Recently, we were contacted by a client, in her late 80s, who has a large liability to Inheritance tax and is a part-owner in a family business.
She has large cash holdings and so the easiest way to mitigate the problem is to gift sums away.
However; in order for this to be effective she would need to survive 7 years – not guaranteed given her age.
Her Huntington Ross adviser recommended a £700,000 investment into a product that qualifies for Business Property Relief, which if held for 2 years (and is still held on death) would give IHT relief after those 2 years, a saving of £280,000 in IHT.
Often these types of investment are high risk, but in this instance the recommended plan was a low volatility investment with target returns of just 1.5%-2.5%pa after charges. The client wasn’t looking for growth, the savings against her IHT liability were her sole concern.
