Foresight Inheritance Tax Solution Sustaining ... - Foresight Group

Foresight
Inheritance Tax Solution
Sustaining wealth for future generations
Investor Guide January 2012

“Take control of who benefits from
the estate you’ve worked so hard,
all your life, to create.
”
IMPORTANT INFORMATION
This document constitutes a financial promotion pursuant to
section 21 of the Financial Services and Markets Act 2000 and
is issued by Foresight IHT LLP of ECA Court 24-26 South Park,
Sevenoaks Kent TN13 1DU on behalf of Foresight Group CI Limited
(“FG CIL”) PO Box 156, La Plaiderie House, La Plaiderie, St Peter
Port, Guernsey GY1 1WF. Foresight IHT LLP is an appointed
representative of Porta Verde Financial Services Limited of
25 Watling Street, London, EC4M 9BR which is authorised and
regulated by the Financial Services Authority. Porta Verde
Financial Services Limited has approved this financial promotion.
Your attention is drawn to the risk factors set out on page 10 of
this document. The service illustrated within this promotion is
provided by FG CIL, a Guernsey based entity. Should you decide
to proceed, your agreement and any provision of services will
be between you and FG CIL. Nothing in this document should
be regarded as constituting legal, taxation, investment or other
advice and prospective investors are advised to consult their own
professional advisers before contemplating any investment. Any
decision to invest in this product should be made on the basis of
the information contained in this guide. For further information
on our terms of business, please see our Application Form and
the relevant Customer Agreement. Any reference to tax laws or
levels in this document is subject to change. Past performance is
not a guide to future performance and may not be repeated. The
value of shares can go down as well as up and you may not get
back the full amount invested. You should consider an investment
in this product as a long term investment. This document does
not constitute and may not be used for the purposes of an offer
or invitation to any person in any jurisdiction outside the United
Kingdom. This document and the information contained in it are
not for publication or distribution to persons outside the United
Kingdom. This promotion does not constitute a public offering in
the UK. Foresight IHT LLP has taken all reasonable care to ensure
that all the facts stated in this document are true and accurate in
all material respects and that there are no other material facts
or opinions which have been omitted where the omission of such
would render this document misleading. The information in this
document was produced in January 2012 and may not be current.

Contents
PAGE
n WELCOME 3
n LOOKING AFTER THE NEXT GENERATION 4
n FORESIGHT INHERITANCE TAX SOLUTION 5
n A COUPLE OF CASE STUDIES 7
n UNDERLYING INVESTMENTS 9
n THE RISKS 10
n THE CHARGES 11
n WHAT NEXT? 12
n DEFINITIONS 13

Welcome
One of the UK’s leading managers of tax-efficient
investments in infrastructure and renewable energy
Welcome to Foresight Group, one of the UK’s most experienced
managers of tax-efficient investments. We have spoken with
independent financial advisers, accountants, lawyers and
investors about what they are looking for in inheritance tax
planning. With their input and feedback we have created a
flexible and transparent Inheritance Tax Solution that is simple,
swift to implement and designed to leave you in control of
your money.
03 FORESIGHT INHERITANCE TAX SOLUTION
Our approach uses Business Property Relief (BPR), and we will
select investment opportunities using our infrastructure sector
expertise which offer a risk/reward profile that has capital
preservation as its priority while also aiming to deliver modest
investment returns.

Looking after the next generation - protecting
your assets for your family
A solution that is fast, flexible and which leaves you in control
The prospect of giving up a proportion of your
hard-earned assets to HM Revenue & Customs on your
death is not something many people relish. Having paid
tax throughout your life on your investments and savings,
it can be galling for your beneficiaries to suffer an
Inheritance Tax (IHT) demand on the estate you have
worked so hard to create.
So planning for IHT is something that everyone should
consider and the greater your assets the greater
the need.
The existing £325,000 tax-free threshold on estates offers
some respite, however, this is frozen until 2015 and the rise
in property prices over the last 20 - 25 years has taken many
more people’s estates above this threshold, in which case
there could be an IHT liability and a resultant demand from
HM Revenue & Customs on any balance.
There are several ways for people to minimise IHT liability,
such as the use of trusts. But whereas trusts can take several
years to be fully effective and can mean giving up control of
and access to your assets, we wanted to create a flexible and
transparent solution that is simple, swift to implement and
which leaves you in control of your money.
“Foresight ITS will invest your money into one or more
limited companies which will aim to invest in assets with
a low risk profile and where capital preservation is key.
We understand that many people want to shelter their
investment from inheritance tax first and foremost. In this
regard we do not take undue risks with investors’ money.”
Bernard Fairman Chairman of Foresight Group
FORESIGHT INHERITANCE TAX SOLUTION
04

