Accelerate your inheritance tax planning

Posted by: Nicola Macdonald, on September 6, 2016.

In the tax year to April 2016, the government’s Inheritance Tax (IHT) take was £4.66bn (Office for National Statistics). That’s up more than 20% on the year before and by 2021, IHT is forecast to be bringing in £5.7bn.

Arguably, one of the best ways to avoid IHT is to die with too little in the way of assets to be obliged to pay it. This may not be too hard for a couple.

  • You get a total of £650,000 in IHT allowance between you, plus
  • From 2020-21 another £350,000 exemption for your family home provided it is left to your family
  • So a total of £1m

But if you’ve exhausted many of the obvious planning strategies e.g. gifting to individual or Trusts, insurance, retaining assets within a Personal pension etc and you still have an IHT liability, then:

What other option do you have?

Business Property Relief (BPR)

Business Property Relief  (BPR), introduced in 1976, is a tax relief provided by the UK Government as an incentive to increase investment in certain types of trading businesses.

  • Qualifying BPR shares benefit from 100% IHT relief provided that shares are held for a minimum of two years and are held at death.

This offers significant benefits when compared to those conventional methods of estate planning, such as Trusts and gifts, which can take up to seven years to become fully effective and often require giving up control of assets.

Whilst two years is generally preferable to seven, this can still leave an uncomfortable window whereby individual’s estates are potentially subject to a 40% IHT liability.

One provider of such products has developed a unique solution to bridge this two-year period, combining a group life insurance policy with BPR qualifying investments, offering qualifying investors the peace of mind that comes from knowing their liability will be covered from the moment they purchase their BPR qualifying shares.

It should be noted that such investments invest into unquoted UK companies and any BPR investment should be considered carrying a high degree of risk.

However, with the correct planning and in the right circumstances BPR investments can be a very effective tool in helping to mitigate IHT.

Swindells Financial Planning has helped numerous clients put in place plans to reduce potential IHT liabilities using a number of non-contentious planning strategies, such as BPR investment.

We are always here to answer any questions you have. So please give us a call on 01825 76 33 66 or fill in the contact form.


Enter your email

Get free investment, pensions and wealth management news and advice.

* indicates required

*We will never share your details with any third party.


Client Stories

Book a consultation

Your Name (required)

Email (required)

Phone Number


Employment Status


What you would like to talk about?


Enter exactly what you see above

Enter your email to receive free relevant news and updates.

* indicates required

*We will never share your details with any third party.

Latest… View all

Putting the current stock market decline in context

There’s no doubt hyperbolic headlines depicting the recent falls on the world’s financial markets are potentially anxiety-inducing. With the FTSE 100 Index falling to its lowest level since April 2017, the effect of the headlines is to promote a sense of uneasiness; we’re here to remind you that this shouldn’t be the case. Instead of […]

Read more →

Inheritance Tax is an avoidable tax

It is often said that Inheritance Tax is an avoidable tax, but many of us somehow fail to avoid it. Why is this? In our experience, clients’ failure to plan effectively is a result of the following perceived problems: Speed – How often will the thought of having to survive 7 years from the date […]

Read more →

What went wrong with the forecasts?

Reading the tea leaves Investors at year-end are inclined to reflect on the 12 months gone and muse on what the coming year might bring. Aware of this appetite for speculation, themedia tends to feed it with forecasts. These articles can be fun to read, but are even more so a year later. In January […]

Read more →

What should investors make of bitcoin mania?

Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios. Cryptocurrencies such as bitcoin emerged only in the past decade. Unlike traditional money, no paper notes or metal coins are involved. No central bank issues the currency, and […]

Read more →