B L AC K F I N C H I N V E S T M E N T S LT D

TA X P L A N N I N G I N T H E P O S T B R E X I T WO R L D

P R E S E N T E D B Y

J E R RY P R I C E

D i s t r i b u t i o n D i r e c t o r

B l a c k f i n c h I n v e s t m e n t s L i m i t e d

I M P O R T A N T I N F O R M A T I O N

This presentation is directed at investment

professionals only, and should not be relied

upon by any other person. The investments

referred to in this presentation may not be

suitable for all investors and we recommend

that you seek independent advice before

making a decision. Nothing in this

presentation should be regarded as

constituting legal, taxation, investment, or

other advice.

Authorised and regulated by the Financial Conduct Authority

This document is not a personal recommendation. No

decision to invest (or not to invest) should be based on this

document alone, and no liability is accepted by Blackfinch

for any direct or indirect or consequential losses arising from

a decision to act or not to act based on this presentation.

The statements and opinions set out in this presentation are

made as of the date of presentation (June 2015), and may

not be applicable thereafter. Opinions are based on our

analysis of data that we believe to be objective and reliable;

however we accept no liability in respect of its completeness

and accuracy (except where the incompleteness or

inaccuracy is caused by gross negligence or fraud). Past

performance should not be regarded as an indication of

future results.

Rates of tax, tax benefits and allowances are based on

current legislation and HMRC practice and depend on

personal circumstances. These may change and are not

guaranteed.

V A L U E S A N D R E T U R N S

No guarantee can be provided on

investment performance and the growth

generated.

L I Q U I D I T Y

Investments in unquoted companies and

are not readily realisable. Shares must be

held for at least 2 years at the date of

death to achieve BR qualification. We

should be able to redeem an investment

within 3-6 months but this could take

longer for unusually large withdrawals.

T A X A T I O N

Any changes to the taxation environment

or HMRC practice may affect investment

returns.

B U S I N E S S R E L I E F

We will invest in companies which we

reasonably believe qualify for Business

Relief, but we can give no commitment

that any such investment will remain a

qualifying investment at all times or in the

future. Verification from an independent

accountancy firm on each investment

sector is always obtained prior to investing.

T O D A Y S A G E N D A

• Inheritance Tax Planning using Business Property Relief

• Income Tax and Capital Gains Tax Planning using Enterprise Investment Schemes.

• Tax Planning for Business Owners

T H E G R O W I N G M A R K E T

5,000 more estates will be liable for

IHT by 2018

In 2012 2% of households fell into

IHT mitigation by 2018 10% of

households will fall into IHT mitigation

2016/17 490,100 deaths will be subject to

IHT by 2018/19 545,000 deaths will be

subject to IHT

HMRC are still receiving record

receipts from IHT

July 2015 figures show that £3.825 bn

received an increase of 11.9% since

2013/14 (source HMRC IHT statistics)

Receipts up to Feb 2016 show an

increase of 21.6% compared to the

same period last year.

95% of IHT mitigation is invested in

unlisted stock in comparison to AIM stock

Due to longer life spans demand for more

flexibility around IHT mitigation

OPPORTUNITIES AND THREATS WITH REGARDS TO

BREXIT VOTE Inheritance Tax Planning

Opportunities

• Control

• Accessibility

• Uncorrelated growth

potential

• Simplicity

• Transparency

Threats

• Regulatory change

• Scaremongering

• Property price downturn

• Aggressive Anti-Avoidance

Schemes

A POST BREXIT CERTAINTY

• If you think you have an Inheritance Tax problem and nothing is done then your estate will pay 40% IHT to the HMRC

A D V A N T A G E S A N D D I S A D V A N T A G E S O F B P R

A D V A N T A G E S

— Relief after 2 years of holding asset

— Client keeps control and access

— Easy to understand in comparison to other

types of mitigation

— No requirement for medical reports

or examinations

— No age limits

— Powers of Attorney can instruct on behalf of clients

— Clients can take regular or ad-hoc withdrawals

D I S A D V A N T A G E S

— Capital invested is at risk

— HMRC death test

— Changes to rules and legislation

— Liquidity may be limited

— Non-regulated investment – but Non-UCIS

EIS encourage investment into smaller, growing UK companies by offering significant tax reliefs and

deferrals in exchange for a level of risk.

With the potential for the loss of EU subsidies the need for UK businesses to have investment will

only increase.

EIS (and VCT) will provide such investment and as such Blackfinch feel the demand for such tax

efficient vehicles will increase.

The skill in EIS providers will be to choose assets that can mitigate the uncertainties of a post

BREXIT world with a objective of providing capital preservation and growth.

The changes in pension legislation have seen an increase in EIS investments

E n t e r p r i s e I n v e s t m e n t S c h e m e s ( E I S )

M i t i g a t i n g I n c o m e Ta x a n d C a p i t a l G a i n s Ta x Po s t B R E X I T

B A C K G R O U N D T O T H E E I S M A R K E T

Early 1980’s

introduction of business

expansion schemes

1994 Enterprise

Investment Scheme

replace Business

Expansion Scheme

Today EIS recognised as

key growth policy

Statutory relief to

encourage private

investment into smaller

British businesses

U N D E R LY I N G A S S E T S

Industry and

Infrastructure

Food and Drink

Technology

Transport

General Enterprise

Media and

Entertainment

T A X B E N E F I T S O F E I S

Minimum hold has to

be 3 years

30% upfront income

tax relief

100% IHT relief

after 2 years

100% CGT relief

on any gains

CGT deferral relief

Losses can be offset

against either income

tax or capital gains tax

Maximum investment

in any given tax year is

£1,000,000

Carry back is available

to the previous tax

year only

BLACKFINCH EIS PORTFOLIOS

Media

• Film Score Music

• TV Distribution

Asset Focused Construction

• Residential

• Nursing and Care Homes

• Retirement Villages

• Crematoria

G R O W T H I N E I S S A L E S

More emphasis on growth EIS following EU state aid rules

Limits on Pension contributions should drive more business to EIS

Clients may look for tax efficient drawdown on pensions

Because of renewable energy being withdrawn new underlying assets are being sought

Threat

HMRC are now looking at businesses that have too much

cash on deposit. On death the cash on deposit will form

part of the business owners estate and IHT will be paid

by the beneficiaries.

Opportunity

The cash on deposit can be used to form an alternative

trading entity which will attract Business Property Relief

and provide returns.

Tax P lann ing for Bus iness Owners

T H A N K Y O U