ESTATE PLANNING IEP CARE & IEP CARE COVER SERVICE OVERVIEW

Transcription

1 ESTATE PLANNING IEP CARE & IEP CARE COVER SERVICE OVERVIEW

2 WELCOME TO INGENIOUS At Ingenious, we believe that preparing for changing circumstances is a cornerstone of sound fi nancial planning especially when it comes to protecting the legacy you are creating for your loved ones. We have designed IEP Care to address this challenge. IEP Care is a simple, fl exible service that offers you protection from the impact of inheritance tax in just two years and provides you with the peace of mind that this part of your legacy is being managed carefully and professionally. IEP Care also provides access to a support team from Grace Consulting, the UK's premier independent consultant on care options. If required, experts from Grace Consulting will guide you through the complex decision making process for long-term care. We are also delighted to offer eligible investors IEP Care Cover, a new service that combines the features and benefi ts of IEP Care with insurance cover that mitigates the potential impact of IHT on the value of an investment should the investor die before their investment qualifi es for Business Relief. Your fi nancial adviser will offer guidance on whether IEP Care or IEP Care Cover is the right solution for you, but in the meantime, if you have any questions about this service, please contact us on Neil Forster Chief Executive, Ingenious

3 MARKET LEADER A market leading alternative investment manager, authorised and regulated by the Financial Conduct Authority (FCA) EXPERT TEAM A team of 250 professionals with extensive experience and sector knowledge UNKNOWN ANGLE We look for hidden opportunities across our three specialist sectors: media, real estate and infrastructure At Ingenious one of our great strengths is investing in change TRACK RECORD Since inception in 1998, we have successfully raised and deployed over 9 billion INVESTMENT GROWTH Investment opportunities have the potential to generate predictable and steady growth RISK MANAGEMENT Legal, compliance and tax specialists work with fund managers to support the interests of clients

4 WHAT IS IEP CARE? IEP Care is an estate planning service that is designed to deliver a target annual growth rate of 3-5% (net of fees) by investing in companies that qualify for Business Relief (BR). This means that an investment in IEP Care will be exempt from IHT after just two years without asking you to sacrifi ce control over your estate. The result is fast, simple, comprehensive protection from IHT, with an investment managed by Ingenious under a strategy designed to preserve capital value and provide you with easy access to your investment. Ingenious will invest your funds into BR qualifying companies within: media, real estate and infrastructure. The companies selected by Ingenious will operate under a trading strategy that focuses on activities that: demonstrate clearly defi ned, predictable returns follow transparent, well-understood investment models suit our focus on capital preservation and steady growth YOUR INVESTMENT INTO IEP CARE MEDIA REAL ESTATE INFRASTRUCTURE

5 STRATEGY OVERVIEW EXAMPLE PROJECTS Fully asset backed loan Repayment not dependent on fi lm or television show performance Robust collateral Financial and commercial due diligence on counterparties Projects must meet a minimum target return Security over borrower and direct payment assignments Carefully selected locations across the UK with demonstrable market liquidity Houses, fl ats, new builds and conversions Commercial and mixed use properties considered Planning permission in place Borrowers with an established track record in their markets Rigorous legal, commercial and technical due diligence Bulk of revenues backed by long term government subsidies or Power Purchase Agreements Asset management: Experienced development partners Active management of the asset to fully extract value from the projects Proven technologies and reliable equipment Long term highly predictable returns Loan required: 3,842,920 Security: secured against a US licensor for worldwide Subscription Video On Demand (SVOD) rights with value in excess of secured amount Loan terms: Arrangement fee of 1% payable upfront and deducted from the fi rst loan advance Interest of 3.5% above Bank of England base rate of 0.5% Interest reserve of 115, 000 to cover expected interest costs of 99,000 Costs of protective currency hedge paid by the borrower Loan repayment period of 21 months Average loan size 7.5 million Typical duration of up to 24 months LTV of up to 75% First legal charge over the development Corporate or personal guarantees Loan required: short term loan of 1.7 million for the fi nancing of an anaerobic digestion project Loan terms: The underlying project is a 1MW plant qualifying for Feed in Tariff and Renewable Heat Incentive Heat and electricity are sold to a neighbouring chemicals plant Long term contracts for sale of heat and electricity and feedstock supply The loans are secured with a charge against the company

