New Bulgarian Property Fund Helps Britons Mitigate IHT

by Carla Johnson, Investors Offshore.com

03 February 2005

A new investment scheme has been launched in the United Kingdom designed to mitigate the effects of inheritance tax by investing in the Bulgarian property market, it has been reported.

According to the Daily Telegraph, the Black Sea Property Fund, launched by Development Capital Management (DCM), is a seven-year savings plan giving investors the option of putting money into property shares which will have full exposure to the market, or a capital protected option underwritten by Foreign & Colonial.

While the latter option will potentially mean a lower return on investment, it guarantees to pay back investors' capital outlay at the end of the term. The minimum investment has been set at £30,000.

The fund has been registered in Jersey as an offshore investment company, and will be listed on London’s small-cap stock market, the Alternative Investment Market (AIM).

The money invested in the scheme is effectively removed from an individual’s estate for inheritance tax purposes. The investment becomes subject to IHT upon maturity, although financial advisors are hopeful that a rollover option can be built into the scheme.

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