Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.
Risk Summary

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  • You could lose all the money you invest
  • Most investments are shares in start-up businesses or bonds issued by them. Investors in these shares or bonds often lose 100% of the money they invested, as most start-up businesses fail.
  • Checks on the businesses you are investing in, such as how well they are expected to perform, may not have been carried out by the platform you are investing through. You should do your own research before investing.

You won't get your money back quickly

  • Even if the business you invest in is successful, it will likely take several years to get your money back.
  • The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
  • Start-up businesses very rarely pay you back through dividends. You should not expect to get your money back this way.
  • Some platforms may give you the opportunity to sell your investment early through a 'secondary market' or 'bulletin board', but there is no guarantee you will find a buyer at the price you are willing to sell.

Don't put all your eggs in one basket

  • Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

The value of your investment can be reduced

  • If your investment is shares, the percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
  • These new shares could have additional rights that your shares don't have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

You are unlikely to be protected if something goes wrong

  • Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker.
  • Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here.

If you are interested in learning more about how to protect yourself, visit the FCA's website here.

For further information about investment-based crowdfunding, visit the crowdfunding section of the FCA's website here.

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Tax Efficient Investing
Inheritance tax

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Investing to reduce inheritance tax: how does it work?

It is forecast that the Treasury will collect £42.1 billion in inheritance tax (IHT) between 2023 and 2028 as rates and thresholds are frozen. As a result, a growing number of people may decide to seek out investment opportunities and strategies that could help to minimise a potential IHT liability on their estate.

If you are concerned about inheritance tax, you might be considering the routes available to partially mitigate, or even completely avoid, the potential impact on your estate. Perhaps you’re contemplating setting up a trust, making full use of lifetime gifting allowances, or researching the potential benefits of investing in IHT-efficient schemes.

To help protect your assets against IHT and ultimately enable more wealth to be passed on to your loved ones, a number of tax-efficient investment routes exist to assist with this, including:

  1. EIS and SEIS
  2. IHT portfolios
  3. AIM ISAs

Most often, the types of investments that can offer inheritance tax relief, such as AIM ISAs and EIS/SEIS opportunities, are classed as high risk. This means that such investment types are generally only suitable for high-net-worth individuals (HNWIs) and sophisticated investors with a considerable appetite for risk.

Each of the options mentioned above could provide investors with inheritance tax relief due to qualifying for Business Property Relief (BPR), a feature that enables some businesses, and shares in those businesses, to be passed down to beneficiaries upon the death of the owner, completely free of IHT.

Important: The information on this page is for experienced investors. It is not a personal recommendation to invest. If you are unsure, please seek professional advice. It should be noted that investing to mitigate IHT is not classed as a form of tax-planning, but rather an investment strategy that can offer tax relief. The value of investments can fall as well as rise, and you may get back less than you originally invested. 


What is Business Property Relief?

Some investment routes can offer investors 100% inheritance tax exemption on qualifying shares, provided that they have been held for a minimum of two years and are still held at the time of the investor’s passing. This is because such schemes qualify for Business Property Relief (BPR).

Introduced in 1976, BPR (more recently referred to as Business Relief) was originally designed to ensure that, after the death of a business owner, a family-owned business could continue as a trading entity without having to be sold or broken up to pay an IHT liability.

Over the course of recent decades, successive governments have recognised the importance of encouraging people to invest in trading businesses – irrespective of whether or not they actually run the business themselves. Ultimately, this has led to investors who hold shares in BPR-qualifying businesses also being able to benefit from the inheritance tax relief offered by the scheme.

Investors can access BPR-eligible companies by directly investing in their shares – which can be useful for experienced investors who want complete autonomy over the investment opportunities selected – or by investing into a portfolio overseen by a professional manager that solely invests in companies qualifying for BPR.

Whilst some BPR-eligible investments have the potential to provide investors with inheritance tax relief and superior return potential, a number of risk considerations must be accounted for, including that tax rules are subject to change, and the availability of inheritance tax relief depends on companies in which you have invested to maintain their BPR-qualifying status. Should they lose this, IHT relief for investors would be lost.

