RWS TIPPED..........8 Dec 2017 11:30
RWS Rws Holdings...tipped by questor in the telegpaph.
<b>Questor: buy IHT-free RWS as it tightens its hold on patent services for blue-chips</b>
Sam Brodbeck
8 DECEMBER 2017 • 8:01AM
Patents may not sound the sexiest of investments but these crucial legal documents hold the key to billions of pounds of corporate earnings.
Just ask Catherine Hettinger, the American creator of the “fidget spinners” now selling from a corner shop near you to legions of British schoolchildren.
Ms Hettinger has not earned a penny from the millions of sales after she surrendered the patent for her design in 2005 because she could not afford the £300 renewal fee.
On a rather grander scale, it is this kind of “intellectual property” that the world’s largest companies, in particular those that operate in pharmaceuticals and technology, rely on.
Multinational firms need watertight patents filed in the many markets they operate in and that is where today’s addition to Questor’s new Inheritance Tax Portfolio can help.
Listed on the junior Aim market, RWS Holdings is the market leader in translating intellectual property rights. It has a particular focus on companies in the life sciences sector, such as biotechnology, cosmetics and food processing firms.
Patent filing is becoming more international, according to RWS, with three-quarters of the firm’s clients now filing in four or more countries.
An excellent example of a business with Warren Buffett’s favoured “economic moats”, the company is used by all of the most frequent patent filers, which like the expertise offered by its staff of multilingual science graduates.
Likewise, RWS is found in many of the “IHT portfolios” now offered by investment firms to clients who want to minimise death duties.
Like Questor’s IHT portfolio, these include companies likely to qualify for “business property relief” and therefore able to be passed on tax free on death if held for at least two years.
HM Revenue & Customs does not keep a list of firms that qualify for this relief, and the stock must have tax-exempt status in the same tax year as the death.
For that reason it is impossible to say for certain that an investment will be entirely tax free but RWS’s inclusion in the portfolios of wealth managers such as Investec and Octopus Investments is comforting. Octopus, for instance, employs auditor PwC to monitor the IHT status of its investments.
Octopus fund manager Richard Power has held RWS since his firm launched its IHT service in 2005. Power told Questor he was still buying the shares despite the 24pc rise in the price since January.
“RWS has raised its profits and dividends ever since it listed in 2003, even through the financial crisis,” he said. “It’s a very reliable underlying business, not very exposed to economic cycles.
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