# Business Relief: The six golden rules Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-07-07 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Maximise Investments with Business Relief Solutions Meta Description: Discover how Estate Planning and Business Relief solutions at Ingenious can maximise wealth for beneficiaries while minimising costs and understanding all URL: https://financedigest.com/business-relief-the-six-golden-ruleshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/dsc6178-2317-1736838209168-compressed.jpg) _By **Matt Dickens,** Senior Business Development Director at Ingenious_ At Ingenious, we consider estate planning to be just one part of a comprehensive later life plan. Business Relief (BR) solutions should be approached as an investment [service in their own right and not solely considered as a tax](https://www.financedigest.com/adding-revenue-through-rd-tax-relief-service-2.html "Adding Revenue through R&D Tax Relief Service") solution. Advisers should remember not to let the, “tax tail wag the investment dog.” When it comes to undertaking BR due diligence, we have six golden [rules advisers can use to position their clients for the best possible outcomes for both estate planning](https://www.financedigest.com/plan-c-uk-pm-johnson-not-planning-further-covid-rules-despite-omicron-growth.html "Plan C? UK PM Johnson not planning further COVID rules despite Omicron growth") and later life. 1. **Strong Performance is crucial** [Estate planning is about leaving the most to our chosen loved ones as a legacy](https://www.financedigest.com/why-a-will-is-not-enough-estate-planning-and-your-legacy.html "Why a Will Is Not Enough: Estate Planning and Your Legacy"). Individuals should therefore plan to [maximise the wealth](https://www.financedigest.com/brexit-why-investors-must-now-think-global-to-maximise-and-protect-wealth.html "BREXIT: WHY INVESTORS MUST NOW ‘THINK GLOBAL’ TO MAXIMISE AND PROTECT WEALTH") they will have to ultimately pass on to their beneficiaries, whilst considering any potential needs, such as home improvements or travel, as well as the possibility of needing to pay for care one day. As well as helping to meet any needs, strong [growth is also a key](https://www.financedigest.com/emptied-canopy-market-industry-outlook-growth-prospects-and-key-opportunities.html "Emptied Canopy Market: Industry Outlook, Growth Prospects and Key Opportunities") weapon to counter the negative forces of inflation, so seeking a steady, long term, meaningful return is always crucial. 2. **[Keep costs](https://www.financedigest.com/how-analytics-can-keep-your-cost-base-low-plus-deliver-improved-cx.html "How Analytics Can Keep Your Cost Base Low Plus Deliver Improved CX") to a minimum** Costs are another guaranteed negative [force on investment](https://www.financedigest.com/analysis-uk-crisis-forces-off-kilter-businesses-to-halt-investment.html "Analysis-UK crisis forces ‘off kilter’ businesses to halt investment") returns and so should be minimised. [Lower costs](https://www.financedigest.com/just-eat-delivers-q3-profit-as-cost-cuts-outweigh-lower-order-volumes.html "Just Eat delivers Q3 profit as cost cuts outweigh lower order volumes") can also reduce risk. A manager with lower fees doesn’t need to chase extra risk to cover these [costs before delivering on their specified or target](https://www.financedigest.com/dutch-telecom-kpn-locks-in-2023-targets-helped-by-cost-controls.html "Dutch telecom KPN locks in 2023 targets helped by cost controls") return, which is calculated once fees have been deducted. In addition, high costs can indicate the [investment is not delivering best value](https://www.financedigest.com/creating-sustainable-value-through-responsible-investment.html "Creating sustainable value through responsible investment") to the investor, but that instead the manager is taking the significant benefit. 3. **Understand all [factors affecting](https://www.financedigest.com/home-equity-release-how-to-get-the-best-valuation-and-what-factors-can-affect-it.html "Home Equity Release: How to Get the Best Valuation and What Factors Can Affect it?") the trading activity** BR [investments are investments into underlying portfolio](https://www.financedigest.com/heineken-to-invest-300-million-in-brazil-to-expand-premium-beer-portfolio.html "Heineken to invest 0 million in Brazil to expand premium beer portfolio") companies, which can carry out a wide variety of BR trading activities. These [companies and the markets](https://www.financedigest.com/generic-oncology-drugs-market-2021-global-leading-companies-analysis-revenue-trends-and-forecasts-2027.html "Generic Oncology Drugs Market 2021 Global Leading Companies Analysis, Revenue, Trends and Forecasts 2027") in which they operate should be clearly understood by the adviser. BR companies tend to either own and operate [assets or carry out a lending trade](https://www.financedigest.com/rambus-unveils-vaultify-trade-for-secure-transaction-and-storage-of-crypto-assets-on-blockchain.html "Rambus Unveils Vaultify Trade for Secure Transaction and Storage of Crypto Assets on Blockchain"). Some do both. Broadly speaking, those with a [higher proportion of their portfolio in physical assets will see](https://www.financedigest.com/daimler-truck-sees-higher-returns-as-supply-chains-demand-improve.html "Daimler Truck sees higher returns as supply chains, demand improve") their fortunes depend on the performance of those assets and will fluctuate on the fundamentals of the sector. Those more focused on lending should see more steady returns as they will have lent money at normally fixed [rates and any market fluctuations should have less impact](https://www.financedigest.com/russia-could-hike-rates-in-2023-if-inflation-risks-have-big-impact-cenbank.html "Russia could hike rates in 2023 if inflation risks have big impact -cenbank"). The associated risks of both routes, including their sector, liquidity and valuation risks, vary widely between strategies. This should all be considered in the context of the investor. Is the trading strategy and associated risk appropriate for their profile? 4. **Know what it’s worth** When making any investment, it is crucial to purchase the asset at the correct price, taking into consideration the [potential future sale](https://www.financedigest.com/zara-owner-inditexs-first-half-sales-surge-ahead-of-potential-slowdown.html "Zara owner Inditex’s first-half sales surge ahead of potential slowdown") value. For BR, there are two main considerations. The first is being aware of the methodology undertaken by the [manager when calculating the Net Asset](https://www.financedigest.com/asset-managers-on-alert-after-whatsapp-crackdown-on-banks.html "Asset managers on alert after ‘WhatsApp’ crackdown on banks") Value (NAV) of the service. Owned assets tend to be more complex to value, are reliant or many variable assumptions and have more potential for subjectivity. Valuations that appear not in line with [current market](https://www.financedigest.com/dry-ice-market-2015-outlook-current-and-future-industry-landscape-analysis-2025.html "Dry Ice Market 2015 Outlook, Current and Future Industry Landscape Analysis 2025") fundamentals or with similar services, should be assessed carefully. [Lending services](https://www.financedigest.com/equiniti-credit-services-investigates-consumer-attitudes-to-lending-in-new-report.html "Equiniti Credit Services investigates consumer attitudes to lending in new report") tend to be more transparent and less subjective to value. The second consideration is whether the share [price for incoming investors is trading](https://www.financedigest.com/belgium-supports-energy-price-caps-suspending-trading-in-eu-power-crunch.html "Belgium supports energy price caps, suspending trading in EU power crunch") at a premium to the audited NAV. If so, this should be reviewed, as it [means the investor](https://www.financedigest.com/what-does-shells-powershop-acquisition-mean-for-aussie-investors.html "What Does Shell’s Powershop Acquisition Mean for Aussie Investors?") is taking on extra ‘valuation risk.’ 5. **Ensure tax-efficient access** [Investors in later life do not normally wish to give up control](https://www.financedigest.com/cryptoverse-bitcoin-investors-take-control.html "Cryptoverse: Bitcoin investors take control") and flexibility of their wealth to achieve estate planning or investment objectives. It can be an uncertain [time and being able to adapt](https://www.financedigest.com/why-its-time-to-adapt-to-the-virtual-world-how-to-master-online-negotiations.html "Why it’s time to adapt to the virtual world: how to master online negotiations") is key. But any access to this capital should be [managed in a tax-efficient way](https://www.financedigest.com/5-practical-ways-to-manage-your-business-expenses.html "5 Practical Ways To Manage Your Business Expenses"), considering Capital Gains Tax (CGT). One way to do this is through investing with a [Manager that only offers](https://www.financedigest.com/carrefour-management-increases-offer-in-wage-talks-with-unions.html "Carrefour management increases offer in wage talks with unions") newly issued shares, rather than using matched bargains. Such shares, after a three-year holding period, should qualify for Investors’ Relief, capping CGT on any disposal at 10%, rather than the potentially higher 20%. 6. **Seek maximum utility** One in three people aged 85+ require some form of care [\[1\]](https://mail.google.com/mail/u/6/#m_2090452041896641139__ftn1). As well as making the most of any investment, later life planning should seek to provide further utility, for instance, in the [preparation for potential care needs](https://www.financedigest.com/what-banks-need-to-prepare-for-eba-pillar3-disclosure-of-esg-risks.html "What Banks Need to Prepare for EBA Pillar3 Disclosure of ESG Risks"). By considering the potential [cost of care and practically](https://www.financedigest.com/preventing-poor-esg-practices-from-costing-you-investors.html "Preventing poor ESG practices from costing you investors") pre-planning to meet any care needs, the investor will be equipped to make the right choices should this issue arise. If advisers want their [clients to get the most from any BR service](https://www.financedigest.com/bny-mellon-strengthens-support-for-treasury-services-clients-in-germany-with-appointment-of-gungor-taner.html "BNY MELLON STRENGTHENS SUPPORT FOR TREASURY SERVICES CLIENTS IN GERMANY WITH APPOINTMENT OF GÜNGÖR TANER") they recommend, the use of these rules should help ensure the optimal outcomes. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---