Foresight Inheritance Tax Solution
Giving investors a shelter from inheritance tax after a period of two years
from the date of investment
Foresight has developed Foresight Inheritance Tax Solution
(Foresight ITS), an investment structure designed to provide
investors with a shelter from inheritance tax after a period of
two years from the date of investment.
Foresight ITS is designed to give investors the benefit of BPR.
BPR is a relief from inheritance tax provided for investing in
trading companies whose shares are not listed on the main
stock exchanges worldwide. Foresight ITS investors appoint
Foresight to invest in BPR qualifying companies on their
behalf in order to achieve an inheritance tax exemption for
their investment after two years.
The minimum investment in Foresight ITS is £50,000 and
there is no maximum. You can make additional contributions
of £10,000 or more at any time, but remember each “top up”
will take two years to become exempt from inheritance tax.
And if your circumstances change, and you need to withdraw
any of your investment, this can be arranged, although it will
affect the amount you have shielded from inheritance tax.
The minimum withdrawal is £1,000.
The infrastructure opportunity
Foresight ITS will invest your money into one or more
limited companies which will aim to invest predominantly
in infrastructure assets with a low risk profile and where
capital preservation is key. We understand that many people
want to shelter their investment from inheritance tax first
and foremost – in this regard we do not take undue risks
with investors’ money (see page 9 for more details on the
investment process).
Speaking technically...
Foresight ITS is a discretionary investment management
product governed by English Law and managed by Foresight,
a Guernsey company licensed by the Guernsey Financial
Services Commission to carry out controlled investment
business. It is not a collective investment scheme. Foresight
will manage your investment on a discretionary basis in
the manner set out in this document and in the Customer
Agreement. Investments acquired with your monies will,
through an intermediate investment vehicle, be allocated to
you. Your investments will be represented by an allocation
of specific underlying shares rather than an interest in a
collective investment pool. Should you wish to obtain income
from your investment, such income will derive from the
realisation of an appropriate proportion of your allocated
investments. However, there may be tax consequences
from such a withdrawal but we will seek to make withdrawal
distributions in a tax-efficient manner.
05 FORESIGHT INHERITANCE TAX SOLUTION
Targeted Returns – Reinvestment or income
With capital preservation as the top priority, we aim to invest
in assets which will deliver a modest annual return to counter
any inflationary pressure which can erode capital value over
time. Since we always aim to put our investors first, you will
take the first 3% of all annual returns on your investment in
full. Foresight will take its 2% annual management charge
only once this 3% per annum threshold is reached, and this
will be taken from the next 2% of any annual returns. Beyond
that, any return above 5% will be shared between you and
Foresight. What’s more, returns will be calculated on the basis
of the gross amount invested before the initial charge of 5.5%
is deducted. (For full details of charges see page 11).
You can choose to take returns as income or to reinvest for
growth. If you have sufficient income from other means, you
can maximise the shelter from inheritance tax by choosing
to reinvest. But you can also derive an income from
your investments.
You can opt to receive income monthly, quarterly, every six
months or annually by drawing down on your investment.
Foresight will seek to ensure that income is distributed in a
tax-efficient manner. However you will lose the IHT shelter on
any funds withdrawn since this will reduce the size of your
investment. If there is a market for your shares at the time
you are due to receive your income, we will arrange for the
sale of sufficient of your shares to generate the income. Such
a return will be taxed as a capital gain. If we have to fulfil
income requests by arranging for share buy backs then any
surplus above capital invested will be taxed as income and not
capital gains.
If you choose to reinvest, returns will be rolled up within your
investment and the increase in your investment will be taxed
only if and when you make a withdrawal. This would normally
be taxed as a capital gain; however, if, in order to achieve
that withdrawal we have arranged to buy back some of your
shares any surplus above capital invested will be taxed as
income and not capital gains. If this growth is left in Foresight
ITS until death, it is not subject to capital gains tax at
this point.