Important: Please note that BPR-eligible investments are not a tax-planning tool, but a type of investment that can offer an inheritance tax benefit.


1. EIS and SEIS

The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) each offer the potential for investors to pass shares on to beneficiaries, 100% free of inheritance tax, upon their passing, provided that the minimum holding period of two years is met.

The Enterprise Investment Scheme

Introduced by the UK Government in 1994, the Enterprise Investment Scheme (EIS) is a venture capital scheme designed to attract investment into UK startups and scaleups by offering investors a range of generous tax benefits in return, including up to 30% income tax relief, capital gains tax exemption and 100% inheritance tax relief on EIS shares.

Access: Free Guide to the Enterprise Investment Scheme

Since its inception, the EIS has been highly successful, attracting more than £25 billion of total investment for 36,720 companies. In the 2020/21 tax year alone – even with the additional uncertainty of Covid-19 – 3,755 companies raised a total of £1.658 billion under the EIS.

The Seed Enterprise Investment Scheme

A newer variation of the EIS, with a specific focus on investment into seed-stage startups, is the Seed Enterprise Investment Scheme (SEIS). The SEIS offers investors a comparatively more generous range of tax reliefs than the EIS (including up to 50% income tax relief and capital gains tax reinvestment relief, paired with the same 100% IHT exemption on shares) in return for accepting the added risk of investing into particularly early-stage companies.

Since being introduced in 2012, the SEIS has raised £1.5 billion for 15,870 UK startups, attracting a total of £175 million in 2020/21 alone (a 4% increase from the previous year).

How does IHT relief via the EIS and SEIS work?

Both the EIS and SEIS are able to offer investors 100% inheritance tax exemption on their shares if they have been held for a minimum of two years and are still held at the time of the investor’s passing. This is because startups and scaleups that qualify for these schemes can also qualify for Business Property Relief (BPR).

EIS- and SEIS-eligible investments aren’t typically managed with IHT exemption as a sole priority, but both do generally qualify for BPR and can therefore offer investors an IHT benefit, in addition to income tax relief, capital gains tax (CGT) relief, and loss relief – as well as the ability to support the growth of UK startups and scaleups and contribute to social, technological and economic development.

Whilst EIS and SEIS investments can often provide investors with considerable return potential, these schemes tend to support unlisted, fledgling companies, where the investment risks can be comparatively higher than those associated with more mature private equity options. This is where tax reliefs can provide significant benefit to investors by helping to partially combat the additional investment risks linked to early-stage venture capital.

Read More: How to claim your EIS tax reliefs: inheritance tax

It is also important for investors to note that most EIS and SEIS opportunities are relatively less liquid than traditional equity investments, and inheritance tax exemption depends on the company retaining its BPR-qualifying status. Tax rules can change, and the availability of tax reliefs and exemptions depends on individual circumstances. 

Overall, if this route is deemed suitable for your portfolio after conducting sufficient research, investors should select EIS and SEIS opportunities based on their inherent value propositions, as well as any potential tax reliefs. This can help to ensure that the attractiveness of an investment itself precedes the attractiveness of any associated tax benefits.


2. IHT portfolios

An IHT portfolio is a managed portfolio of private or AIM-listed companies that qualify for BPR, and can be another favoured option for investors seeking to minimise a potential inheritance tax liability. The portfolio is overseen by a professional team who research and select companies in which to invest, and monitor them to ensure they retain their BPR-qualifying status. 

IHT portfolios investing in AIM-listed companies typically have around 25 to 30 holdings, whereas IHT portfolios focusing exclusively on private companies generally have fewer holdings. 

Investing in an IHT portfolio will often involve an initial charge (this can vary widely, from 0% to 5.5%) and an annual management fee (typically around 2%, plus VAT). Some providers may also apply performance fees and other charges, so it is important to read the provider documents for the full details. 

There is no maximum investment limit for IHT portfolios, and the minimum investment will vary depending on the provider, but is typically in the region of £50,000 (significantly higher than the average individual EIS/SEIS investment minimum).

IHT portfolios are designed for experienced investors whose estates are large enough to be impacted by inheritance tax, and who wish to retain control of their assets for the remainder of their lifetime. Investors must be comfortable with the associated investment risks, as unquoted shares can be significantly less liquid and overall higher risk than traditional equities.

