27 April 22

Should you be thinking about estate planning?

Planning for what happens after you’re no longer around might not seem like the most cheerful topic but, with the ever-growing concern around large inheritance tax bills, thinking ahead has become essential.

The complexities of inheritance tax (IHT) can be confusing to understand and awkward to discuss. As a consequence, every year a growing number of families end up paying large IHT bills that could have been legitimately mitigated.

However, what if there was a way to mitigate IHT and benefit from an attractive trade, uncorrelated to equity markets?

IHT bills have been steadily rising since 2009, as a result of the government freezing the £325,000 threshold, known as the nil-rate band, above which the 40% tax is charged on estates. Between April and December 2021, HM Customs and Revenue collected £4.6bn in inheritance tax, an increase of £600m on the year before and during the calendar year 2021 collected £5.9bn.

Business Relief

Business Relief (BR) has been part of inheritance tax legislation since 1976. Originally put in place to allow family businesses to pass from one generation to the next, the scope has been widened over the years to allow a broader range of investors to benefit from the relief. BR typically enables qualifying assets to obtain IHT relief faster than trusts or gifts and, most importantly, can be done without a loss of control for the investor over their investment, a critical point for investors with Power of Attorney’s in place to consider.

Assets that qualify for Business Relief include unquoted trading businesses and certain qualifying companies quoted on AIM. If you hold shares in qualifying businesses for a minimum of two years at the date of death, the shares may qualify for BR, and therefore not be liable for any IHT. However, with a broad range of trades and sectors available to investors it is critical that advisers think carefully about the right type of BR investment for their clients, including the sectors, their respective risk/return profiles, the experience of the investment manager and whether they meet the objectives for your client.

Leasing and Lending Business Relief

Unquoted trading companies can be an attractive option to mitigate IHT for those targeting returns that are uncorrelated to equity markets.

Triple Point’s approach is to target business relief through specialist leasing and lending companies that arrange funding for both the public sector and private corporations, ranging from local authorities, the NHS, housing associations and large corporates – to tens of thousands of UK SMEs. Leasing and lending has previously been the preserve of banks and financial institutions, but Triple Point’s estate planning solutions uniquely enables investors to access this strategy benefitting from highly diversified trading that is uncorrelated to equity markets.

Managing a diverse debt financing book with c.£750m of AUM, Triple Point provided £285m of financing to UK-based organisations to March 2021, including £125m of CBILS loans to those SMEs in communities across the UK most impacted by the pandemic. Over the last two years, Triple Point increased the provision for NHS equipment (including rapid response ambulances, ventilators, and isolation pods) and played a vital role in supporting public sector organisations and corporates that are fundamental to the UK economy.

Triple Point Estate Planning Service (‘TPEPS’)

Triple Point gives investors access to this unique deal flow through the Estate Planning Service ("TPEPS"). The Service was launched in 2013, offering investors two alternative core strategies, each with compelling track records of delivering solid on-target returns, year after year (though remember: past performance should not be used as a guide to future performance).

Making a real impact

Triple Point’s award-winning service could provide individual investors and trusts with 100% relief from inheritance tax after two years. Since it launched, our Estate Planning Service has consistently provided solid and stable returns to investors from our diverse portfolio of lease and loan contracts, additionally providing investment exposure that is decoupled and uncorrelated with traditional equity markets.

Triple Point’s dependable performance with impactful and positive UK investments has led to numerous industry awards, including runner up ‘ESG Champion of the Year’ at the Growth Investor Awards 2021 for its role at the forefront of the UK’s investment-led recovery.

TPEPS enables private investors access two distinct and attractive investment strategies that are both focused on leasing and lending to a range of counterparties across the UK:

  1. Generations, which currently invests into TP Leasing Ltd, is focused on leasing, lending and infrastructure finance to high grade counterparties such as corporates and the public sector. It focuses on providing a. For example, MRI scanners or ambulances to NHS Trusts, or assets such as refuse collection vehicles to local authorities. The target return to Triple Point’s clients is 1.5% to 2.5% p.a. (after annual fees).
  2. Navigator, which currently invests into Navigator Trading Ltd (‘NTL’) is focused on lending and leasing to small and medium sized enterprises (‘SMEs’’). It focuses on providing large numbers of smaller leases and loans, to a diverse spread of businesses, and manages risk by carefully analysing the underlying deals and taking account of anticipated losses in advance. Just like TP Leasing Ltd, NTL has demonstrated consistent returns year after year, delivering annualised returns to Triple Point clients comfortably within its 4.0% to 6.0% target p.a. (after annual fees). Once again, please remember that capital is at risk and past performance should not be used as a guide to future performance.

If you have any further questions about our Estate Planning Service, or any of our other investment solutions, which include our EIS Investment and Venture Fund VCT, please get in touch on 020 7201 8990.

Click here to find out more about the Triple Point Estate Planning Service

Risk Warning: The Triple Point Estate Planning Service places capital at risk. As with any investment, there is no guarantee that the target return will be achieved and investors may get back less than the amount they invested. Past performance and forecasts are not a reliable indicator of future performance. Tax treatment depends on the individual circumstances of each client and is subject to change. Tax relief depends on the companies we invest in maintaining BPR qualifying status.

Triple Point is the trading name for the Triple Point Group which includes the following companies and associated entities: Triple Point Investment Management LLP is authorised and regulated by the Financial Conduct Authority no. 456597. This financial promotion has been issued by Triple Point Administration LLP  which is authorised and regulated by the Financial Conduct Authority no. 618187.