Liquidity and other options
We will aim to make investments within two weeks of receipt
of your application and funds. This ensures the two year
inheritance tax exemption period starts quickly.
Foresight ITS is designed such that you can ask for your capital
at any time in writing and we will aim to get funds to you within
15 business days after receipt of the written request. However,
there is no guarantee that you will be able to access your
investment in that timescale. In particular if we are arranging to
sell any of your allocated assets to satisfy withdrawal requests
then there could be a considerable delay in returning monies.
After the two year holding period, you may decide to transfer
your investment into a discretionary trust. If you are confident
that you do not need access to the capital, a trust lets you
elect to receive a level of income every year. In addition, by
gifting into a trust you avoid the investment being tied up in the
sometimes lengthy probate process. After seven years in the
trust, the investment could be transferred into other assets.
You should seek expert advice from a tax specialist before
setting up a discretionary trust.
Foresight Inheritance Tax Solution
“Infrastructure businesses present an ideal risk/return
profile where reliable yield and asset cover are important.
We are pleased that we are now able to offer these
investment opportunities, which we have been accessing
for a number of years, to investors wishing to protect their
wealth from inheritance tax.”
Jamie Richards Head of Infrastructure, Foresight Group
FORESIGHT INHERITANCE TAX SOLUTION
06

How it works - a couple of case studies
How Foresight Inheritance Tax Solution will shelter your assets
from IHT
Mrs Gethin’s estate comprising house, investments and savings amounts to £1,350,000 of which her house is
worth £750,000
Her estate would be liable to an Inheritance Tax bill of £410,000
if she does nothing. She decides to invest in Foresight ITS and
after holding the investment for two years, that investment
within Mrs Gethin’s estate, which for illustrative purposes is then
valued at £350,000, is added to the tax free threshold of
Estate without Foresight ITS Estate with Foresight ITS
£325,000 leaving the balance of £675,000 in her estate liable
to IHT – a bill of £270,000, which is a saving of £140,000. Mrs
Gethin can withdraw money from the investment in Foresight
ITS should she so wish before she dies although the IHT shelter
would continue to apply only to her remaining investment.
House £750,000 House £750,000
Stocks and Shares £450,000 Stocks and Shares £100,000
Foresight ITS (held for 2 yrs) £350,000*
Cash £100,000 Cash £100,000
Other Assets £50,000 Other assets £50,000
Total Estate £1,350,000 Total Estate £1,350,000
Taxable Estate £1,025,000 Taxable Estate £675,000
IHT demand at 40% £410,000 IHT demand at 40% £270,000
Residual Estate £940,000 Residual Estate £1,080,000
07 FORESIGHT INHERITANCE TAX SOLUTION
Saving £140,000 *
Mr Clark’s estate comprising house, investments and savings amounts to £750,000 of which his house is worth £325,000
His estate would be liable to an Inheritance Tax bill of £170,000
if he does nothing. He decides to invest in Foresight ITS and
after holding the investment for two years, that investment
within Mr Clark’s estate, which for illustrative purposes is
then valued at £275,000, is added to the tax free threshold of
Estate without Foresight ITS Estate with Foresight ITS
£325,000 leaving the balance of £150,000 in his estate liable
to IHT – a bill of £60,000, which is a saving of £110,000. Mr
Clark can withdraw money from the investment in Foresight
ITS should he so wish before he dies although the IHT shelter
would continue to apply only to his remaining investment.
House £325,000 House £325,000
Stocks and Shares £275,000 Stocks and Shares -
Foresight ITS (held for 2 yrs) £275,000*
Cash £100,000 Cash £100,000
Other Assets £50,000 Other assets £50,000
Total Estate £750,000 Total Estate £750,000
Taxable Estate £425,000 Taxable Estate £150,000
IHT demand at 40% £170,000 IHT demand at 40% £60,000
Residual Estate £580,000 Residual Estate £690,000
Saving £110,000 *
*Any IHT saving will be dependant on the performance of the investment and these case studies are not a forecast of performance
It is important that you read and fully understand the risks involved with an investment of this nature to decide
whether it’s right for you. The value of an investment may go down and you may not get back the full amount
invested. There is no guarantee that any targeted return will be achieved. Tax regulations are subject to change.
Please note that all facts and figures are correct as at the date of this document.

