FAQ: what is CWIP?

What is CWIP?

CWIP is a package of advice looking at three areas:

Using IHT reliefs to make gifts: where possible, gifts which will be immediately exempt from an IHT charge when you die;
Creating a savings scheme that is tax-efficient and cost effective; and
Placing the savings scheme in an appropriate legal framework for your intended beneficiaries.

What do I get for my money?

You are buying advice, not a “product” as such. Our national providers are Alliance Trust Savings Limited (part of Alliance Trust plc) and National Savings & Investments (NS&I). We provide that advice once we have received and considered the information requested from you in stage 1.

CWIP comprises a mix of advice and investment recommendations. It is not intended as a complete financial advice service, neither is it a substitute for the personal service you should expect from a family solicitor. We will not draft a will for you as part of the CWIP package, neither will we advise you on your wider personal circumstances.

In return for your initial fee we will assess your personal IHT position from the information you return to us when you complete stage 2 of CWIP. Depending on how much money you wish to commit on an outright and/or regular payment basis, we will then make recommendations as to what we consider to be the most appropriate CWIP savings vehicle for you.

We will also advise on the use of the appropriate IHT immediate exemptions and let you have a document that confirms the setting up arrangement for the chosen beneficiaries. If we do not believe CWIP is suitable for you we will tell you.

Could I do this myself?

Yes. If you are a sophisticated investor, you could make the investment decisions yourself. You might need advice on some of the inheritance tax rules applicable and on the best way to document the trust we recommend. Detailed documentation for a bare trust will be given in stage 3 of CWIP.

What are the advantages of CWIP?

CWIP is a straightforward savings scheme where costs have been reduced to a minimum. With low interest rates and inflation still at historically low figures, the impact of costs on investment returns can be dramatic. CWIP is designed to minimise those costs and therefore to increase the potential for investment growth.

Are there any potential disadvantages of CWIP?

There are two. First, where an equity investment is made, the beneficiary may not receive the amount initially invested. Second, unless you use the bespoke service, the beneficiary will become immediately entitled to the investment. As the investment will belong to the beneficiary from the moment it has been given, it is not protected from outside events, particularly the death, divorce or bankruptcy of the beneficiary.