Find out the four reasons why working with the ProVen Estate Planning Service could help manage inheritance tax liabilities
Inheritance tax revenue has hit a new record, with £3.5bn collected in the six months to September. This is up from the previous six-month record of £3.1bn in the same period a year ago.
The amount HMRC collects from the tax is rising because of rising property prices, and because the threshold at which inheritance tax is charged has been frozen since 2009 and will not rise again until 2026 at the earliest.
If inheritance tax applies, beneficiaries will pay 40% tax on assets they inherit.
But there are many ways to reduce the burden of inheritance tax for your clients and increase the amount that they can pass onto loved ones.
Below, we outline four reasons why working with the ProVen Estate Planning Service could boost your clients’ estates and reduce inheritance tax liabilities.
The ProVen Estate Planning Service specialises in investments that are likely to be exempt from inheritance tax because the companies we back are likely to qualify for business relief. Current HMRC rules mean that money invested in companies that qualify for business relief may be free from inheritance tax if held for a minimum of two years.
Accessing business relief is becoming increasingly popular with older individuals undertaking estate planning. This is because the two-year qualification period means business relief offers faster inheritance tax exemption than giving money away during your lifetime, where the giver has to survive for seven years before the gift becomes exempt from inheritance tax.
Of course, UK tax rules and regulations are subject to change and any ability to obtain tax reliefs will depend on the individuals personal circumstances.
The ProVen Estate Planning Service (PEPS) is part of ProVen, one of the longest-standing VCT providers in the UK. These products are managed by Beringea, a transatlantic investment firm that has successfully backed businesses in the UK and US for more than 30 years.
This means we have a long track record of working with investors, and PEPS has been praised for its investment performance. We were rated an impressive 87 out of 100 in the latest Tax Efficient Review (TER) by Martin Churchill and Hugh Rogers.
The independent review noted that our tailored investment propositions meant recent performance had been impressive. The overall blended return across the ProVen Estate Planning Service has been 5.5% a year over the past five years, above the stated target returns of 4-5% a year.
Read in full the Tax Efficient Review for the ProVen Estate Planning Service here.
Of course, past performance is not indicative of future returns, and any potential investor should be aware that the value of investments and the income from them can go down as well as up.
At the ProVen Estate Planning Service, we focus on two investment areas: Lending and solar. We believe both these sectors offer lucrative opportunities for investors.
Investors have the flexibility to select if they want to select lending, solar or a mixture of both. We also offer the opportunity for investors to receive dividends for income.
Our solar companies on the PEPS platform generate stable income through Government-backed, RPI-linked revenue streams that provide a potential hedge against inflation.
We believe renewable energy is only going to grow over the coming decades, but we focus on the more mainstream solar energy and have no exposure to more volatile sources such as anaerobic digestion or hydrogen. Our portfolio includes 9 ground-mounted solar farms and 2,700 rooftop assets.
If investors select the lending option, they will be investing in companies that loan money to SMEs. The interest paid on these loans provide a steady income to shareholders.
A total of £40m has been loaned to UK companies and our lending companies have a track-record of 100% repayment.
We adhere strictly to regulations and are governed by independent boards and valuation processes across our four trading companies.
We also make it as easy as possible for investors to access their money. PEPS aims to give investors the opportunity to access their portfolio monthly (subject to liquidity, 30 days’ notice and Beringea’s discretion).
We are always open and transparent about our charges and offer competitive fees compared to other services.
Our main charges are:
• Initial charge: 1.5% of the amount invested into the Service, plus 0.5% administration fee (excluding VAT)
• Annual administration charge: 0.5%, plus up to 1.5% per trading company (these costs are borne by the trading companies)
The ProVen Estate Planning Service is a discretionary investment platform focusing on solar and lending investments. Find out more about the ProVen Estate Planning Service by visiting our website.
The contents of this article should not be construed as investment, tax, financial or legal advice. We recommend any individual investor seek advice from a regulated Financial Adviser.
Investments accessed through the ProVen Estate Planning Service are made into private companies and are deemed to carry a higher risk than many other types of investments. Any potential investor should read the full risks associated with the Service before deciding whether to invest, and in particular should note:
• Your capital is at risk: your capital is at risk, past performance is not a guarantee of future results, and there is potential that the value of investments may fall as well as rise;
• Tax rules and reliefs can change: UK tax rules and regulations are subject to change, and such changes may be retrospective. Your ability to obtain tax reliefs will depend on your personal circumstances; and
• Qualifying status: the availability of tax reliefs depends on trading companies withing PEPS maintaining their qualifying status, meaning we cannot guarantee all investments will qualify in future.
This article is for UK residents interested in findingout more about inheritance tax. The explanation the tax rules set out in this articlehave been written in accordance with our understanding of the law andinterpretation of it at the time of publication. It is not our intention tooffer legal, tax or investment advice, and we always recommend that investorsseek professional advice that can take account of their personal circumstancesbefore making any investment or estate planning decisions.
This hasbeen approved as a financial promotion by Beringea LLP of Charter House, 55Drury Lane, London, England WC2B 5SQ, registered in England & Wales, numberOC342919 and authorised and regulated by the Financial Conduct Authority,number 496358. This article does not constitute an offer to buy or sell aninvestment nor does it solicit any such invitation. You should invest on thebasis of information contained in the investment documents (which for theProVen Estate Planning Service comprise the Brochure and Investor Agreement), moreinformation is available on the ProVen website, www.proveninvestments.co.uk.Remember, when investing, capital is at risk and past performance is noguarantee of future results.
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Find out more about the ProVen VCTs’ annual shareholder event, which featured insights from Beringea, the investment manager, the boards of the two funds, as well as several of the companies from the portfolio
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