Are Property Investors interested in ways to reduce IHT?

I’ve raised this question is that it’s important to me.

Am I in the minority though?

I’ve insured my life and written the policy into trust to pay IHT without attracting further IHT.  However, this is going to get more and more expensive as I get older and my wealth grows.  I’ve also investigated various other schemes, most of which involve transferring the properties into a trust.  This is fraught with problems including CGT, IHT, stamp duty and financing.

I’m a member of a group of professionals called the Financial Strategies Group.  This includes a large IFA firm, a Will writing company and a Solicitors firm with a large private clients department.

The group believes they have found a way for property investors to escape IHT on every property they own, regardless of how much it increases in value by.  The scheme and the associated paperwork is now in the process of being settled by Council.

It’s not a simple process as it involves changing the structure of ownership and lot’s of paperwork to jump through the loopholes in anti avoidance legislation. 

I was invited into the group for two reasons.  1) I am a landlord and 2) I can help with distribution if /when the scheme is proven to be effective.  The group were very keen to ensure that the scheme ticks all the boxes for the vast majority of landlords, not just the super-rich who have properties with no mortgages.  Therefore, I’ve made it very clear that the scheme must not prevent landlords from selling and must not involve changing the structure of ownership to the extent that future refinancing ability is affected.

I can’t release details of the scheme structure until it has been settled by Council but a full explanatory document will be produced in due course.

In the meantime, my question is whether landlords are sufficiently concerned about IHT that they would pay up to £2,500 per property to avoid it?

By the way, it’s not our product. I wish it was though, I reckon they could be onto a winner. For what it’s worth, I think it’s pricey, but then again, so is IHT. If the scheme is settled by Council I plan to use it every time I refinance one of my properties.  That way the conveyancing will all be wrapped up in the £2,500 fee. I’ve also asked them to consider bulk discount. For a landlord with just 10 properties the fee of £25,000 is a big pill to swallow. 100+ properties and the numbers look very scary indeed.

I look forward to receiving your responses.

Regards

Mark Alexander.

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