Haha AL please feel free to join in the 'Entente Cordiale'.
Yes Adam, I remember the split caps from c 2000/2001... they came a cropper then as I recall. The trouble with all these shenanigans is that the tax man can simply pick up his or her pen and score a line across the scheme. No easy answers I'm afraid. But thank heavens its a problem we are in a position currently to worry about. We should never fail to be grateful for that... and much else besides.
I'd forgotten about the AIM exemptions not applying to porperty/investment companies ... still it was just an idea in passing really as the cost and the hassle of listing on AIM is not insubstantial.
Back in the 80's I got my father into 'SPLIT' investment companies. Essentially these were companies set up with a preset life span and two classes of shares. One class had all the income, the other had all the capital gains. It was an oddity but suited my father rather well as he needed the income, whereas most middle aged investors wanted the capital gain rather than income.
I wondered if I couldn't do something similar with us oldies keeping all the income shares, and our kids having the capital growth shares. If the windup date is sufficently short term then the value of the income shares is small and attracts little IHT. In the meantime the capital shares could be vested many years before D-Day and so avoid the PET problems.
Of course the devil is in the detail and I'd both need to research it carefully and seek good knowledge/advice.
Its a kind off 'must do something about it at some point' issue for us at the moment. You're Investment company idea sounds very iffy. And unless I'm mistaken, I think AIM companies that focus on Real Estate or Investments are not considered eligible for IHT relief. I think you need to take professional advice on it. There is a scheme I know which Insurance Companies offer which does the job. You can withdraw 5% per annum from it yourself, but basically you are waving your scheme assets goodbye during your lifetime, but your beneficiaries get it after you.
IHT ... it's a mess isn't it? Kind of like a train wreck that you can see coming but there's not much you can do to stop it happening. I guess the most important thing that I/we've done is to teach each of our three kids how to invest and how to handle their money. Now I know that doesn't solve the IHT problem but it's very satisfying to see your kids making money out of what they've set aside from their own labours -- they are well on their way to having their own IHT problems to deal with.
Basically for ourselves the best solution is to give the stuff away a good time before we die. Trouble is whilst I've constructed an investment machine that basically protects capital and provides a good inflation linked income, at the end there will be a significant investment pool that will drop into the estate.
I/we are thinking and looking at forming an investment company with two parents and three kids as the shareholders ... if we created some preference shares then that would deal with the income side of things, and it might reduce the investment pool to 40% of what it would have been. But would HMRC view it as a sham?
The AIM exemption is interesting, but long term wise I'm reluctant to have a very large chunk of cash tied up in that market. It can be very profitable, but then it can be very much the other way. There is always the idea of putting the investment company itself onto AIM!
Thanks for reminding me of the IHT question ... it's something that I'd forgotten about over the last few months and I really should have a long-term strategy for it.
Thanks for the reference to "Extraordinary Popular Delusions and the Madness of Crowds" by Charles MacKay ... looks an interesting/enjoyable read and one that I shall enjoy looking at.
I agree with the sentiment ... "Whichever way you trade, as long as you're profitable, then stick to that formula." I think the major difference twixt me and many here is that I see myself as an investor rather than a trader and my aim is to infinity-hold on a consistent income stream. That's why, for me, the recent buy backs (which yes I am obsessed about) amounts to a 15% pay cut.
From a trading perspective though the recent rises are excellent news ... and I suppose from the point of view of the beneficiaries of my estate too as well -- although it's never wise to be worth more dead than alive!
There will always be a debate about fundamentals vs technicals. But if you read Popular Delusions and the Madness of Crowds, you'll find that sometimes markets can become very irrational and prices ignore the fundamentals. You find it all the time on AIM and in commodities markets. Whichever way you trade, as long as you're profitable, then stick to that formula.
"There is something oddly contradictory about Berkeley Group’s trading update yesterday. On the one hand it reads like a profit warning — reservations are down 16 per cent in the seven months to the end of February and there is a lot of grumbling about planning delays, uncertainty over Brexit and changes to stamp duty all hurting the London market and threatening the capital’s and the UK’s growth and prosperity.
Some might think this a bit rich from a business operating in a sector that for the past few years has been propped up and subsidised by government stimulus measures such as Help to Buy. No matter. Read on and you learn that reservations in the past two months were running ahead of last time, which was well before the market was unsettled by Brexit uncertainty.
Profits for the current year to the end of April, therefore, will come in at the top end of analysts’ forecasts, with much the same to be expected in 2017-18. The company can continue with its programme of returning surplus cash to investors.
The market was in no doubt how to take the update. Berkeley shares shot up 181p to £31.44 and are now approaching the near-£34 seen before the collapse in the sector after the referendum, which was driven by exaggerated fears that the consequent uncertainty would bring that long-awaited collapse in the market arrive. Other housebuilders were up in lockstep yesterday.
That collapse hasn’t happened yet and is still a long way off. Updates from builders this year have shown the old pattern of rising average prices, no hit to buyer interest, healthy margins and a continuing rise in completions. Barratt Developments was even confident enough to extend its generous special dividend programme."
So.. in your opinion.. this share is overvalued,, dividend not good enough... don't trust the Management.. still obsessed with share buyback.. doesn't warrant re-rating...all of which begs the obvious question...
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