PCEB Webinar – Tax Efficient Investing Part 2 - Benefits of Business Relief & Pensions

Our popular private client & entrepreneurial business webinars are back! Each month, we focus on a key topic for our private and entrepreneurial clients, concluding with an open tax clinic.

In part 2 of our Tax Efficient Investing webinar, we look at investing in Pensions and the associated tax reliefs and restrictions and also how investments qualifying for Business Relief can be effective in Inheritance Tax planning.

Both pensions and Business Relief investments provide access to established and valuable tax reliefs.

The reliefs associated with pension contributions have been heavily restricted in recent years so we will cover the rules as they stand today, where opportunities still exist, and things people should consider when building up a pension fund during their lifetime. We will focus mainly on the tax implications of personal pensions, but Scott Kent from MHA Caves Wealth will join us to provide some insight from a financial adviser’s perspective.

In relation to Business Relief investments we will cover the Inheritance Tax benefits associated with qualifying investments and Scott will look at the nature of such investments and how they compare to other, often higher risk investment opportunities such as the EIS investments covered in part 1 of this webinar.

Watch the webinar in full below

Key points in this webinar:

• The tax reliefs and potential charges associated with personal pensions including the reliefs available on contributions and in particular the impact of recent restrictions to the annual and lifetime allowances;
• The types of investments that can be held within a personal pension and the investment strategies that can be deployed;
• The assets and investments that qualify for Business Relief and how the relief can mitigate Inheritance Tax;
• What a Business Relief investment portfolio might look like and the associated risks and benefits;
• Q&A

Who should attend

• Individuals & Entrepreneurs with funds to invest
• High net worth individuals

Speakers

Patrick King – Tax Partner, MHA

Patrick is a Tax Partner and Chairman of MHA's Tax Steering Group as well as our national associations Tax Strategy Group, leading a team of specialists to ensure clients have access to the very best in compliance services and tax mitigation solutions. Patrick's own specialisms are capital tax planning for individuals, corporate restructuring, remuneration planning, profit extraction/repatriation and increasingly, international matters. He also advises clients on the tax implications of buying and selling their business. 

James Kipping – Tax Partner, MHA

James is a Tax Partner and Head of Private Client at MHA. James advises on a broad range of taxation matters concerning individuals, trusts and family companies including those with UK and international aspects. 

His expertise covers principally income tax, capital gains tax and inheritance tax planning as well as the restructuring of private companies, including mergers and demergers, acquisitions and MBOs, exit and remuneration planning.

Scott Kent – APFS Chartered Financial Planner, MHA Caves Wealth

Scott joined MHA Caves Wealth in 2018. He has achieved a Chartered Financial Planning status at the firm – which is regarded as the pinnacle qualification within the industry.

In addition, Scott holds the Certificate in Discretionary Investment Management and is also qualified to provide financial advice in long-term care. Prior to joining MHA Caves Wealth Scott had spent three years in the financial services industry, working at a local insurance firm and an IFA. He also holds a First-Class Degree in Economics at the University of Northampton, graduating in 2015.

Click here to download a copy of the webinar slides

Risk Warnings / Important information you should read:

MHA Caves Wealth is authorised and regulated by the Financial Conduct Authority (FCA), Financial Services Register number 143715 and is a legally independent financial service and wealth management business who alone takes full responsibility for the advice they provide. Information and comment provided by MHA Caves Wealth on this website is generic in nature and should not be construed as personal financial advice

This communication is for general information only and is not intended to be individual investment advice, recommendation, tax or legal advice. The views expressed in this article are those of MHA Caves Wealth or its staff and should not be considered as advice or a recommendation to buy, sell or hold a particular investment or product. In particular, the information provided will not address your personal circumstances, objectives, and attitude towards risk. Therefore, you are recommended to seek professional regulated advice before taking any action.

Key Risks: Capital at risk. Past performance is not a guide to future performance. The value of an investment and the income generated from it can go down as well as up, and is not guaranteed, therefore you may not get back the amount originally invested.

Investment markets and conditions can change rapidly. Investments should always be considered long term.

BR (BPR) – Business Relief schemes:

Business Relief schemes are high risk investments and there may be no market for the shares should you wish to dispose of them. You may lose your capital. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.

The tax treatment depends on the individual circumstances of each client and may be subject to change in future.

There are a number of risk considerations that need to be taken into account. It is important that you are aware of these.

• Investments made by the Product Provider are into unquoted companies. These are deemed to be higher risk than companies listed on the London Stock Exchange Official List. You could lose some or all of your money if the investment falls in value or the company fails.
• Past performance is no guide to future performance and there is no guarantee that the investment objective will be achieved.
• There is no guarantee of the level of capital gains or the income that will be generated by this investment as this will depend on the underlying performance of the investee companies.
• Investments in shares in unquoted companies are not readily marketable and the timing of any realisation cannot be predicted.
• This type of investment is designed to be held until death, as investments in qualifying companies must be held for at least two years (and at the time of death) in order to be potentially eligible for business relief. The Product provider will make investments into companies that it reasonably believes to be qualifying investments for BR at the time of purchase but cannot guarantee that any such investments will remain qualifying.
• The relevant assets still form part of your estate and therefore are taken into account for residence nil rate band purposes i.e. they count towards the £2m taper threshold.
• The investment will not be exempt from IHT in the event of your death within the first two years.
• Any capital withdrawals will no longer qualify for BR and therefore lose any IHT exemption.
• Rates of tax, tax benefits and allowances are based on current legislation and HM Revenue & Customs practice. These may change from time to time and are not guaranteed. In this case, the IHT relief available on this investment may be lost. Changes in law can have retrospective effect.
• This type of investment is more suitable as an inheritance tax planning tool rather than an investment in its own right. If, in future, the Government was to abolish Business Relief, you could be left with a potentially unattractive asset.

This Information represents our understanding of current law and HM Revenue & Customs practice as at 29 November 2022. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. You are recommended to seek professional regulated advice before taking any action.