“The hardest thing in the world to
understand is the Income Tax. The
second hardest is Inheritance Tax.
”
Albert Einstein
FORESIGHT INHERITANCE TAX SOLUTION
08

Underlying investments
Infrastructure businesses can have a number of attractive characteristics
for investors
Our aim is to invest into one or more companies which qualify
for Business Property Relief and where risks can be minimised
as far as possible with a view to preserving investors’ capital
at all times. In addition, we seek to provide a modest return on
investment where we the managers are only paid once we have
achieved a 3% pa return on your gross investment.
How do we invest?
Foresight ITS will invest your money directly into one or more
companies which are managed by Foresight on behalf of
Foresight ITS investors. In return for your subscription, you
will be issued your own allocation of shares in one or more
such companies which will corrolate solely to your underlying
investments. It is the value of these shares which becomes
free from inheritance tax after a holding period of two years.
Foresight ITS investors are the only shareholders in these
companies and, as such, investors’ interests are aligned towards
the mitigation of risk in the company(ies) and obtaining BPR.
This strategy enables the managers of Foresight ITS to invest
predominantly in those companies offering infrastructure assets
that are low risk for capital preservation but that also offer
modest growth.
We believe infrastructure is an ideal sector for those seeking
long-term contracted income streams allied to excellent asset
cover and we will be targeting predominantly secondary PFI
projects and operational ground-based solar photovoltaic
assets within this sector. Infrastructure also includes roads,
utility networks and public buildings and extends to a range
of services with infrastructure characteristics such as street
lighting, recycling centres, energy efficiency contracting and
onsite power plants, many of which share similarities with the
PFI model.
09 FORESIGHT INHERITANCE TAX SOLUTION
Infrastructure businesses can have a number of attractive
characteristics for investors including:
• long-term contracts with Governmental or blue-chip
counterparties;
• protection from competition, because of natural monopolies,
regulation or concessions granted by public authorities;
• inflation-linked revenues over 10-50 year contract
durations; and
• barriers to entry because of high capital costs.
Infrastructure investments are expected to achieve a
combination of stable and predictable cashflows; low correlation
to economic, business and market cycles and relatively low
default rates.
At Foresight Group, we are able to source infrastructure
opportunities through our network of contacts, built over
many years from working in the sector. Our team also has
a good understanding of the regulatory environment and
effective investment structures to mitigate risk.
Whilst we expect to invest predominantly in the infrastructure
sector, other sectors with a similar risk profile will also
be considered for Foresight ITS.
“I have always found the team at Foresight Group to be
professional, investor friendly and approachable. The
Foresight ITS is a useful addition to an adviser’s armoury
which will appeal to investors looking for an inheritance
tax shelter.”
Nigel McTear Blueprint Distribution IFA

