Inheritance tax solutions
Our estate planning solutions invest in companies that quality for Business Relief and could reduce your inheritance tax liability
Inheritance Tax and BR
Inheritance Tax (IHT)
The value of your estate that exceeds available thresholds could be subject to inheritance tax at a rate of 40%. There are various solutions available, one of which is Business Relief (BR).
IHT applies to property, savings, investments and any other assets after deducting debts, such as your mortgage. Any part of your estate that's left to your spouse or civil partner is exempt from IHT if they permanently reside in the UK.
Business Relief (BR)
IHT relief is available after just two years by investing in companies that qualify for BR. For you to benefit from BR, you must have held the shares for at least two years at the date of your death. You can access BR-qualifying companies by investing in one of our inheritance tax solutions.
What IHT Relief does Business Relief offer?
Business Relief (formerly Business Property Relief) is an established relief from inheritance tax. The level of relief from the normal IHT rate (40%) will depend on the type of shares you own. Until April 2026, all BR-qualifying shares will be fully exempt from IHT.
After this date:
- Unlisted BR-qualifying shares will benefit from 100% IHT relief for the first £1 million and thereafter, IHT will apply at half the normal rate (20%).
- All AIM-listed BR-qualifying shares will benefit from IHT at half the normal rate (20%).
Please note: As these proposed reforms have not yet been drafted in legislation, they are subject to change.
Using BR as an IHT solution
BR-qualifying investments can provide fast track to IHT relief while retaining access to your funds.
IHT free after two years
With a BR-qualifying investment, investors' shares become eligible for inheritance tax relief after just two years, as long as the shares are held at the time of death (subject to thresholds).
Control and access
Our inheritance tax solutions allow investors to request access to their funds at any time, either in full or to provide an income. This is subject to liquidity and the terms of the product offer.
Investment insurance
As standard and at no extra cost, investors' funds are protected from any fall in value of up to 20% of their initial net investment (T&Cs apply, see policy for details). Optional life cover is also available for an additional fee.
IHT investment products
Downing Estate Planning Service
The Downing Estate Planning Service aims to provide IHT relief after two years by investing in BR-qualifying businesses and targets steady returns of 3-4.5% each year. We invest in businesses that matter across our two strategies.
Downing AIM Estate Planning Service
The Downing AIM Estate Planning Service looks to provide IHT relief after two years through a diversified portfolio of companies that are listed on AIM (formerly the Alternatives Investment Market). We seek attractive investment opportunities in growth companies.
Downing AIM ISA
The Downing AIM ISA, investments are held in an ISA wrapper for further tax benefits. We look to provide IHT relief after two years alongside investment growth by investing in a diversified portfolio of companies that are listed on AIM (formerly the Alternative Investment Market).
Frequently asked questions about IHT and BR
If you have any additional questions, please do not hesitate to reach out to us.
The value of your estate that exceeds the below allowances will be subject to IHT at 40%.
The nil rate band (NRB) is currently £325,000 per person. This is the amount of value in your estate that can be passed on without paying IHT. Spouses and civil partners can transfer part or all of their unused NRB to each other.
The residence nil rate band (RNRB) is £175,000 (tax year 2027/28). If you own a home, ownership can transfer to a direct descendant after your death. There are conditions for this threshold to be available.Inheritance Tax (IHT) is paid on the
Business Relief was introduced in 1976 to ensure small businesses wouldn't have to be sold to pay IHT bills when an owner died. The tax relief since has been extended to include people who own shares in qualifying UK trading businesses.
This includes shares in unlisted companies that are not traded on a public stock exchange and in companies listed on AIM (the Alternative Investment Market). The level of IHT relief you benefit from will depend on the type of shares you own.
For you to benefit from BR, you must have held the shares for at least two years at the date of your death.
Downing's IHT solutions offer investors access to invest in BR-qualifying companies, allowing them to benefit from IHT relief on their investments.
Investing in estate planning solutions carries risks and may not be suitable for everyone.
There are various risks to consider before investing and we recommend that you seek financial advice.
Investment risks
The value of your investment can go down as well as up. Also, shares in smaller companies can be harder to sell and can be more volatile (the value may go up and down more) than larger companies quoted on a main stock exchange.
You cannot rely on the past performance of an investment to judge how successful it will be in the future.
BR and IHT relief risks
BR is possible if you hold qualifying shares for a minimum of two years and at death. However, BR is not guaranteed and is subject to thresholds. It is also dependent on the business continuing a qualifying trade.
Also, the companies within the service could lose their BR qualifying status if the BR rules change, which could result in an IHT liability on your investment.
Please note this is only a brief overview of the risks involved with investing in IHT solutions. Please read full details of all the risks within the appropriate product literature before investing.
How to invest
It is important that both advisers and investors understand our IHT solutions thoroughly, paying attention to any risks involved before investing. Our dedicated team is always on hand to answer any questions you may have.
Find the right product
At Downing we are committed to ensuring our investors are matched with the right IHT solution for them. We encourage investors to read our product literature thoroughly and understand the risks.
Speak to an adviser
At Downing, we are not able to provide financial advice. Investors should consult their financial adviser before making any investment. A financial adviser can help you to plan properly towards your financial goals.
Invest with Downing
When investors are ready to invest, they and their adviser can request an application form.
£5.5 trillion will pass between generations over the next 30 years, and that wealth transfer is set to rise to £100 billion by 2025
Wealth Transfer in the UK, Kings Court Trust, 2017
We're here to help
If you are a financial adviser or discretionary fund manager, and you want to discuss our IHT products and solutions, call 020 7630 3319 or email us at sales@downing.co.uk
If you are a private investor call 020 7416 7780 or email customer@downing.co.uk