Death:
IHT efficient investments
A part of inheritance tax planning is considering investment in inheritance tax efficient assets. Typically such investments may take advantage of inheritance tax reliefs available, for example relief for business assets (known as Business Property Relief). Assets used in your own trade will probably qualify along with shares you own in your trading company. From an investment perspective, shares in any other unquoted trading company should also qualify for relief from inheritance tax once you have owned them for two years. For this purpose companies traded on the Alternative Investment Market (AIM) are regarded as unquoted.
There are also marketed “schemes” offering shares in unquoted trading companies, often under the Enterprise Investment Scheme with income tax and capital gains tax reliefs in addition to the inheritance tax incentive. We can provide further details.
Such investments may have a greater risk profile than you are comfortable with. Other tax efficient structures are available giving an immediate reduction in your inheritance tax exposure, a further reduction after 7 years and a fixed return of funds to you during your lifetime. Once invested, you cannot personally have the investment returned to you, but it remains available to your beneficiaries following your death.
As with all investments, and all tax planning, there are a number of possibilities that can be considered to suit an individual’s requirements.
 |  | Related literature: |
- Integrated tax planning
- Can I save inheritance tax if I don't want to give my wealth away?
- Case study: Inheritance tax planning
- What is the Enterprise Investment Scheme?
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Where next?
Within Inheritance tax planning…
- Exemptions and reliefs
- Making best use of your nil rate band
- Business protection
- Life assurance and pensions
- Deed of variation
- The family home
General…
