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B L AC K F I N C H I N V E S T M E N T S LT D
TA X P L A N N I N G I N T H E P O S T B R E X I T WO R L D
P R E S E N T E D B Y
J E R RY P R I C E
D i s t r i b u t i o n D i r e c t o r
B l a c k f i n c h I n v e s t m e n t s L i m i t e d
I M P O R T A N T I N F O R M A T I O N
This presentation is directed at investment
professionals only, and should not be relied
upon by any other person. The investments
referred to in this presentation may not be
suitable for all investors and we recommend
that you seek independent advice before
making a decision. Nothing in this
presentation should be regarded as
constituting legal, taxation, investment, or
other advice.
Authorised and regulated by the Financial Conduct Authority
This document is not a personal recommendation. No
decision to invest (or not to invest) should be based on this
document alone, and no liability is accepted by Blackfinch
for any direct or indirect or consequential losses arising from
a decision to act or not to act based on this presentation.
The statements and opinions set out in this presentation are
made as of the date of presentation (June 2015), and may
not be applicable thereafter. Opinions are based on our
analysis of data that we believe to be objective and reliable;
however we accept no liability in respect of its completeness
and accuracy (except where the incompleteness or
inaccuracy is caused by gross negligence or fraud). Past
performance should not be regarded as an indication of
future results.
Rates of tax, tax benefits and allowances are based on
current legislation and HMRC practice and depend on
personal circumstances. These may change and are not
guaranteed.
V A L U E S A N D R E T U R N S
No guarantee can be provided on
investment performance and the growth
generated.
L I Q U I D I T Y
Investments in unquoted companies and
are not readily realisable. Shares must be
held for at least 2 years at the date of
death to achieve BR qualification. We
should be able to redeem an investment
within 3-6 months but this could take
longer for unusually large withdrawals.
T A X A T I O N
Any changes to the taxation environment
or HMRC practice may affect investment
returns.
B U S I N E S S R E L I E F
We will invest in companies which we
reasonably believe qualify for Business
Relief, but we can give no commitment
that any such investment will remain a
qualifying investment at all times or in the
future. Verification from an independent
accountancy firm on each investment
sector is always obtained prior to investing.
T O D A Y S A G E N D A
• Inheritance Tax Planning using Business Property Relief
• Income Tax and Capital Gains Tax Planning using Enterprise Investment Schemes.
• Tax Planning for Business Owners
T H E G R O W I N G M A R K E T
5,000 more estates will be liable for
IHT by 2018
In 2012 2% of households fell into
IHT mitigation by 2018 10% of
households will fall into IHT mitigation
2016/17 490,100 deaths will be subject to
IHT by 2018/19 545,000 deaths will be
subject to IHT
HMRC are still receiving record
receipts from IHT
July 2015 figures show that £3.825 bn
received an increase of 11.9% since
2013/14 (source HMRC IHT statistics)
Receipts up to Feb 2016 show an
increase of 21.6% compared to the
same period last year.
95% of IHT mitigation is invested in
unlisted stock in comparison to AIM stock
Due to longer life spans demand for more
flexibility around IHT mitigation
OPPORTUNITIES AND THREATS WITH REGARDS TO
BREXIT VOTE Inheritance Tax Planning
Opportunities
• Control
• Accessibility
• Uncorrelated growth
potential
• Simplicity
• Transparency
Threats
• Regulatory change
• Scaremongering
• Property price downturn
• Aggressive Anti-Avoidance
Schemes
A POST BREXIT CERTAINTY
• If you think you have an Inheritance Tax problem and nothing is done then your estate will pay 40% IHT to the HMRC
A D V A N T A G E S A N D D I S A D V A N T A G E S O F B P R
A D V A N T A G E S
— Relief after 2 years of holding asset
— Client keeps control and access
— Easy to understand in comparison to other
types of mitigation
— No requirement for medical reports
or examinations
— No age limits
— Powers of Attorney can instruct on behalf of clients
— Clients can take regular or ad-hoc withdrawals
D I S A D V A N T A G E S
— Capital invested is at risk
— HMRC death test
— Changes to rules and legislation
— Liquidity may be limited
— Non-regulated investment – but Non-UCIS
EIS encourage investment into smaller, growing UK companies by offering significant tax reliefs and
deferrals in exchange for a level of risk.
With the potential for the loss of EU subsidies the need for UK businesses to have investment will
only increase.
EIS (and VCT) will provide such investment and as such Blackfinch feel the demand for such tax
efficient vehicles will increase.
The skill in EIS providers will be to choose assets that can mitigate the uncertainties of a post
BREXIT world with a objective of providing capital preservation and growth.
The changes in pension legislation have seen an increase in EIS investments
E n t e r p r i s e I n v e s t m e n t S c h e m e s ( E I S )
M i t i g a t i n g I n c o m e Ta x a n d C a p i t a l G a i n s Ta x Po s t B R E X I T
B A C K G R O U N D T O T H E E I S M A R K E T
Early 1980’s
introduction of business
expansion schemes
1994 Enterprise
Investment Scheme
replace Business
Expansion Scheme
Today EIS recognised as
key growth policy
Statutory relief to
encourage private
investment into smaller
British businesses
U N D E R LY I N G A S S E T S
Industry and
Infrastructure
Food and Drink
Technology
Transport
General Enterprise
Media and
Entertainment
T A X B E N E F I T S O F E I S
Minimum hold has to
be 3 years
30% upfront income
tax relief
100% IHT relief
after 2 years
100% CGT relief
on any gains
CGT deferral relief
Losses can be offset
against either income
tax or capital gains tax
Maximum investment
in any given tax year is
£1,000,000
Carry back is available
to the previous tax
year only
BLACKFINCH EIS PORTFOLIOS
Media
• Film Score Music
• TV Distribution
Asset Focused Construction
• Residential
• Nursing and Care Homes
• Retirement Villages
• Crematoria
G R O W T H I N E I S S A L E S
More emphasis on growth EIS following EU state aid rules
Limits on Pension contributions should drive more business to EIS
Clients may look for tax efficient drawdown on pensions
Because of renewable energy being withdrawn new underlying assets are being sought
Threat
HMRC are now looking at businesses that have too much
cash on deposit. On death the cash on deposit will form
part of the business owners estate and IHT will be paid
by the beneficiaries.
Opportunity
The cash on deposit can be used to form an alternative
trading entity which will attract Business Property Relief
and provide returns.
Tax P lann ing for Bus iness Owners
T H A N K Y O U