Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more.
The IHT problem represents a £9.1 billion threat to capital. It's no longer a financial nuance; it is a surging tax that poses a direct threat to the accumulated wealth of sophisticated investors and their families.
This financial crisis is compounded by the announcement of a key legislative change approaching in April 2026. From this date, a £1m cap will be imposed on IHT exemption via Business Relief, and the IHT relief available on AIM shares will also fall to 50%
Inheritance tax, latest forecast. Showing IHT as % of GDP over time.
The IHT liability is expanding rapidly, fuelled by frozen tax-free thresholds and rising asset values. For investors, understanding the scale of this tax is the first step in successful planning:
The key takeaway: the average tax bill of £212,000 is a direct charge against the wealth you intend to pass on, making proactive planning a financial necessity, not an option.
Traditional IHT solutions: why the seven-year wait fails you
Savvy investors know that the first steps in IHT planning involve utilising tax bands and small allowances. However, these are merely foundational steps that fail to solve the scale and speed issues inherent in larger estates.
Foundational steps (bands and exemptions)
Nil-rate band (£325,000): Every UK resident receives this basic tax-free allowance, which can be doubled to £650,000 for married couples/civil partners by transferring any unused allowance.
Residence nil-rate band (£175,000): This additional allowance is available if you leave your main residence to direct descendants (children, grandchildren), potentially increasing the allowance to £500,000 per person (£1 million for couples). Crucially, this is tapered away for estates over £2 million.
The problem of the seven-year rule
Annual and exempted gifts: You can gift £3,000 annually (with a one-year carry-forward) and make small gifts of up to £250 to unlimited recipients. Gifts made to children (£5,000), grandchildren (£2,500), or others (£1,000) upon marriage are also tax-exempt.
The greatest compromise for investors is the reliance on the seven-year rule for moving large capital:
Larger gifts (Potentially Exempt Transfers): Gifts exceeding annual allowances only become completely tax-free if the donor survives seven years after making them.
The taper relief trap: If the donor dies within seven years, IHT is charged at a tapered rate. For instance, gifts made between three and four years before death receive only a 20% tax reduction (meaning tax is charged at 32%), while those made between five and six years receive a 60% reduction (tax charged at 16%). This introduces unacceptable risk and uncertainty.
Trust structures: These can help remove assets, but they are highly complex, require ongoing professional advice, and growth may be periodically taxed. Placing assets like life insurance policies into trust is often recommended to exclude them from the estate.
Charitable giving: Leaving 10% or more of your taxable estate to charity can reduce the IHT rate on the remainder from 40% to 36%. While laudable, this is a limited tax planning tool.
The verdict is clear: Traditional methods are either low-impact, complex, or rely on a risky seven-year survival window. You need an accelerated, capital-controlled solution.
This is the strategic advantage that successful investors utilise. EIS and SEIS assets currently achieve 100% IHT exemption by qualifying for Business Relief (BR), securing capital significantly faster than traditional methods.
Crucial Warning: From April 2026, the 100% IHT relief on BR-qualifying assets is expected to be capped at £1 million per person. This makes immediate action to protect assets over that threshold critically urgent.
IHT exemption criteria: the two-year window
For full IHT exemption, EIS/SEIS shares must be:
Held for a minimum of two years.
Held at the time of death.
This two-year period is the key differentiator, providing the quickest accelerated timeline for securing IHT protection (refer to HMRC guidance on BR).
Dual tax relief stack: maximising immediate benefit
The BR benefit is compounded by immediate tax advantages, reinforcing the financial case for the investment.
The strategy: the data-driven defence of capital
For the IHT-exempt asset to hold its value, investors must effectively mitigate the high risk of early-stage venture capital. This requires moving beyond intuition.
The power law and diversification: the mathematical edge
The UK startup market follows a Power Law distribution. This means that a small minority of companies are responsible for the lions share of returns.
The challenge: Concentrated portfolios (8-10 deals) carry a high risk of losing capital.
The solution: Deep diversification (into 30+ or 50+ deals) is mathematically proven to increase the expected average return and defend the capital's value (a finding corroborated by external research on venture portfolio size).
The mathematical necessity is clear: deep diversification minimises the risk of capital loss and increases the expected average return, making the underlying IHT asset resilient.
The risk of capital loss falls dramatically as the number of companies in your portfolio increases:
The Access EIS Fund is engineered to systematically implement the required mathematical strategy for IHT planning by addressing two core challenges: diversification and access to quality deals.
Co-investing with the UK’s top business angels
Creating diversified portfolios of at least 30 investments
Offering EIS tax relief
SEIS & legacy: maximising impact and returns
SEIS offers a powerful avenue for meeting the dual desire of investors: accelerated IHT planning and a fund aligned with leaving a positive, impactful legacy.
Capital deployment: property & gains deferral
This strategy is highly useful for liquidating non-BR assets:
Capital gains deferral (EIS): Defer CGT liability by reinvesting capital gains into EIS. This immediately moves capital into a growth-focused, IHT-exempt asset.
The Carbon13 SEIS Fund provides focused exposure to ventures developing solutions for the climate crisis. This allows investors to:
Accelerate IHT planning: Leverage the highest upfront tax relief (50% Income Tax Relief) to establish IHT-exempt capital quickly.
Invest in impact: Directly fund companies dedicated to global challenges, transforming the IHT asset into a lasting, positive legacy.
Action plan: don’t wait to start the clock
When it comes to your estate the most critical financial decision you can make is to ensure the two-year holding period for Business Relief (BR) is secured as sooner rather than later.
Final checklist for IHT and legacy
Start the clock now: Commit capital immediately, as the two-year BR holding period begins the day you invest, minimising the time your assets are unprotected.
Stop relying on the 7-year rule: Leverage EIS/SEIS to secure 100% IHT exemption in just two years, significantly beating the seven-year gifting clock.
Maximise upfront relief (SEIS): Use the higher 50% income tax relief offered by SEIS on investments up to £200,000 for maximum immediate tax efficiency.
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