Triple Point and MT Finance agree £30m corporate revolving credit facility
16 January 23
16 January 23
After your clients spend years of hard work and dedication creating wealth for themselves and their families, we know that it’s important to them to preserve this wealth for future generations.
However, to do this they must first navigate the waters of inheritance tax (IHT). IHT is usually paid at 40% of the amount by which an estate exceeds the Nil Rate Band (NRB). The NRB is currently fixed at £325,000 per person.
An estate may also be entitled to an additional allowance, known as the Residence Nil Rate Band. This is an allowance of £175,000 which applies to the family home in certain circumstances. However, even with this additional allowance many estates are still expected to have considerable IHT bills in the future.
According to the Office of Budget Responsibility, in 2020-21 IHT raised £5.3 billion. It is forecast that by 2022-23 this will rise to £6.7 billion, mainly due to rises in asset prices. Residential property makes up the largest share of most estates, and the rise in average house prices over the past few years are making more and more families liable for IHT.
How business relief works
Business Relief was introduced by the Government in 1976 to allow certain trading businesses to be passed down to the next generation free from inheritance tax, providing the shares had been held for a minimum of two years and on death. As the years have gone by, different governments have expanded the relief, including allowing qualifying companies on the Alternative Investment Market in 1996.
While investors must hold the investment at the time of death to benefit from the IHT exemption, they also retain access to their funds up until that point. This means that if their circumstances change, they still have complete control over their assets. So by making Business Relief a part of their estate planning, you can help your clients with their own peace of mind as well as letting them leave a legacy for their loved ones.
Risk warning: Investor's capital is at risk. Tax treatment depends on the individual circumstances of each client and is subject to change. This financial promotion has been issued by Triple Point Administration LLP which is authorised and regulated by the Financial Conduct Authority no. 618187.