Business Property Relief (BPR) stands out as a significant mechanism for mitigating Inheritance Tax (IHT) on the transfer of business assets, applicable both during one's lifetime and upon death.
Crafted to foster investment within the heart of the economy - trading businesses - BPR provides a pathway to 100% relief for shares in qualifying unlisted companies, including those listed on the Alternative Investment Market (AIM). For eligibility, the criteria are clear:
The Alternative Investment Market (AIM) serves as a vibrant platform within the London Stock Exchange, tailored for the ambitious, smaller enterprises seeking to share their growth journey with investors. This market's flexibility, less stringent than that of the main market, makes it an appealing choice for those looking to diversify their investment portfolio with potential IHT benefits.
AIM ISAs: These Individual Savings Accounts offer a unique blend of ISA tax benefits coupled with IHT relief, thanks to BPR. By investing in select AIM-listed shares that meet BPR criteria, investors can enjoy growth free from income and capital gains tax, with the added advantage of passing these investments to their heirs free from IHT, provided the two-year holding period is met.
AIM GIAs: General Investment Accounts holding AIM shares extend the BPR benefits beyond the confines of ISAs. This avenue offers investors a strategy to achieve IHT efficiency through careful selection of AIM shares that qualify for BPR, marrying investment growth with thoughtful estate planning.
Investing in BPR-qualifying shares through AIM ISAs and AIM GIAs represents not just a financial strategy but a commitment to nurturing the growth of trading businesses while securing a tax-efficient legacy for future generations. This approach allows investors to support the innovation and dynamism of smaller companies while ensuring their estate planning aligns with their aspirations for their family's future.
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Note: This page is for information purposes only and should not be considered as financial advice. Always consult an Independent Financial Adviser for personalised financial advice tailored to your individual circumstances.