Inheritance Tax (IHT) Investment Products

Clubfinance can arrange your Inheritance Tax ('IHT') investment on an execution-only basis. Arranging your IHT investment through Clubfinance, you will receive:

CLICK HERE FOR A LIST OF OPEN IHTs & OUR DISCOUNTS

* We rebate 75% of trail commission on IHT products where the trail commission rate is 0.5% or less per annum. Clubfinance retains any trail commission above 0.5% per annum in full. Please note that trail commission rebates are subject to Income Tax, and Clubfinance must deduct basic rate Income Tax from the payment to you.

Inheritance Tax (IHT) products utilise Business Property Relief ("BPR"; also known as "Business Relief for Inheritance Tax") to reduce the value of the investment when working out how much Inheritance Tax has to be paid on an individual's estate.

Investments that utilise BPR are higher risk than main stream investments and some other potential options for mitigating Inheritance Tax.

BPR is only available if the business or asset has been held and has been qualifying for at least two years before death. The relevant dates of investment in the underlying assets may be later than the date you apply for an IHT product because the money may not be invested immediately (see tax notes below).

Clubfinance offers an execution-only service; Clubfinance does not give advice or recommendations. If you have any doubts as to the suitability of a particular IHT product, the agreement underlying it, or IHT products in general, or you require advice of any kind, you should contact another appropriate firm that does give advice.

Risk Warnings

Inheritance Tax (IHT) products are high-risk investments and may only be suitable as medium or long-term investments. Clubfinance Ltd offers an execution-only service; Clubfinance does not give advice or recommendations. Inheritance Tax Products are complex products and are not suitable for all investors. If you have any doubts as to the suitability of a particular Inheritance Tax Product, or Inheritance Tax Products in general, or you require advice of any kind, you should seek a personal recommendation from a professional adviser. Do not invest in an Inheritance Tax Product unless you have carefully thought about whether you can afford it and whether it is right for you.

Please refer also to the risk warnings and other information contained within the product documentation for the Inheritance Tax Product that you have chosen, together with Clubfinance’s Terms of Business.

Inheritance Tax Products commonly invest in the unquoted shares of one or more companies, i.e. shares in a company that are not quoted on recognised stock exchange (‘unquoted shares’). Unquoted shares for Business Property Relief purposes do however include shares traded on the Alternative Investment Market (AIM), although if they are also listed on another recognised stock exchange (e.g. overseas) they will be deemed to be quoted.

Unquoted shares potentially qualify as Business Property and therefore potentially benefit from Business Relief (also commonly referred to as Business Property Relief or ‘BPR’) for IHT purposes. Although AIM shares are listed, meaning that more information may be available compared to unlisted shares: AIM shares can still be difficult to buy and sell; share prices can still be very volatile and subject to large differences between the buying and selling price; and the risks below will still be relevant.

General

Unquoted shares

Spread of risk

Taxation

Charges & performance fees

Security of capital

Selling your investment

All ISA transfers

ISA transfers excluding re-registration onto a fund supermarket

Cash ISA transfers to a Stocks & Shares ISA

General

NON-READILY REALISABLE SECURITIES ('NRRSs')

NRRS RISKS

It is not possible to cover every risk here, but here are some important risk areas to consider.

Start-up business failures & the risk of capital loss

Most start-up businesses fail, so investors in them need to understand that it is likely they will lose 100% of any money invested, and they have little or no protection if the business or project fails. Therefore, do not invest any money you are not prepared to lose. The risk of capital loss, even if the business does not fail, is exacerbated if the price paid for a security is based on an over-valuation of the business, or if the security is a long-term debt security that will not return capital for periods such as 20-25 years. Investors should not invest in a start-up business unless they know how to value it, and/or have carried out their own due diligence on the investment professional who will make the investment on their behalf (e.g. an authorised and regulated investment manager).

No dividends and equity dilution

Dividends are usually rare or non-existent. Even if the company remains a going concern, investors in unlisted shares in a start-up or young company face the risk of never receiving a return on their investment if those controlling the company decide not to issue dividends. In addition, if the business is sold or becomes listed, investors may find their share in these profits (if any) is reduced if the value of shares is diluted by subsequent issues of new shares (which may include the grant of options to employees or directors for example). Investors need to understand that they will have almost no control over these decisions. In addition, new or existing shares may have more favourable rights (e.g. to dividends and/or sale proceeds) compared to those you invest in.