6 THE BENEFITS OF IEP CARE IEP CARE PROVIDES AN ESTATE PLANNING SOLUTION DESIGNED TO DELIVER THE FOLLOWING BENEFITS: FLEXIBILITY A fl exible, market leading estate planning service designed to help you plan for potential care costs. SUPPORT You will have access to a support team from Grace Consulting, the UK's premier independent consultant on care options. If required, experts from Grace Consulting will guide you through the complex decision making process for long-term care. TRANSPARENCY AND RISK MANAGEMENT Investments will be selected and managed in accordance with a clear investment strategy seeking to carefully grow and preserve the value of your investment. You will be provided with regular performance updates and access to a dedicated support team. IEP CARE EFFICIENCY Your investment should qualify for Business Relief (BR) once the investment has been held for two years meaning it could be exempt from inheritance tax (IHT). CONTROL You retain benefi cial ownership of your investment and can access your funds as needed. Other methods can require you to give up control of your assets.

7 GRACE CONSULTING INDEPENDENT CARE GUIDANCE For more than 30 years, Grace Consulting (a UK leading independent provider of care services information, guidance and support) has helped its clients make appropriate choices to meet their care needs. EXPERT GUIDANCE SERVICE PRINCIPLES We strive to empower our customers to make the right care choice by providing them with expert, accurate and up-to-date advice. We will support a client and their family sympathetically and professionally through the transition period from home to care home. We remain completely independent and impartial, meaning that we do not have links or relationships with individual care providers or care homes. Full details of the range of care guidance services available and applicable terms and conditions can be found in the Investor Agreement.

8 IEP CARE IN ACTION CASE STUDY THE IMPACT OF IHT ON A 1M ESTATE NO ESTATE PLANNING Net value to beneficiaries: 860k 250K IEP CARE INVESTMENT Net value to beneficiaries: 960k 350K IEP CARE INVESTMENT Net value to beneficiaries: 1m Property Other Assets IHT IEP Care Note: This illustration of a 1 million estate assumes a 650,000 nil rate band applies and is based upon the value of an IEP Care investment which has been held for at least two years at death. This assumes no RNRB is available.

9 CONTROL YOUR INVESTMENT CONTROL Having spent a lifetime carefully building your legacy and making decisions on how best to provide for the fi nancial wellbeing of your family, would you want to sacrifi ce control of your assets as you plan for the future? Unfortunately, many common estate planning strategies require you to do just that in return for protecting your estate from IHT. IEP Care is different: you retain control over your investment. DRAWDOWN You can elect to drawdown any growth generated by your investment annually or seek to build the value of your investment by leaving the growth in the service. MAKING WITHDRAWALS You, or the executors of your will, may seek to realise some or all of the value of your investment at any time. The Manager will aim to facilitate all payments within one to six months, subject to available liquidity. ADDITIONAL CONTRIBUTIONS You have the option to make further contributions in BR qualifying companies. Each contribution (of at least 10,000) will need to be invested for two years to become exempt from IHT.

10 INTRODUCING IEP CARE COVER IEP Care Cover aims to mitigate the potential impact of IHT on an investor s beneficiaries should the investor die within the initial two year period before their shares qualify for BR. Subscriptions in IEP Care Cover will benefi t from all the features of IEP Care but will also benefi t from cover under a Lloyd's of London syndicate for an amount equal to 40% of a subscription of up to 500,000 (net of the initial investment and dealing fees and adviser charges deducted from the subscription, the Net Investment Amount), for a period of two years from allotment of the shares to the investor. The investor should discuss their requirements with a fi nancial adviser and read the terms and conditions set out in full in the applicable Investor Agreement before deciding whether IEP Care Cover would be appropriate for them. WHY IEP CARE COVER? COMPREHENSIVE AND COST EFFECTIVE COVER The value of an initial investment will be protected against the potential impact of IHT until an investor's shares have been held for two years. IMMEDIATE PROTECTION Cover is provided from the date that an investor s shares are acquired. SIMPLICITY Cover provided without medical examination. Please note that specifi c eligibility criteria and exclusions apply in relation to a subscription in IEP Care Cover and a claim under the insurance policy which are set out in detail in the Brochure and Investor Agreement for IEP Care Cover.

