Close Inheritance Tax Service (CITS)
Helping clients grow and preserve their legacy
In the 2015/16 tax year, more than £4.6 billion was paid in Inheritance Tax (IHT)1. With a little forethought, much of this money could have been left to beneficiaries instead.
CITS gives a simple, transparent, cost effective way to optimise your client's IHT position after as little as two years, without the need for complex and costly legal arrangements, by utilising Business Property Relief (BPR).
We introduced the service in 2001 and currently manage portfolios for over 1,000 clients.
So how does it work?
If you buy shares in investments that fully qualify for BPR at least two years before your death, and still hold the shares at time of death, that portion of your assets will be exempt from IHT.
CITS could be suitable if your client has £50,000 or more in cash that they do not need for income or other short-term requirements. This solution aims to grow and preserve capital, but the client must be ready to accept high risk and high volatility. There is no guarantee the expected outcome will be achieved and results may vary substantially over time.
Please note that, due to the higher risks involved with these investments, CITS is only available through a qualified financial adviser.
The service invests in shares listed on the Alternative Investment Market (AIM) and the ICAP Securities and Derivatives Exchange (ISDX) markets. In order to reduce risk, we aim to build a diverse portfolio of well-managed companies with the potential to deliver good returns over a two to five-year period.
CITS uses widely accepted tax reliefs that are clearly outlined by HMRC. Clients can keep control of their capital and can access it should their circumstances change, although this will mean giving up the IHT benefits.
For more detailed information
CITS is not a capital protection service and the capital is at risk. The service is dependent on relevant tax legislation remaining in force. For a full disclosure of the risks, read Appendix A in the Client Agreement.
1 Source: HMRC: HMRC Tax & NIC receipts