IHT exempt investments

Caporegime
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They're a totally different animal to bog standard investment funds so making an apples to apples comparison isn't really possible. They really are suitable only for a limited number of investors where the higher fees can be justified by significant tax savings that are required in a shorter timeframe than would otherwise be possible.

Here's some info: https://blackfinch.investments/iht

Ah so they take 2% up front (plus a possible intermediary fee for the advisor) then charge a 0.5% annual fee and a 1% dealing fee... I mean I guess if you're suddenly told you have only a couple of years left to live or so.... even then could just as well invest directly in a portfolio of AIM shares yourself I guess.
 
Associate
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Thanks,

Are there any rumors about changes to IHT allowances? Any further increases ?

Sid

Not sure about any changes to IHT, but there was a tax simplification report last year which had some talk about whether having BPR on AIM shares is appropriate, but I think it stopped short of recommending action to the government one way or the other. It did recommend removing the capital gains tax free uplift that is currently applied to inherited assets however. Doesn't appear to be any updates about this though that I can see.
 
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Ah so they take 2% up front (plus a possible intermediary fee for the advisor) then charge a 0.5% annual fee and a 1% dealing fee... I mean I guess if you're suddenly told you have only a couple of years left to live or so.... even then could just as well invest directly in a portfolio of AIM shares yourself I guess.

You could, but it would be a totally different way of going about it and not one that I would imagine a retail investor could do reliably, much less so if they've been told they have a couple of years to live. :p
 
Caporegime
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You could, but it would be a totally different way of going about it and not one that I would imagine a retail investor could do reliably, much less so if they've been told they have a couple of years to live. :p

I dunno, given that random dart throwing at the FT beats most fund managers the opposite is just as easily true! :p
 
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I dunno, given that random dart throwing at the FT beats most fund managers the opposite is just as easily true! :p

Not really as your aim isn't to beat a particular index or fund manager, it's to 'beat' HMRC, who will adjudicate when the relief is applied for. Like I said, they're not really comparable to garden variety investment funds when it comes to measuring performance/success.
 
Caporegime
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Not really as your aim isn't to beat a particular index or fund manager, it's to 'beat' HMRC, who will adjudicate when the relief is applied for. Like I said, they're not really comparable to garden variety investment funds when it comes to measuring performance/success.

Eh? Beating HMRC is the given here in either case no? (Investing directly in qualifying AIM companies or doing the same via a fund) Given the same timeframe/same underlying investments surely the comparison left here is whether you likely beat the fund manager and their fees?
 
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Eh? Beating HMRC is the given here in either case no? (Investing directly in qualifying AIM companies or doing the same via a fund) Given the same timeframe/same underlying investments surely the comparison left here is whether you likely beat the fund manager and their fees?

You pay your money, you take your chances. You can be the guy thinking they can beat the market with unquoted companies or the guy who invests in the companies funding the unquoted companies. :)
 
Caporegime
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You pay your money, you take your chances. You can be the guy thinking they can beat the market with unquoted companies or the guy who invests in the companies funding the unquoted companies. :)

But this isn't about beating the market per se rather it is beating the fund manager and their hefty fees... and yes I don't see much reason to assume they've got much of an edge here after fees.

I'm not sure what you're referring to by funding the unquoted companies, buying shares in the secondary market isn't funding anything directly. Unless you're alluding to other links/relationships between the funds and the companies they choose to invest in... which tbh.. would only make me more skeptical about how they've constructed their portfolio.
 
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But this isn't about beating the market per se rather it is beating the fund manager and their hefty fees... and yes I don't see much reason to assume they've got much of an edge here after fees.

I'm not sure what you're referring to by funding the unquoted companies, buying shares in the secondary market isn't funding anything directly. Unless you're alluding to other links/relationships between the funds and the companies they choose to invest in... which tbh.. would only make me more skeptical about how they've constructed their portfolio.

So you can buy the shares in the unquoted companies and be at the behest of the inherent volatility and risk that comes with that, or you can invest in the companies by loaning money to them. Both approaches qualify for BR. If you're making loans to the companies, you can structure it to be a loan on a first charge basis (i.e. you're first to be repaid if the company goes belly up). If you're just a shareholder, you're last on the list of people getting their money back. This is why these specialist IHT portfolios tend to be more expensive - you're not just buying into a basket of AIM shares. You can buy an AIM tracker fund for peanuts, but it's not necessarily IHT efficient.

As to the whole argument of beating fund managers net of fees; well it might be possible but my response is that if you're really that good, you're probably better off proving it to JPMorgan and have them pay you half a million plus bonuses and pension a year. :p
 
Caporegime
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So you can buy the shares in the unquoted companies and be at the behest of the inherent volatility and risk that comes with that, or you can invest in the companies by loaning money to them. Both approaches qualify for BR. If you're making loans to the companies, you can structure it to be a loan on a first charge basis (i.e. you're first to be repaid if the company goes belly up). If you're just a shareholder, you're last on the list of people getting their money back. This is why these specialist IHT portfolios tend to be more expensive - you're not just buying into a basket of AIM shares. You can buy an AIM tracker fund for peanuts, but it's not necessarily IHT efficient.

Ah ok fair enough, that is different if you're looking at loans to AIM companies rather than buying shares in. That was what I was comparing, investing in the shares via a fund vs directly (and that is what the PDF on your link seemed to indicate when I skimmed over it too, granted I've not looked at every single one on that site)

As to the whole argument of beating fund managers net of fees; well it might be possible but my response is that if you're really that good, you're probably better off proving it to JPMorgan and have them pay you half a million plus bonuses and pension a year. :p

But the point is you don't necessarily need to be really good to beat them! :p
 
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