All VCT, EIS, SEIS, and Business Relief qualifying investments are high risk and are not suitable for most clients. They are illiquid investments and Investors’ capital is at risk.

BPR and Income

Business Property Relief or Business Relief, depending on which bit of the HMRC’s website you look at, is now an established investment route for many clients looking for IHT planning whilst still having full access to those funds.  There has been considerable debate on how this access should be allowed and today we are going to look at how clients probably should structure their access.

A number of providers in the BPR market will offer regular access on monthly, quarterly, half yearly basis but the problem behind this type of structure comes back to the main reason the investment was considered, which was for IHT reasons.

When funds have been invested for a 2 year qualifying period into BPR then they are consider IHT free – any withdrawals from these funds during the lifetime of the investor will automatically be added back into their estate for IHT purposes.  The investor then has a 3 year window to qualify for Replacement Property Relief (RPR) which allows them to replace these funds into another qualifying BPR arrangement which would immediately IHT free.

If you were doing a regular withdrawal of £1,000 per month then you would need to find a provider who will allow you to top up by that amount.  There may well be providers that do allow this but again the providers that might allow this low level of topping up might not be suited for the client’s reinvestment either from a cost or diversification point of view.

We at Kuber Ventures believe that client’s should take withdrawals as one off lump sums starting at £10,000.  The reason for this is that we allow an existing Kuber clients to invest £10,000 per manager in our platform arrangement which gives the client access to a number of managers (currently 4) that offer a number of differing investment styles and withdrawals.  This means that withdrawals can be chosen from either an income tax or capital gains tax position or both and be replaced either in the original manager or a new one.

Diversification of managers, diversification of taxation withdrawals and diversification of reinvestment – that’s the Kuber Ventures way.