financial decision making

Financial Advisers on Estate Planning



Posted on: 25th February 2022

Many clients have experienced lulls in planning out their full financial decision making, and one of the main areas is usually around estate planning.

Understandably, it is not something you may feel like something that needs working on right away, but it is something that needs to be addressed so that your loved ones do not lose out. It is not unusual to feel increasingly worried and uncertain about how your financial future will work out, especially after how the 2020s have already affected so many on a financial and security level of how much they need their wealth in later life.

Business Property Relief

BPR has been an area that financial advisers have been able to highlight to address these concerns. Inheritance tax is one of the biggest stumbling blocks on the road to generously passing on your wealth, and BPR qualifying investments can provide an IHT free solution when held for two years up to the time of death.

Because BPR is an investment, it allows a client to be able to keep access to their capital, which helps when clients are concerned about such areas as care fees or day-to-day living expenses. Clients like the comfort of security as much as possible and gifting from their estate without the unwanted tax spoiling any plans.

With BPR, whenever a client’s circumstances change and they need access to the money, it can be withdrawn on request subject to liquidity being available. Once a gift has been made, it will be out of reach of inheritance tax within two years.

Business Owners

If a client owns a business – or a stake in one – and the business activities meet the criteria for qualifying for BPR, shares would be able to be passed on free from inheritance tax upon death.

If a client was to sell some or all of their business, those proceeds would then be subject to inheritance tax. Most clients would avoid this by using some or all of the proceeds to buy shares in other BPR-qualifying businesses within 3 years, making those shares instantly zero-rated for inheritance tax.

Estate Planning Strategy

One area where independent financial advisers help their clients with BPR strategy is in the area of estate planning.

BPR qualifying investments are suitable where gifting or trust transfers are restricted under court of protection rules – it is an investment that remains in the donor’s name. Unlike other strategies that rely on life assurance, BPR requires no underwriting or medical forms to compile. Withdrawals can be requested at any point for a client’s needs, subject to the case.

For advice on how inheritance tax relief can be attained through business property relief north west, contact the team at Haven IFA today. We advice on all financial decision making.