Kingswood has launched an AIM, inheritance tax (IHT) and ISA portfolio service as it has seen growing inheritance tax needs from its clients.
The service from the wealth and investment management group will offer both income and capital growth solutions in a structure that will mitigate inheritance tax after two years, the group said.
Investors' portfolios will hold between 25 to 40 companies, across multiple sectors, that have been "independently assessed" for their suitability for business relief (BR).
BR is efficient for IHT purposes because an investment into a qualifying company can be passed down without incurring a tax as long as it has been held for at least two years. Meanwhile, making gifts or settling assets into trust, some of the other strategies to reduce IHT liability, usually takes seven years to be completely free of tax.
Using the relief also allows clients to retain control of their investments as it can remain in their name until it is passed down.
Kingswood managing director and head of investment management and proposition Paul Surguy commented the firm "recognised the growing need and demand from our clients for estate planning services and built an easy-to-use, speedy solution which simultaneously helps mitigate IHT and target portfolio growth via diversified investments in AIM-listed firm".
The firm said that over six million ISA investors are over 65. ISAs are liable to inheritance tax so these people must choose between the IHT issue or transfer the money to an IHT planning vehicle, which could mean losing control of their assets or waiting several years for the mitigation to take place.
The latest data from HM Revenue & Customs showed IHT receipts from April to December last year were £5.3bn, a £700m rise compared to the same period the previous year.
Kathleen Gallagher is a freelance journalist
