John Williams (pictured), Managing Partner at EIS Investment Platform, Kuber Ventures on the UK government’s announcement that it will freeze IHT threshold to fund social care for elderly…
Despite words to the contrary in his Autumn statement, the Chancellor is expected to announce [has announced] the freezing of the inheritance tax threshold to help pay for social care – in effect, he is taking from the dead to help the dying.
Thousands more people will now be caught by IHT and, must now find other means to limit the amount taken from their estate. With the end of the tax year fast approaching, it is even more important that people now re-evaluate their IHT efficiency.
One way of avoiding paying excess IHT is to ring fence your money within an Enterprise Investment Scheme (EIS) portfolio. After a period of two years, the value of any EIS investment will be outside that person’s estate, therefore after death, beneficiaries will receive 100 per cent of the return. This is known as Business Property Relief.
On realisation of EIS shares, the proceeds will fall back in to the investor’s taxable estate, but they can re-invest within a three year period and qualify immediately for IHT relief.
