BPR Explained

havenifa

havenifa


Posted on: 29th March 2022

Investing can be exciting as much as risky, especially if you do not have a professional financial adviser to hand to explain all the avenues, risks, and temperament of the market. People who are left to guess utilise the internet to get answers – and they are not the most reliable source of information in any case.

A case in point right now is the influx of varied information in regards to BPR qualifying investments (Business Property Relief). Most of the time, you will see posts from people who have a misunderstanding of some kind of negative experience – but have these people consulted with a professional adviser beforehand to fully understand what BPR is and how they benefit?

What is BPR?

BPR-qualifying investments encourage individuals into investing in unlisted trading companies or ones that are listed on the Alternative Investment Market (AIM). As any adviser will tell you from the beginning, these investments are of higher risk than main-market equities.

The benefit comes in a form of compensation for that risk, where the estate of an investor can claim 100% relief from inheritance tax (IHT), providing the shares in that investment have been held for a minimum of 2 years predating the investor’s death.

With this being a simple investment, there is no requirement to give away your wealth whilst alive like other forms of estate planning. All qualifying shares are held by the investor up until they die, allowing them complete control of their wealth, with the ability to sell some or all or some of their investment to access their capital if required, subject to liquidity.

This makes a qualifying investment more effective over traditional estate planning routes, as lifetime gifts can take 7 years to reduce an estate’s value. The option to invest and support trading businesses whilst providing such relief from IHT has made BPR qualifying investments for those planning their estate.

Understanding BPR

With BPR-qualifying investments being a hot talking point on the market, despite being available for a while, to many people, it can be confusing with so many different takes on it from so many sources. This highlights the need to discuss this avenue with a qualified financial adviser to get to grips with its potential.

Gaining the knowledge from one professional source eliminates the confusion you get from the many people online who may not be fully clued into the benefits or have different situations than you do.

A financial adviser will already have a handle on your circumstances and can fully explore the avenues of BPR qualifying investments to make your financial landscape and estate benefit from it. Advisers are the ones who can help determine if BPR investments is a valuable avenue or not fit for you, helping you to navigate and avoid risks through knowledge and experience.

Contact the team at Haven IFA today to discuss Business Property Relief Northwest and inheritance tax relief as part of your estate planning.