11 KEY POLICY TERMS COVER: Benefi t payable upon death of an investor during the policy term (subject to exclusions). BENEFIT: The policy gives protection of 40% on a Net Investment Amount of up to 500,000. If an investor withdraws funds from the service during the term of cover, the amount of the cover under the policy will be reduced prorata. TERM: Two years from the date of allotment of shares to the investor. See Brochure and Investor Agreement for IEP Care Cover for full terms and conditions. WHO IS ELIGIBLE FOR COVER? 18+ YOU MUST BE AT LEAST 18 AND NOT ATTAINED AGE 90 YEARS ON THE DATE WHEN WE RECEIVE YOUR APPLICATION AND NO MORE THAN TWO MONTHS OLDER THAN 90 WHEN THE SHARES ARE ALLOTTED. YOU WILL NEED TO PROVIDE A HEALTH DECLARATION, AS SPECIFIED IN THE APPLICATION FORM. THE INVESTOR MUST BE A RESIDENT IN THE UK AT DATE OF SIGNATURE OF THE APPLICATION FORM. IEP Care Cover is designed specifi cally for those investors who are expected to be eligible for the cover provided thereunder. This option may only be selected by individuals, and investments made through trusts will not be able to benefi t from the cover. Before selecting IEP Care Cover, potential investors should carefully read the full terms of the applicable Investor Agreement, including the eligibility criteria and exclusions, to ensure eligibility. Applications from investors believed by Ingenious not to meet the eligibility criteria for cover under the insurance policy will not be accepted. Investors who do not meet the eligibility criteria for the insurance cover should not select IEP Care Cover.

12 HOW DOES IEP CARE COVER WORK? 2 YEARS APPLICATION PROCESS The investor makes an application for IEP Care Cover, completing the required declarations and providing an expression of wishes regarding the distribution of any proceeds successfully claimed under the policy. The investor s application is then processed by the Manager, confi rming eligibility for this service. INSURANCE COVER BEGINS The cover provided under the insurance policy will commence upon the allotment of applicable shares to the investor. DURING THE COVER PERIOD Insurance cover will remain in place for a period of two years. The investor may provide the Manager with a new expression of wishes at any time.

13 4 5 6 ON DEATH DURING THE COVER PERIOD The investor s personal representatives will notify the Manager on death and provide a certifi ed copy of the death certifi cate to the Manager to pass on to the insurer to make a claim. The Manager will request from the personal representatives any further information requested by the insurer to process the claim. PAYMENT OF PROCEEDS OF A CLAIM Once the insurer settles the claim and pays the proceeds to Ingenious (IEP Cover) Limited, Ingenious (IEP Cover) Limited shall pay such proceeds to the investor s benefi ciaries, taking into account the investor s most recent expression of wishes. END OF COVER PERIOD At the end of the two year period, cover for an investor shall automatically cease.

14 CHARGES The following provides a breakdown of the Service costs that are payable to the Manager. ONE-OFF CHARGES 1. Investment fee 2% of your subscription in the Service. This will be in addition to any fee charged by your adviser. 2. Dealing fee An amount equal to 1% of your subscription charged upon investment and 1% of the value of shares sold upon any withdrawal or redemption you make from the Service. ONGOING CHARGES 1. Annual management fee Up to 1% of the value of your investment. This fee will accrue quarterly and be charged at the end of each year but only when growth generated is above the minimum targeted return of 3% per annum. 2. Administration fee 0.25% of the value of your investment per annum accrues daily and is to be paid at the end of each quarter or on redemption. ADDITIONAL IEP CARE COVER CHARGE % of the Net Investment Amount for your subscription in IEP Care Cover in each of the fi rst two years following your subscription in the service. The full anticipated amount of this fee in respect of the two years will be deducted from a subscription prior to making an investment into shares, and will be paid annually in advance 1. All charges will be subject to applicable VAT and relate to advised retail clients. Other administrative and transaction fees are payable. Full details of all charges are set out in the Brochure and Investor Agreement. Payment of any ongoing fees payable to your adviser will be facilitated by realising a portion of your investment. This may give rise to a tax charge for you. Please refer to the Brochure for full details of the fees and charges that apply to a subscription in IEP Care and IEP Care Cover. 1 Once paid, this Additional Annual Fee is non-refundable, regardless of an investor s subsequent death, redemption or partial withdrawal. If an investor dies or makes a full redemption during the term of cover under the insurance policy, the investor will not pay any future Additional Annual Fees. If an investor makes a partial withdrawal during the fi rst year of cover under the insurance policy, the Additional Annual Fee in respect of the second year of cover will be reduced pro-rata to refl ect the reduced level of cover.

