The ProVen Estate Planning Service (PEPS) works with financial planners to offer their clients access to investments that qualify for inheritance tax relief.

Below we explain more about our service and why estate planning is a key focus of ProVen.

What is estate planning?

Estate planning involves preparing a plan for how you want your assets to be allocated to your beneficiaries upon death.

Estate planning is often undertaken by financial planners, who will focus on your needs and objectives to maximise the amount you pass on to your loved ones.

A financial planner will also ensure all tax allowances are being utilised where appropriate. This could include ISAs, dividend allowances, capital gains tax allowances, and so on.

An allowance that has been given increasing prominence over the past few years is business relief (BR), which can help reduce inheritance tax (IHT).

Many people only consider estate planning later in life and so may be looking for options for mitigating inheritance tax that don’t involve a long timeframe. This is where business relief comes in, as you only have to hold an investment for two years before it potentially qualifies for business relief, which can provide 100 per cent relief from IHT.

How can estate planning complement your investment portfolio?

As well as understanding the client’s need for income and for liquidity, a financial planner will help a client understand where they don't need liquidity – and where they could potentially get greater returns by taking a longer term perspective on investments.

For many retired people, it can be difficult to balance investing with long-term financial planning. Investing can be risky, but at the same time investing is crucial if you live to an old age and do not want the value of your savings falling as a result of inflation.

For people in their 70s, 80s, and beyond who are looking to reduce the inheritance tax burden for their loved ones, the idea of making gifts in their lifetime is not always appealing because if they don’t live for seven years after making that gift, the value of their estate may be reduced.

In this case, financial planners may consider quicker routes to claim inheritance tax relief and this is why they may work with PEPS because we have access to investments likely to qualify business relief. These investments will qualify for 100 per cent IHT relief after two years, providing the qualifying criteria is met.

Why invest in PEPS?

Confidence in your investments is critical for people who have retired, because they have stopped earning and they need confidence that their finances will be stable going forward.

Therefore, they want investment planning they can understand and trust. At PEPS, we are proud to have a track record of offering consistent annual returns of 4-5 per cent while at the same time boosting the value of the capital sum invested.

We are also one of a few estate planning services that gives the option of a dividend income. It means investors can make the most of the £2,000 annual dividend allowance per person. They can use these dividend payments to supplement their income, reinvest elsewhere or give the money away to family members (individuals are allowed to make gifts from regular income exempt from IHT).

So when investing in PEPS, investors have the option of choosing the option of focusing on income or capital growth – or both.

Find out more on why investors choose an estate planning service such as PEPS.

How is investor confidence at the moment?

Speaking to the financial advisers we work with, they have generally seen increased investment anxiety due to the ongoing conflict in Ukraine that has contributed to rising gas prices and higher inflation.

There has been a lot more focus on equities due to record low interest rates over the past decade. But now with interest rates rising and increased stock market volatility, financial planners are sourcing investment areas where there is more stability. The aim is for returns to be sustainable, rather than cyclical, and ideally you want an investment that is on an upward curve.

Whether investing through an ISA or for IHT relief, financial planners are focusing on mitigating inflation.

This is where PEPS can help, as our priority is to invest in companies that deliver reliable returns and are ripe for growth and development.

The investment focus of PEPS

PEPS is a discretionary investment platform. An investment into our service is allocated to one or more of our three trading companies. We have two core investment strategies: solar and lending.

Investors can decide whether they want to focus on one area or invest in both, and to decide whether they want to focus on dividend income or capital growth.

Our solar strategy focuses on the UK solar industry, which is benefitting from demand for renewable energy continuing to rise due to global commitments to tackle climate change. The trading companies backed through the solar strategy generate stable income through Government-backed, RPI-linked revenue streams that provide a potential hedge against inflation.

Our other core focus is lending to SMEs. This strategy aims to support companies with tangible assets, strong cash flows and dependable revenue streams. The interest we receive on the loans helps us deliver stable income to shareholders.

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The ProVen Estate Planning Service is managed by transatlantic venture capital firm Beringea. Find out more by visiting the ProVen Estate Planning Service section of our website.

This article is for UK residents interested in finding out more about Business Relief and the ProVen Estate Planning Service strategies. UK tax rules and regulations are subject to change, and such changes may be retrospective. Your ability to obtain tax reliefs will depend on your personal circumstances. It is not our intention to offer legal, tax or investment advice, and we always recommend that investors seek professional advice that can take account of their personal circumstances before making any investment or estate planning decisions. An investment in the ProVen Estate Planning Service should be considered high risk and past performance is not a good indicator of future results.

Important notice: issued by Beringea LLP of Charter House, 55 Drury Lane, London, England WC2B 5SQ, registered in England & Wales number OC342919 and authorised and regulated by the Financial Conduct Authority, number 496358.