We live in a world of acronyms..

IHT, ISA's and BPR - We live in a world of acronyms, and we are seeing an increasing use of these three.

We at Blackdown Financial seem to be spending more time helping and advising clients in respect of their potential Inheritance Tax (IHT) liability, and how to reduce or completely negate it.

Inheritance tax intake is expected to rise sharply over the next five years, according to the latest forecast update from the Office for Budget Responsibility (OBR). In its ‘Economic and fiscal outlook’, the amount of inheritance tax forecast for collection is expected to top £6.2 billion by 2021-2022

Latest Inheritance Tax revenues forecast in £ billions

2015-16           2016-17           2017-18           2018-19           2019-20           2020-21           2021-22

£4.7                  £4.7                  £5.0                  £5.2                  £5.5                 £5.8                  £6.2

Source: Office for Budget Responsibility, Economic and Fiscal Outlook, March 2017

Commonly referred to as ‘Death Tax’, this is considered by many to be a voluntary tax, with careful planning it can be avoided by many.

At the end of 2015-2016, the market value of Adult Individual Savings Accounts (ISA) holdings was £518 billion, split between ‘Cash ISAs’ (52%) and ‘Stocks and Shares ISAs’ (48%).  Six million of the UKs 23 million ISA holders are aged over 65 years old.  There are also more than 500,000 people with ISAs valued at £100,000 or more, these could very well be at risk from the ‘Death Tax’ because the ISAs will be treated as part of their taxable estate, many incorrectly assume their ISAs fall outside the IHT calculations.

One way of approaching potential IHT liabilities, is investing in Business Property Relief (BPR)qualifying investments. Shares in BPR qualifying investments become exempt from IHT after just being held for 2 years, provided the shares are still held at the time of death.

Since 1996, estates have been able to claim 100% BPR on minority investments made in certain trading companies. ISA rules were changed in 2013, as a result ISAs can now be invested BPR qualifying companies and therefore benefit from IHT exemption as well as tax-free income and growth.

If you are concerned or irritated by the potential payment for IHT, then perhaps looking at ISAs into BPRs is an option. There are various other strategies to available, and seeking professional advice on these matters is vital.

Lee Tomkins BSc(Hons), DipPFS, Certs CII(MP&ER), Cert CII (Life and Pensions)
Independent Financial Adviser

N.B. This article should not be considered investment advice or an offer of any product for sale, it contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular, strategy or investment product. Information contained has been obtained from sources believed to be reliable, but is not guaranteed. Past performance is not an indicator of future results.

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Mortgage Services / Paul - Bristol
Through this whole process it's been David and team, that have been the only ones on the ball and working efficiently to answer my questions and deal with my case. When other parties were delaying proceedings or changing things, they were always first to keep in touch and sort it out. Thank you for your service. 
VF - Devon
Lee is easy to talk to and very confident and knowledgeable which makes you feel at ease.  He explains things in a way which is not condescending, but is precise and easy to understand. I was slightly nervous about re-mortgaging my property in order to raise capital for my daughter but after an unhurried, relaxed meeting with Lee I felt much happier about the whole process. I would have no hesitation in recommending Lee to anyone seeking financial advice and will be returning to him myself for some investment help in the future. What could they have done better?  Nothing, he's already brilliant! Maybe some chocolate biscuits on the desk.
VF - Somerset
I first sought financial advice from Lee about 15 years ago, advice which I stupidly ignored at the time. Lesson learned.. Over the years I have benefitted greatly from Lee's knowledge and experience, along with his skill of ensuring that whether it is in relation to mortgages, insurance, pensions or savings, I consider all the options open to me.  Lee is professional, approachable, hugely experienced and ensures that he he keeps up to date on market developments and fully informed about what products / services are available.
VF - Somerset
I inherited a substantial sum of money and needed some advice as to how to make the most of it.  Simon was very friendly and down to earth, simplifying the monetary jargon so that I could understand exactly what was going on and therefore make an informed decision. Simon was a wonderful advisor, who answered all of my questions (no matter how silly) and made me feel in control of my finances again. He is always available to answer any queries and I would highly recommend him to anyone.
VF - Somerset
Simon is extremely knowledgeable in all areas of financial planning and is always happy to explain things further if his clients are unsure. He is professional in every aspect, from his face-to-face contact to completion of paperwork and I cannot recommend him highly enough. I would have every confidence in placing any of my financial business with him. Simon takes the time to get to know clients and then provides suitable advice. I am very happy to have Simon guiding me through the world of financial issues and would happily recommend him.
Avril, Devon
I am a pensioner and when I first saw Neil I was extremely worried about how to keep my savings safe but also have a good return from my investments.  Neil was very kind and explained everything in detail to me for the best way to go forward with my money. I have now been with him for three years and my portfolio has grown and I feel confident with all the advice he has given and the investments that he has done for me, I know that if I have any worries I can contact him and he will always get back to me immediately, I now feel confident with my investments and all the advice that Neil has given me and I am enjoying my retirement. I am extremely satisfied with everything Neil has done.
Donna Noll
Simon, is so easy to talk with and he ensures you understand completely his suggestions to help you create more wealth! I bought my buy to let property without stress and i can honestly say that was down to Simon's advice, help, support and knowledge. I could not recommend Simon highly enough.
Nick Girone- Maddocks, Gibbins Richards Estate Agents, Wellington
Many thanks to David Blair and all at Blackdown Financial for their inventive and pro-active assistance in a recent tricky transaction. With David Blair the ball is kept FIRMLY in the air, Thank you!
Euan and Jane Barker, Wellington
We have been clients of Blackdown Financial for over 20 years.  During that time we have found them always approachable and willing to take the time to understand our situation, viewpoint on risk and what we were looking to do for short, medium and long term financial planning.  They have then advised us on appropriate decisions and investments.  This advice always appears well considered and accurate, and we have generally followed it on that basis, almost always with good results (so far!). The feedback and ideas presented by Blackdown always have some relevance to our situation.  If we are uncomfortable with some or feel them too risky they have never pushed them hard at us so decisions on which direction/proposals to follow always feel well suited to us. At times some of the advice given by Blackdown is clearly not going to benefit them in the short-medium term which has led us to build a better level of trust in them.   We hope to continue using Blackdown over the next 10-15 years as we continue to plan towards retirement.
Leigh, Taunton
My wife and I were 1st time buyers. David and his colleagues removed a lot of stress and provided much needed experience to the process. He was able to provide insight and advice for all areas of house buying, and we often used him as a sounding board. David was always honest with regards to his fees/commission and also not afraid to dissuade us from ideas that he didn't believe were the best option - although we never felt pressurised or subject to a hard sell. David was able to find mortgage deals that we were not, with better rates, and explain the pros and cons of each option. He was always careful to make sure we understood what he was telling us, without using blinding us with numbers and technical language. David also ensured that we were able to afford the options in the long term, exploring potential changes to income and circumstances that would affect us. When we had submitted the paperwork for the mortgage and subsequent life insurance/income protection, David and his team were invaluable for chasing the other parties, solving issues (of which there were quite a few!) and generally took a large portion of stress away from us. I would thoroughly recommend using David and his company.