15 THE FINE PRINT SUBSCRIPTIONS The minimum individual subscription is 25, Investors can make further subscriptions of no less than 10,000 per subscription. REALISATIONS The Manager s ability to facilitate payment requests, including on redemption, will always be subject to liquidity constraints, the Manager s policy on realisations and the terms of the investor agreement All payments will be executed by reference to the service s latest published valuation on the date the relevant payment request is processed The Manager will endeavour to facilitate realisations such that growth in the value of the investment will be afforded capital treatment in the hands of the investor for tax purposes. However, in some cases, the return may be taxed as an income distribution Until redemption is requested, investors must retain a minimum investment of 10,000 All sums realised from your investment during your lifetime will become part of your estate and therefore may be liable to IHT RISK FACTORS Unless specifi cally stated otherwise, all Risk Factors referred to below apply both to subscriptions in IEP Care and in IEP Care Cover. An investment in IEP Care or IEP Care Cover involves a degree of risk and may not be suitable for all potential investors. A potential investor should seek advice from a fi nancial adviser before making any decision to invest. It is recommended that a potential investor should consult a professional adviser regarding his or her personal tax position. Factors that may impact level of returns and the availability and timing of relief and realisations for investors include: the performance of the BR companies the Manager being able to identify appropriate BR companies which carry on, and continue to carry on, a BR permitted activity changes to tax, particularly the bases of taxation, tax relief, rates of tax or an investor s tax position the risks of eligibility for, and recovery under, the insurance policy for investors in IEP Care Cover as detailed in the Brochure the level of available liquidity within the underlying companies and opportunities for market purchases of shares Past performance is not a guide to future performance and may not be repeated. The value of an investment in the service can go down as well as up and you may not get back the full amount invested. Please refer to the Brochure for a detailed explanation of the potential risks. HOW TO APPLY After reading the Brochure and Investor Agreement, please complete the application form as directed in the Brochure and return it with supporting documentation and payment to Client Services Centre, Ingenious Capital Management Limited, 15 Golden Square, London, W1F 9JG. 1 Subject to the Manager s discretion to accept a lower amount. IMPORTANT INFORMATION This document constitutes a fi nancial promotion pursuant to Section 21 of the Financial Services and Markets Act 2000 (FSMA) and relates to Ingenious Estate Planning IEP Care (IEP Care) and IEP Care Cover. It is issued by Ingenious Capital Management Limited (the Manager), 15 Golden Square, London, W1F 9JG, which is authorised and regulated by the Financial Conduct Authority (Firm Reference Number ). In relation to the IEP Care Cover section of this document, the insurance cover referred to is arranged by Ingenious (IEP Cover) Limited, 15 Golden Square, London, W1F 9JG. Ingenious (IEP Cover) Limited is an Appointed Representative of RKH Specialty Limited, a company incorporated in England and Wales (company registration number ) whose registered offi ce is at 16 Eastcheap, London, EC3M 1BD. RKH Specialty Limited is authorised and regulated by the Financial Conduct Authority (Firm Reference Number ). Investment management is provided by the Manager. This information does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for IEP Care or IEP Care Cover. Any decision in connection with an investment in IEP Care or IEP Care Cover should be made only on the basis of information contained in the Brochure and Investor Agreement. If you are in any doubt about the content of the Brochure, Investor Agreement, and/or this document and/or any action you should take, you are strongly recommended to seek advice immediately from a fi nancial adviser authorised under FSMA who specialises in advising on opportunities of this type. Nothing in this document or the Brochure or Investor Agreement constitutes investment, tax, legal or other advice by the Manager and your attention is drawn to the section headed Risk Factors in the Brochure. The services provided by the Manager will not be suitable for all recipients of this document or the Brochure or Investor Agreement. All statements of opinion or belief contained in this Overview or the Brochure or Investor Agreement and all views expressed and statements made regarding future events or illustrative returns of IEP Care or IEP Care Cover represent the Manager s own assessment and interpretation of information available to it as at the date of the Brochure. No representation is made, or assurance given, that such views, statements, and illustrations of fi nancial performance are correct, attainable or complete or that the objectives of IEP Care or IEP Care Cover will be achieved. The views, statements, and illustrations of fi nancial performance are based upon various assumptions and estimates which involve signifi cant elements of subjective judgment and analysis and which are subject to uncertainties and contingencies; actual results could differ materially from those set forth in such views, statements, and illustrations. Prospective investors must determine for themselves what reliance (if any) they should place on such views, statements or illustrations, and no responsibility is accepted by the Manager in respect thereof.

16 ANY QUESTIONS: If you would like to fi nd out more about how IEP Care and IEP Care Cover can benefi t investors, please contact our Client Relationship Team on Ingenious Capital Management Limited 2019 IEP_021_IEPCARO