Service email campaign.

Investing in Inheritance Tax Services carries risks and is not suitable for everyone, read more.

Register now
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The Stellar Income IHT Toolkit

We provide a number of tools to guide advisers on how to tailor our Stellar Income Inheritance Tax Service for their clients. Please click below to view our specialised toolkits, featuring videos, case studies and more.

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 Income IHT Service

Inheritance tax (IHT) is charged on the value of everything owned by your client after their death, in excess of the Nil-Rate Band (NRB) – which is a tax-free allowance, currently set at £325,000 per individual and £650,000 for married couples and civil partners.

Legislation introduced in 2016 offered qualifying estates an additional tax-free allowance known as the Residential Nil-Rate Band (RNRB), which was phased in over four years and now provides a further £175,000 per individual on top of the standard NRB threshold. However, there are limitations on which estates are entitled to this additional threshold, and the relief is tapered for estates valued at over £2 million.

Any value in excess of the NRB, and the RNRB if relevant, is taxed at 40% – and the nature of this tax means that their beneficiaries are left to pay the bill. Added to this, rising house prices mean that more families than ever before are falling into the inheritance tax trap – which underlines the importance of careful inheritance tax planning.

Inheritance Tax (IHT) is, essentially, a tax levied on any transfer of assets to other people or trusts. It is typically paid in respect of the value of a client’s estate on death, but it can also apply in respect of certain transfers of assets during their life.

Read our guide as we explain what a client needs to pay and when, and some of the most important ways to gain relief from IHT.

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). This is 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.

Take a look at our wide range of Inheritance Tax 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 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.