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Last week, The Telegraph reported that withdrawals from the Octopus Inheritance Tax Service remain suspended, affecting around 18,000 investors. Yesterday (21/09/2026), the Financial Times has revisited the issue under the headline “Octopus still won’t give investors their money back.” The Telegraph reports that withdrawals have been paused since early July while Octopus works through a transaction involving part of the underlying portfolio. Octopus maintains that the suspension is not due to a liquidity problem. The Octopus Inheritance Tax Service (not to be confused with Octopus AIM Inheritance Service) invests its client’s money into a private (unlisted) holding company called Fern Trading Ltd, which in turn has hundreds of investments in subsidiary trading companies involved in a host of activities, notably broadband, renewable energy and property development. Whatever the eventual outcome, the situation provides an important reminder that tax efficiency should never be considered in isolation from liquidity, transparency and investment risk. There is considerable risk investing in opaque, unlisted, private company tax driven schemes, the valuation methodology for which is highly questionable and not driven by real market forces. Private schemes such as the Octopus Inheritance Tax are not marked to market on a daily basis and assume by some to be lower risk, due to the perceived lower volatility. However, lower volatility in this instance should not be confused with lower risk – in the absence of regular market pricing volatility is bound to be lower. Listed shares such as those on AIM, are marked to market and offer far greater liquidity and transparency, but evidently greater volatility, due to their real market pricing. The events reported by the Financial Times and The Telegraph shouldn’t lead investors to dismiss Business Relief. But they should encourage an important question: Do I properly understand what I am investing in, how transparent it is and how easily I could access my money if my circumstances changed? Good Inheritance Tax planning isn’t simply about achieving the largest tax saving. It is about finding the appropriate balance between tax, investment risk, transparency and access to capital. To discuss this with one of our portfolio managers, please get in touch on 01923 713890 or email [email protected]. |
