FINANCIAL COMPUTING
CONSIDER BUSINESS PROPERTY RELIEF
INSURANCE
By Becky Rogers, Senior Paraplanner at FFP With many tax allowances now frozen at current levels until at least April 2026, is it time to consider Business Property Relief (BPR) investments to complement more traditional tax efficient investments like ISAs and pensions? BPR has now been around for over forty years and allows individuals to pass on BPRqualifying assets entirely Inheritance Tax (IHT) free to their beneficiaries upon death (subject to certain stipulations) along with potentially other tax benefits. Successive governments have encouraged the use of BPR schemes and offered tax advantages to investors in order to encourage private funding into new and innovative UK companies, thus stimulating and growing the UK economy. Not all investments into businesses will qualify for BPR and there is always the possibility that tax rules and legislation could change in the future, however, BPR-qualifying investments will typically be in
shares in an unquoted qualifying company, shares in a qualifying company listed on the Alternative Investment Market (AIM) or an unincorporated qualifying trading business, a partnership, for example. As investment will generally be into unlisted start-up companies, the investment risk can be high, with greater volatility, and be harder to sell. However, by diversifying investment across several potentially BPR-qualifying companies you have the potential to spread the risk somewhat, but these are not suitable investments for everyone and there is a real risk that investment capital can be lost, therefore it is imperative that investors have sufficient income and capital elsewhere in order to maintain their lifestyle. Just as with more traditional investments, for example, into unit trusts, Open Ended Investment Companies (OEICs) and managed funds, risk should come hand-in-hand with reward. In addition to the potential for greater growth from small start-up
businesses compared with the established large corps, the government offers certain tax advantages to investors. There are different types of BPRqualifying investments which carry different rules. However, some of the tax advantages on offer could be the ability to reclaim up to 30% of the value of your investment in income tax relief, the ability to defer a capital gain and the potential to receive tax free dividends. They also offer the ability to pass on qualifying shares to your beneficiaries entirely free of IHT (provided shares are held at the time of death and have been held for at least two years – note the much shorter time frame than the ‘7-year rule’ applying to some gifts!) and should not use your inheritance tax nil rate band, albeit the value of BPR investments remain in your estate for the purposes of calculating the residence nil rate band. BPR investments are not suitable for everyone, however, with frozen tax and tax efficient investment allowances for at least the next
AN EASY GUIDE TO CHOOSING YOUR INSURANCE BROKER By Dean Holloway When you need to insure your business, you could spend hours searching comparison websites. You could do it yourself or you can go the route most people choose and find an insurance broker. A broker acts on your behalf and will do the research and source the best policies and providers for your needs. CHECK THE REVIEWS Reviews are one of the most important indicators that your broker is well liked and possesses the experience and expertise of various insurance situations. They may be well known in the local business community. Check their testimonials on their website to see what others say about them. THE CONSULTATION Once you have narrowed down a list of prospective brokers it is time to set up a consultation. The consultation is an opportunity
Much like a doctor, your insurance broker has to know all the details to accurately diagnose the right policy and provider. Be as open as possible so a correct assessment can be made and non-disclosure is not a risk. A qualified broker has access to many insurance companies and can discuss knowledgeably what each can offer and the covers they believe you will need. They will give you informed options so that you are in control of what you wish to cover. See if your insurance broker can offer you ‘added value’. Do they offer more than insurance cover? Will they disappear as soon as
To those who have maximised their ISA and pension allowances or those who find themselves now needing to address estate planning, please contact Fort Financial Planning on 01935 813322 for a completely free, confidential and no obligation chat.
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for you and the broker to get to know each other, ask pertinent questions, and review services and establish a rapport.
five years, compared to rising incomes and estate values, it is inevitable more people will find themselves with bigger tax bills in the coming years and perhaps this will mean that BPR investments will become as familiar as more traditional tax efficient investments.
You can rest easy with our regular compliance articles, action plans and suppor keep you up to date on the latest legal developm as your company finding you grows.
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We aren’t just here to help you when you have a cheap business insurance, the purchase has taken place or claim, all our clients have access to FREE risk resources that will improve efficien we believe in finding youmanagement the best will they stay in contact offering and reduce risk within your company whatever or working sector of business you are in. information throughout the year? Company Needs business insurance and
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30 years’ experience and as part of th with you to ensure thatWith youover are Gauntlet Group we offer an unrivalled level of a supported at all stages. to market. We have access to more options and Communication
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THE PURCHASE Choosing insurance can be overwhelming. Always choose a well-reviewed insurance expert, capable of providing you and your business with the best possible options and coverage. Look for information about the insurance company that your broker has chosen so you feel confident with whoever you are giving your money to. Remember, there are many multinational insurance companies that you may not have heard of, as they don’t need to advertise on customer
platforms but are as securely financially rated as the high street names. Ask, if you do not understand the vocabulary that your broker is using. Remember to balance the final price with the cover you have purchased. Price, of course, is an important factor. However, it is important to get it right, otherwise you could find that you are either paying far more or that when you make a claim, you realise that your insurance doesn’t cover it.
To advertise – 01935 424724 • email: info@theconduitmagazine.co.uk • www.theconduitmagazine.co.uk 86545 Conduit (August 2021).indd 15
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