Diversifying a portfolio

Tax planning strategies to help your clients build a more diverse portfolio while making use of available tax reliefs.

Planning ideas

Helping clients who want to broaden their investment portfolio

Experienced investors may be interested in diversifying their portfolio by making a medium- to long-term investment that also has tax benefits.

Venture Capital Trusts (VCTs) and Enterprise Investment Scheme (EIS) investments back early-stage companies, which can bring something different to a client’s portfolio. Investors can claim certain tax reliefs which act as an incentive to take on the risk of investing in smaller companies. Read more about the risks.

Let’s look more closely at planning ideas for clients who want to diversify their portfolios.

Planning ideas for clients

ISA investors

Scenario

Clients who’ve built up large ISAs and have an inheritance tax liability can be reluctant to sell down their ISA investments for estate planning.

Opportunities

Clients can hold certain shares in an ISA that qualify for inheritance tax relief. They could move some or all their ISAs into an inheritance tax-efficient portfolio.

Solutions

Octopus AIM Inheritance Tax ISA

Looking for high growth

Scenario

Clients with a broad investment portfolio and high annual income may want to invest in high growth opportunities.

Opportunities

Clients can make a tax-efficient investment that targets high growth by investing in smaller companies. Investors can claim valuable tax reliefs in return for the risk they take by investing.

Solutions

Enterprise Investment Scheme (EIS)

Risks

Risks to keep in mind

Capital is at risk

The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.

Tax relief can’t be guaranteed

Tax treatment depends on individual circumstances and tax rules could change in the future. Tax reliefs depend on the VCT and portfolio companies maintaining their qualifying status.

The investment may be volatile and difficult to sell

VCT shares and the shares of smaller unquoted companies, could fall or rise in value more than other shares listed on the London Stock Exchange’s main market. They may also be harder to sell.

Contact us

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Key documents

Key documents

Octopus Titan VCT brochureDownload
Octopus AIM VCTs brochureDownload
Octopus Apollo VCT brochureDownload
Octopus Ventures EIS Service brochureDownload
Octopus AIM Inheritance Tax ISA brochureDownload

Related webinars

Related webinars

On demand webinarVenture Capital TrustsCPD activity

Identifying clients who could benefit from a VCT

Business Development Managers Jim Cavey and Peter Marsland give an introduction to venture capital trusts (VCTs) and discuss client planning ideas where VCTs could be used. This session is CPD accredited.

Duration: 38mins
On demand webinarBusiness Property ReliefVenture Capital TrustsCPD activity

Planning opportunities for clients who own a business

Our in-house experts discuss ideas that can maximise the planning you do for business owners. And you'll hear from advisers on the planning they’ve put in place for business owning clients.

Duration: 54mins