No secondary market - illiquidity

After purchasing unlisted equity or debt in a company, even if it remains a going-concern, investors will usually find there is no, or only a limited, secondary market for their investments. Investors need to understand that they will probably have to wait until an event occurs, such as the sale of the company, a management buy-out or a flotation, before getting a return on an equity investment (if any). Also, in the event of their death, ownership of these investments will probably need to be transferred to the investor’s beneficiaries, which may incur costs (e.g. administration and/or valuation charges).

Returns

Achieving a positive return when investing in unlisted securities is difficult and statistically unlikely. It can also take considerable time for a start-up business to generate a return, so investors must be prepared to wait until well into the future for a potential return.

Due diligence

It is difficult for an investor to assess the value of an investment and the likelihood of investment returns without access to reliable due diligence information. Investors need to be properly informed to ensure they can understand and assess what is involved. The due diligence could be carried out by: the investor; a third party (such as an authorised and regulated investment manager); or both.

So that they can make decisions on an informed basis, investors need to be satisfied that they have enough reliable information to enable them to understand:

Investor behaviour

Detrimental biases that can be relevant to non-readily realisable securities include (but are not limited to) the following.

Other risks, including investment-specific risks

Tax Notes

IHT products are designed specifically to try to qualify for Business Property Relief ('BPR') to mitigate Inheritance Tax ('IHT') liability on death of the investor. In order to benefit BPR a qualifying investment must be held continuously for a minimum of two years, and have been qualifying throughout that time.

Under current tax rules, it is possible to transfer an existing BPR-qualifying investment to another BPR qualifying investment without needing to wait a further two years for the new investment to be qualifying, however, this must be done with great care. Please contact the fund manager directly to discuss how this should be done in your particular circumstances before investing. If you are under any doubt about how to go about this, you should not use an execution-only broker such as Clubfinance and instead use a suitably qualified and regulated adviser.

The tax rules over BPR are complex; HMRC has some further information:

Due to the complexity of the tax rules, if you are in any doubt, you should consult a tax adviser.

How to invest - the process

Documents you need to read and retain can be accessed by clicking the icons against each IHT offer on our Open IHT Offer List. If you have any difficulties please use the contact form below.

EIS-VCT-IHT
Clubfinance Ltd.
PO Box 1036
Hemel Hempstead
HP1 2WU

If you are posting us an item by Recorded or Special Delivery, please use the following address:

EIS-VCT-IHT
Clubfinance Ltd
Amberside House
Wood Lane
Hemel Hempstead
Hertfordshire
HP2 4TP

Open IHTs

The following shows a list of IHT products available for investment through Clubfinance. If there is an IHT product open for investment that is not listed, please contact us using the form below. Please click on the IHT product below to access further information.

Amati AIM IHT Portfolio Service
Blackfinch IHT Portfolios
Deepbridge Inheritance Tax Service
Downing AIM Estate Planning Service
Downing AIM ISA
Downing Estate Planning Service
Guinness Inheritance Planning Service
Ingenious Estate Planning Care
Ingenious Estate Planning Classic
Ingenious Estate Planning Private
Mariana Estate Planning Solution
Oxford Capital Estate Planning Service
Octopus AIM Inheritance Tax Service
Octopus AIM Inheritance Tax ISA
Octopus Inheritance Tax Service
ProVen Legacy plc
Puma AIM Inheritance Tax Service
Stellar AIM IHT ISA
Stellar AIM IHT Portfolios
Stellar Estate Planning Service
Stellar Succession
Unicorn AIM Inheritance Tax Portfolio Service

Contact Form

For product documentation and further information, including a Commission Statement, please see our list of currently available IHT products. If product you are interested in is not listed, or you require any further information or clarification, please use the form below to contact us. Please remember we offer an execution-only service. Please contact a financial adviser if you need advice.

Contact Form
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Some of the content of this page represents extracts from the HMRC website, www.hmrc.gov.uk, which is Crown copyright material.

Important Information

Clubfinance Ltd is authorised and regulated by the Financial Conduct Authority (firm reference no. 400139). Clubfinance offers an execution-only discount broker service; Clubfinance does not give advice or recommendations. If you have any doubt about the suitability of a particular product or service, or you require advice, you should seek a personal recommendation from an appropriate firm that does give advice. Clubfinance does not produce the products it arranges, or manage the underlying investments. Payments must not be made to Clubfinance, but to the relevant product provider. Contact details for Clubfinance can be found under 'contact'. Users of this website should be aware of the following:

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