The Risks
How do we invest?
• This investment product may not be suitable for all
investors and potential investors are recommended to seek
independent tax and financial advice before making an
investment in Foresight ITS. In particular, an investment in
Foresight ITS is designed to be held for the long term, as
investments in BPR qualifying companies have to be held for
at least two years (and held at the date of death) in order to
benefit from inheritance tax relief. If you sell/withdraw any of
your holding after two years, you will lose the IHT exemption
on the amount withdrawn and retain exemption only on your
remaining investment. Under financial services legislation,
Foresight is unable to provide you with advice about whether
this product is suitable for you.
Performance
• As the level of capital gains and income that will be generated
by the trading companies in which you will invest will depend
on the underlying performance of the infrastructure assets of
these trading companies, Foresight Group does not guarantee
any targeted level of returns.
• The value of an investment in Foresight ITS may fall as well as
rise and investors may not get back the full amount invested.
In the event that the value of an underlying asset of a
company in which you invest is adversely affected, it may not
be possible for that company to recover all of the money that
has been utilised and investors may therefore lose some or all
of their investment.
Qualifying Companies / Liquidity
• While Foresight ITS will target investments in companies
which are reasonably believed to qualify for Business
Property Relief, Foresight Group cannot guarantee that any
investment will remain a qualifying investment at all times.
• In certain circumstances, a company in which Foresight ITS
invests may take out insurance to mitigate particular risks
that they are exposed to but in the unlikely event that the
insurer becomes bankrupt or for any other reason does
not pay a claim, investors could lose some or all of
their investment.
• Investments in unquoted companies, by their nature, will
have very limited liquidity compared to companies listed, for
example, on the London Stock Exchange.
• Although investments in Foresight ITS are intended to be
readily realisable, there is no guarantee that income will
be paid when requested or that investment monies will be
returned within 15 business days after receipt of the written
request. Factors such as difficulties in realising underlying
investments, a higher than anticipated volume of requests
for withdrawal and changes in legislation may all result in
Foresight ITS having insufficient liquidity to provide income
or satisfy withdrawal requests, and the process for returning
monies could be much longer than anticipated.
Tax Reliefs
• To obtain the tax reliefs set out in this Investor Guide,
the executors of an investor’s estate will need to
complete and file the necessary probate returns for
assessment by HMRC and no guarantee is made that
any such assessment will result in relief being granted.
• The past performance of investments made by
Foresight Group are not a guide to the future
performance of Foresight ITS.
• Rates of tax, tax benefits and allowances described in
this Investor Guide are based on current legislation and
HM Revenue & Customs practice which may change from
time to time and are not guaranteed.
Alignment of interests
• Companies in which Foresight ITS invests might deal
with entities in which the Foresight Group and funds
managed by Foresight Group are interested including as
shareholders or lenders. All decisions made by Foresight
for investors in the Foresight ITS will comply with the
objectives of the Foresight ITS however, the outcome of
those decisions may, on occasion, be more beneficial to
one or more affected persons than others. Foresight has
protocols in place to manage such conflicts whenever
possible. Foresight Group will also receive arrangement
fees and monitoring and similar fees in relation to
such entities.
It is important that you read and fully understand
the risks involved with an investment of this nature
to decide whether it’s right for you. The value of an
investment may go down and you may not get back the
full amount invested. There is no guarantee that any
targeted return will be achieved.
Tax regulations are subject to change. Please note
that all facts and figures are correct as at the date of
this document.
FORESIGHT INHERITANCE TAX SOLUTION
10

11
The Charges
A transparent charging structure with annual fees triggered only once
the 3% annual return for our investors is achieved
Investments in Foresight ITS are subject to an initial charge
of 5.5% in favour of Foresight which will be deducted from
the amount invested. Introducing intermediaries will be entitled
to a commission of 3%, deducted from the initial charge, and
annual trail commission of 0.5% per annum of, and from, the
amount invested.
At Foresight Group we aim to put our investors first at all times.
In this respect, investors in Foresight ITS must receive priority
cumulative 3% annual returns every year, such returns to
be calculated against gross funds invested before Foresight
charges an annual management charge. Foresight will take a
cumulative annual management charge of 2% per annum from
annual returns above 3% up to 5%. Beyond that, ie for returns
above 5%, returns will be shared equally between investors and
Foresight as illustrated in the table opposite.
In any year where returns are not sufficient to meet these
priorities, both the Investor target return of 3% and Foresight’s
annual management charge of 2% will be accrued, to be paid
only when performance allows in future years.
By “annual returns” we mean the income (excluding capital
growth) credited to the Portfolio of each investor in the Foresight
ITS, calculated by Foresight. Foresight’s annual management
charge will be payable within one month of the relevant
period end.
FORESIGHT INHERITANCE TAX SOLUTION
Annual Return Allocation to
Investor
Management
Charge
1.0% 1.0% 0.0%
2.0% 2.0% 0.0%
3.0% 3.0% 0.0%
4.0% 3.0% 1.0%
5.0% 3.0% 2.0%
6.0% 3.5% 2.5%
On withdrawal of all or any part of an investment in Foresight ITS
(including payment of income), Foresight will charge a dealing fee
of 1% of the amount withdrawn.
Foresight Group will be entitled to a performance incentive on
any withdrawal by an investor (including income payments)
equal to 50% of the capital increase in the value of the gross
investment so withdrawn. This incentive will only be payable to
the extent the total return of the investor on the investment so
withdrawn exceeds the cost of the investment (net of the initial
charge) plus the 3% annual return from the date of investment
to the date of withdrawal.
Foresight will ensure that the annual expenses of the Foresight
ITS are capped at 3.2% of the value of the investments in the
Foresight ITS. A full breakdown of these annual expenses (which
exclude underlying investments, stamp duty and Foresight’s
enhanced annual management charge if triggered) is shown
in clause 6.8 of the accompanying Customer Agreement and
Application Form document.

