Prime IHT Portfolio to provide tax planning tool

Originally published on 18 November 2015

Prestige Asset Distribution announced the launch of a new product for private clients and their financial advisers interested in mitigating the impact of inheritance tax (IHT) and preserving capital value. The Prime IHT Portfolio has been created by Prestige in conjunction with UK brokerage First Equity, to allow investors to take advantage of Business Property Relief (BPR).

The Prime IHT Portfolio (“Prime IHT”) targets a 4% return per year (after management charges), using unquoted companies as the underlying portfolio. It is most suited for UK-domiciled investors, regardless of their residency, who wish to take advantage of additional tax planning opportunities under the UK’s Business Property Relief (BPR).

The companies in the portfolio are active trading companies and not static assets, like real estate, hence they qualify under the UK government’s BPR scheme, which was first introduced in 1976. London based, First Equity Limited will be responsible for day to day portfolio service management, with affiliated companies of Prestige being responsible for the underlying lending origination, administration and monitoring of lending activity and the production of share prices on a monthly basis.

Investments made under BPR qualify for 100% relief from inheritance tax, provided that the shares are held for at least two years, and still held at the time of the client’s death. The relief only applies to shares which are not listed or traded on a Recognised Investment Exchange.

Helping Small Businesses in the UK

The underlying companies in the Prime IHT Portfolio constitute finance firms that are active in the direct lending market for small business, especially in the rural, agricultural and green energy sectors in the UK. Prestige has considerable expertise in these sectors, focusing on borrowers with tangible assets or income streams supported by government-backed schemes (e.g. green energy tariffs).

Craig Reeves, Founder of Prestige Asset Distribution, said: “With house prices in the UK continuing to rise, more and more home owners will be caught by inheritance tax. Additionally there are now approximately 2 million private landlords operating buy to let investment properties. Business Property Relief was designed to incentivise investors to play a part in the growth of the UK economy. Our portfolio of lending businesses is doing just that – funding much needed growth in UK agriculture, small business and alternative energy.”

Prestige and its associates take conflicts of interest very seriously, and ensure that the funds under management are subject to independent oversight and custody. Settlement and custody facilities will be provided by Jarvis Investment Management.

Prime IHT Portfolio is only being made available via financial advisers. While funds can be withdrawn at any time, it requires two years for any contribution to attract full relief from inheritance tax.

There is a minimum subscription of £10,000 to the Prime IHT Portfolio, with a 3% fee for investment dealing and a 1% dealing fee for withdrawals. No dealing fee is charged for sales or reinvestment within a Prime IHT Portfolio.