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For Professional Clients Only

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The lifetime transfer tax can be a deterrent for investors seeking to open a trust in order maintain control over their assets on behalf of beneficiaries. Below we see how investing into a Business Relief (BR) solution can mitigate both the lifetime transfer tax (when transferring shares to a trust) and Inheritance tax (IHT).

Client Scenario

  • David is 70 and would like to pass money on to his grandchildren
  • He is also concerned about IHT
  • He does not want to make outright gifts to his grandchildren, as they are still young and he is concerned how they might spend the money

The Problem

  • He wants discretion over how much his grandchildren benefit
  • He has £500,000 to invest and likes the control of a trust and the fact Probate would be avoided
  • He is not willing to suffer the 20% chargeable lifetime transfer tax now to save IHT later

The Solution

  • David can invest into a BR solution
  • After 2 years the BR asset is exempt for IHT purposes
  • At this point the BR shares are transferred into a Discretionary Trust
  • If the Trust assets remains in BR shares there are no periodic or exit charges
  • If required, at a later date the Trustees can dispose of the BR shares, to buy a property for example (this will have IHT implications but the assets are in the Trust without a 20% charge)

Capital is at risk and the investor may not get back the amount invested

For more information about how our tax products can help with this scenario, please contact our tax team using the details below.   |   020 7071 3920  |

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Important Information
Issued by LGBR Capital Limited, Candlewick House, 120 Cannon Street, London EC4N 6AS. LGBR Capital Limited is an Appointed Representative of Mirabella Advisers LLP, which is authorised and regulated by the Financial Conduct Authority number 606792. This document should not be regarded as constituting advice in respect of legal, taxation, investment or other matters. This document is intended to be communicated solely to persons that fall within the FCA classification of ‘Professional Client’. LGBR Capital Limited operates as distributor of the investment products and strategies of other selected providers. LGBR Capital does not manufacture investment products itself. Past performance is not a guide to future performance; the value of an investment and income from it can go down as well as up. Contact the sender of this document if you would like further information about any of the funds, including charges, expenses and risk considerations. Prospective investors are advised to consult their own professional advisers before contemplating any investment. No representation or warranty expressed or implied is made or given by any person as to the accuracy or completeness of the information contained in this email and no responsibility or liability is accepted for any such information. This material may not be distributed, published or reproduced in whole or in part.

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