Wealth manager and Financial Planner Kingswood has launched an AIM IHT & ISA Portfolio Service to help clients with estate planning.

The discretionary investment management service provides income and capital growth solutions in a structure designed to mitigate inheritance tax liability after two years. 

The firm says the service is being offered in response to clients’ “growing inheritance tax needs.”

Kingswood said that over the past 20 years, many individuals had invested in ISAs because of their tax benefits, without considering the IHT liability on death.

More than six million of the UK’s 22m ISA investors are now over 65 years old and are faced with the dilemma of either keeping the money in the ISA despite the potential IHT liability or transferring it from an ISA into an inheritance tax planning vehicle. This would cut any IHT liability but could also mean losing control of assets and/or waiting several years before the IHT liability is mitigated, Kingswood said.

Latest HMRC data showed that IHT receipts from April 2022 to December 2022 reached £5.3bn, a £700m rise compared to the same period a year earlier. 

The Kingswood AIM IHT & ISA Portfolio Service offers a package whereby individuals can keep all the tax benefits of their ISA and, after two years,  qualify for 100% IHT relief on their savings.

With investments in companies listed on the Alternative Investment Market (AIM) the service also means that clients can retain access and control of their investments at all times, Kingswood said. 

Investors will have a portfolio of 25 to 40 companies which have been independently assessed for their likely suitability for Business Relief (BR). BR allows an unlimited amount to be invested at any time and typically becomes IHT-effective after just two years.

Kingswood says investors benefit from retaining full control and access to their investment should it be needed in future for any purpose, rather than having to gift it away forever. The portfolio is spread across a variety of investment sectors to provide diversification. 

The offering sits within the relaunched Kingswood Personal: a bespoke investment management solution designed to provide clients with active and ongoing management of their portfolio depending on their risk appetite and personal investment goals and preferences. The service was bolstered following the acquisition of IBOSS Asset Management Limited in November 2021, which added to Kingswood’s existing research offering with investment management expertise to build tailored portfolios.  

Paul Surguy, managing director – head of investment management & proposition at Kingswood, said: “The launch of this new offering is a reflection of our client-centric approach. We 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 targets portfolio growth via diversified investments in AIM-listed firms.” 

Kingswood is itself an AIM-listed wealth manager with £10 billion of assets under advice and management. It has acquired numerous UK and US Financial Planning and Wealth Management firms in recent years.