How does tax relief via an IHT portfolio work?

Upon the owner of an IHT portfolio passing away, the executors of the will or administrators of the estate can claim BPR on the investment portfolio when they value the estate. However, if you pass away within two years of investing in the portfolio, the asset could be subject to IHT.

They may have to submit schedule IHT412 (for unlisted stocks and shares and control holdings) in addition to form IHT400 (inheritance tax account), as well as any other forms the estate’s circumstances will require as part of the probate process (the IHT portfolio manager will typically send details of the investment, along with an information pack, to assist with this).

One of the main advantages of investing in IHT portfolios is the degree of control you can retain over your wealth. For instance, if your circumstances were to change, it is possible to request your funds. However, in this scenario, you would lose access to any IHT relief and, as unquoted shares are typically less liquid than those listed on a main stock exchange, it could take longer to liquidate your investment. 

Moreover, the amount you withdraw will become part of your taxable estate again, unless you spend it, give it as a gift (in some circumstances), or invest it into another IHT-efficient scheme.

Ultimately, although IHT portfolios can be crafted to mitigate an IHT liability, the broad range of additional tax reliefs offered by the EIS and SEIS (including capital gains tax exemption, reinvestment relief, and up to 50% income tax relief) are not offered by the standard IHT portfolio.

So, if you are seeking a more all-encompassing range of tax exemptions and reliefs, with income tax and capital gains tax being considered, as well as inheritance tax, EIS and SEIS opportunities may prove to be the most beneficial route.



It is possible to invest in companies quoted on the Alternative Investment Market (AIM) and receive IHT exemption on the value of your shares, as well as a number of other tax reliefs. Different approaches can be followed to invest tax-efficiently via AIM, such as investing into individual AIM stocks that qualify for Business Property Relief, investing into AIM IHT portfolios, and holding BPR-qualifying AIM investments within a Stocks and Shares ISA.

The Alternative Investment Market

A sub-exchange of the London Stock Exchange, the Alternative Investment Market (AIM) facilitates investment into comparatively smaller and/or younger companies than those listed on its larger counterpart. AIM is a diverse index, comprising nearly 800 companies with valuations of around £450,000 to over £3.3 billion, as of March 2022.

Although shares traded via this exchange are often colloquially referred to as being 'listed on AIM', they are in fact not listed, but rather admitted to trading on AIM. They are not classed as publicly traded stocks on a major stock exchange, which means that AIM shares can often qualify for BPR.

Read More: The Alternative Investment Market: what you need to know as an  investor

Investors should note that, due to the relatively small size of AIM-listed companies, as well as a comparative lack of market regulation, this can be a challenging market to navigate. For example, trading on AIM requires no minimum market capitalisation, no previous trading record, and no prescribed level of shares to be in public ownership (unlike the 25% minimum for the main market). This reiterates the need for investors to undertake thorough due diligence before investing into an AIM-quoted company.

AIM IHT portfolios

AIM IHT portfolios solely invest in AIM companies that qualify for BPR. These portfolios typically invest in 20-35 companies, and AIM IHT portfolio managers tend to focus on more established startups and SMEs, which can be resilient and also deliver growth – but can still be volatile.

After at least two years since the date of investment has passed, your AIM portfolio could be left to your beneficiaries – free from IHT – upon your passing. If your beneficiaries sell these shares, any amount raised would become part of their estate, and could be subject to capital gains tax (CGT).

Should you pass away before the minimum two-year holding period has been fulfilled, the portfolio can (as with any assets) be passed on to your surviving spouse or civil partner, inheritance tax free. In this case, your spouse will be able to fulfil the remainder of the holding period before the portfolio is eligible to be passed onto beneficiaries, IHT-free, and the two-year BPR clock will not need to be restarted. 

If your surviving spouse or civil partner continues to hold the portfolio – provided that the combined holding period between both you and your partner exceeds two years – the shares can be left to their beneficiaries upon their passing, free from IHT. 


