Time to rethink IHT strategy. Currently I have £350k in a HL SIPP that I have no need to drawdown from. With SIPPs now coming into the IHT net as a result of the Budget, I now will consider drawing down £22k (the amount that would be subject to 20% tax) and invest the monies in BPR shares within a Stocks/Shares ISA. Obviously these shares will be subject to to 50% relief from the 40% IHT rate which is better than the SIPP being subject to 40% then a further minimum of 20% in the hands of the recipients . Specific IHT BPR plans on the market are very expensive on charges etc (no offence to Megan Boxall’s family) and there is no reason why you cannot construct your own BPR shares in an ISA. It would be good Paul and Graham , if you could state if shares especially on AIM in your report qualify for BPR ! Even better if a screen could be added. This would certainly give added value to the Stockopedia subscription.
It would be good Paul and Graham , if you could state if shares especially on AIM in your report qualify for BPR ! Even better if a screen could be added. This would certainly give added value to the Stockopedia subscription.
It'd be lovely but sadly it's impossible, as a quick Google search reveals:
There is no definitive list of AIM companies that qualify for Business Property Relief (BPR) for Inheritance Tax (IHT) purposes. However, you can use AIMsearch to conduct a preliminary search for qualifying AIM companies. You can register online to create an AIMsearch account and purchase credits to perform searches.
You basically find out when you die and HMRC decides. The BPR status of shares changes occasionally if they change their business model or market listings.
Very much a DYOR area, although the basic rules are that the company must:
- Be a trading company that conducts most of its business in the UK
- Not be listed on another recognized stock exchange
- Not be involved in trading land or securities
- Not receive a significant amount of income from letting land or property.
Alternatively you can pay for a search on Investor's Champion:
https://aimsearch.investorscha...
Even those are qualified though:
Although not definitive, the AIMsearch tool narrows down companies,
an investment in which may qualify. Its use is subject to our Terms of
Use and the Disclaimer below. In particular it is not intended as a
substitute for detailed independent advice on specific investment
situations.
Of course, given that the government has shown that BPR relief on AIM shares is no longer a sacred cow it would be unwise to build a long-term IHT mitigation strategy around this. Although you'd imagine it won't get touched again during this parliament a future tax raising government (which is all of them when they first get in) may regard it as an easy target, given it's not of any concern to most voters.
I'd also note that the removal of IHT protection on pensions will likely send people searching for other easy ways of mitigating it - and I guarantee that the IHT funds will soon start marketing AIM BPR like crazy to advisers. If the net effect of that is that the amount of tax being sheltered from IHT suddenly rockets then I think we can guarantee a future Chancellor will take a very close interest.
Safer to spend it or give it away while you can.timarr
