Escape the Death Tax

07.07.2016 • Gold and Natural Resources

From MoneyWeek (Great Britain)-

Judging by the response we get from MoneyWeek readers when we cover the topic, inheritance tax (IHT) – which is charged at a rate of 40% on the part of your estate that is worth more than £325,000 (or £650,000 for a couple) when you die – is probably the most loathed of all taxes, writes John Stepek. The bad news is that the IHT take hit a record high of £4.6bn for the tax year just past. The good news is that there are several ways to protect your assets.

One of the less well-known options is to invest in assets that qualify for Business Property Relief (BPR). Once a qualifying investment has been held for two years, it is 100% IHT-free. To qualify for BPR, a company cannot be listed on a recognised stock exchange, and its main business cannot be investing in other companies or property – so investment trusts do not qualify, for example. Where would you find such a company? One obvious hunting ground is the Alternative Investment Market (Aim), which is not a recognised stock exchange.

Of course, the tax tail should never wag the investment dog – there is no point in careful IHT planning if you only save on tax because you’ve lost all your money. So any stocks you invest in need to be companies you would want to buy anyway. Below, analyst and private investor Richard Beddard looks at five stocks that are appealing regardless of their BPR status.

A word of warning: a company may currently qualify for BPR (we have checked those listed below with the IHT screening tool offered by Investor’s Champion at but that could change. The key point is that it needs to qualify when your estate is passed on. So it is vital to keep a track of your Aim holdings and their status…

-Read more at (paywall) (English)-

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