An ISA (Individual Savings Account) exists in four main forms, including the Stocks and Shares ISA, Lifetime ISA, Cash ISA and Innovative Finance ISA. These investment arrangements, introduced by the UK Government in 1999, can offer a favourable tax status, with income tax exemption, capital gains tax exemption and dividends tax exemption on assets held within your ISA. 

The maximum annual ISA allowance is £20,000 (as of the 2022/23 tax year), which can be allocated into one type of ISA, or distributed across some or all of the ISA types (although you can only pay £4,000 into a Lifetime ISA per tax year).

An AIM ISA can be created when companies listed on AIM that qualify for Business Property Relief (and, consequently, inheritance tax relief) are held within a Stocks and Shares ISA. This means that ISA holders could receive inheritance tax exemption on their AIM shares, as well as the income tax, CGT and dividends tax exemption offered by an ISA.

Although AIM ISAs can provide investors with the potential to benefit from IHT exemption alongside a number of additional tax reliefs, they tend not to target the same levels of growth as individual EIS or SEIS investments. On average, AIM ISAs are likely to target lower levels of investment growth than the target 5x to 25x money-on-money returns that individual EIS or SEIS investments often target.

It is important to remember that an AIM ISA strategy may be more risky, more volatile and less diversified than a traditional Stocks & Shares ISA portfolio. Importantly, tax rules can change, and the availability of tax relief depends on AIM ISA companies maintaining their BPR-qualifying status – should they lose it, your ability to receive IHT relief would also be lost.


Is investing to reduce inheritance tax right for me?

If you have a considerable estate that is likely to exceed the available IHT nil-rate bands, perhaps you are considering investments that can offer inheritance tax exemptions to enable as much wealth as possible to be passed on to your beneficiaries.

Some routes, such as gifting your assets or setting up trusts, involve giving up control of large sums of capital. If these routes don’t seem right for you, or you’re looking for other options in addition to these IHT planning strategies, BPR-qualifying investments, such as the routes explained above, are held in your name, meaning that you can keep hold of your wealth for the remainder of your lifetime.

Furthermore, IHT-efficient investments may be particularly effective if you want the capital you invest to become exempt from inheritance tax relatively quickly. This is because many traditional estate planning tools generally take seven years before they become fully IHT-exempt, whilst BPR-eligible investments can become 100% exempt from IHT after only two years, provided that the shares are still held at the time of the investor’s passing.

Read More: How to avoid inheritance tax: key considerations and strategies

Additionally, inheritance tax efficient investments can give the inheritance you are planning to leave behind the chance to grow in value. However, as with any financial investment, there are no guarantees, and you could lose some, or all, of the capital invested.

It is important to note that shares qualifying for BPR can benefit from inheritance tax relief, but, unlike most trusts and gifts, still form part of your estate. This could affect how much of the residence nil-rate band your estate is entitled to, if at all, due to the RNRB taper effect impacting estates that exceed £2 million.

For individuals who are willing and able to accept the associated investment risks, the speed and simplicity with which inheritance tax efficient investments can offer 100% IHT relief on the value of shares can be a highly compelling feature, as well as retaining the ability to plan during your lifetime without giving up control of your capital. 

Inheritance tax efficient investments can fulfil a breadth of purposes, from generating considerable tax-free returns via the venture capital space with the EIS and SEIS, to maximising the potential of your annual ISA allowance via AIM ISAs. Ultimately, when adopted as part of a wider, balanced IHT-planning strategy, IHT portfolios, AIM ISAs, and EIS and SEIS opportunities can assist in minimising, or even avoiding inheritance tax liabilities entirely, maximising the proportion of wealth you are able to pass on to your loved ones.


Can I invest in IHT-efficient investments with GCV?

The GCV co-investment platform, GCV Invest, offers a range of investment opportunities qualifying for the EIS and SEIS, each of which can offer 100% inheritance tax exemption, provided that the assets have been held for at least two years, and are still held at the time of the investor’s passing.

It is important to remember that investments should be selected based on their inherent value propositions, and not solely on the basis of receiving potential tax reliefs and exemptions. Investing via reputable investment platforms with a sophisticated due diligence process and a proven track record can help to ensure that the investment opportunities in question are well-researched and carefully selected.

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