What Next?
How the investment process works...
1. Mr Armitage completes the Application Form and sends it to Foresight with a £100,000 cheque
2. Foresight processes the application form and places the £100,000 into a client bank account, please note interest is
not paid on this money.
3. When the money has cleared, Foresight will invest Mr Armitage’s £100,000 into shares in one or more Business
Property Relief (BPR) qualifying companies. Foresight notifies Mr Armitage of the investment date which is the start
date for the two year minimum holding period
4. After the two year minimum holding period, which starts from the date when Mr Armitage receives his shares,
Mr Armitage’s investment becomes an exempt asset for inheritance tax purposes.
5. Four years later, Mr Armitage sadly passes away. His financial adviser, Mr Potts, sends a notification of death to
Foresight and requests a valuation as at the date of Mr Armitage’s death.
6. The executors of Mr Armitage’s estate complete form IHT 412 which includes details of his Foresight ITS investment,
and send this to HM Revenue & Customs as part of the probate process. HM Revenue & Customs review the
information and assess whether Mr Armitage’s investment qualifies for BPR. Once this is confirmed,
Mr Armitage’s investment in Foresight ITS is exempt from IHT calculations on his estate.
Investors who choose to invest in the Foresight ITS will need to complete an Application Form and accept the Customer
Agreement whereby Foresight Group CI Limited is appointed as their discretionary manager. Foresight ITS is an unregulated
English product. Foresight Group CI Limited is a company incorporated in Guernsey that is licensed and regulated by the
Guernsey Financial Services Commission to conduct controlled investment business.
Death and taxes may be inevitable, but they
shouldn’t be related.
J.C. Watts, Jr.
FORESIGHT INHERITANCE TAX SOLUTION
12

Definitions
In this Investor Guide the following defined words and phrases are used:
“Affiliate” Any body corporate or entity directly or indirectly controlled by Foresight and any member
or director thereof;
“Application Form” The Application Form approved by Foresight as an application form for the Foresight ITS;
“Customer Agreement” The Foresight ITS Customer Agreement between an investor in the Foresight ITS and
Foresight;
“Foresight”, “us”, “we” or “our” Foresight Group CI Limited, a company registered in Guernsey under company number 51471
and with its registered office at La Plaiderie House, La Plaiderie, St Peter Port,
Guernsey GY1 1WF;
“Foresight Group” Foresight and its Affiliates;
“FSA” Financial Services Authority;
“Portfolio” Your portfolio of investments (including any uninvested cash) within the Foresight ITS which
are managed in accordance with the investment policy as described in this Investor Guide;
“you or your” References to ‘you’, ‘your’ shall be in respect of you, the investor,
or your executors, if applicable.
13 FORESIGHT INHERITANCE TAX SOLUTION

Definitions
Intaxication (n.): Euphoria at getting a tax
refund, which lasts until you realise it was
your money to start with.
FORESIGHT INHERITANCE TAX SOLUTION
14

Foresight Group
Foresight Group CI Ltd.
PO Box 156,
La Plaiderie House,
La Plaiderie,
St Peter Port,
Guernsey, GY1 1WF
www.foresightgroup.eu
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