Ethical Legacy Funds

This page is an incomplete work in progress about an idea I am researching and developing involving the creation and tax-efficient structuring of a private investment portfolio. I have named the investment model an ‘Elf’ which stands for ‘Ethical Legacy Fund’.

Introduction

Conceptually, an Elf is an FSA regulated and professionally managed family wealth fund set up during a person’s lifetime along with other investors (who  for example may be: family members; friends; business partners; co-workers, or members of an investment club), which enables them to:

  • purchase ESG Investments;
  • receive dividends during their lifetime;
  • exit by selling/gifting their share of the fund; and
  • make gifts of shares in the fund to a trust for the benefit of e.g. their children/grandchildren.

Following a founder’s death, his children as shareholders can use the fund as a clearing house for converting unwanted estate assets into cash to be re-invested in the fund.

Alternatively a founder can gift legacies of cash and assets to the fund, e.g. art and crypto assets.

Assets can be gifted or donated to the fund to either sell and invest the proceeds in the fund (i.e. by leaving a legacy in a will), or to apply for charitable purposes.

The structure will therefore include a charitable trust or a non-resident purpose trust.

I will also examine the special tax rules that apply to EBT’s.

The design will take account of the availability of the remittance basis of taxation for UK-resident non-doms (see my book Tax-Efficient Wills Simplified (2016), which is available from Amazon: https://www.amazon.co.uk/Tax-Efficient-Wills-Simplified-Carl-Islam-ebook/dp/B00R4RL1AA as a Kindle Book.

Ethical investment funds already exist, see: ESG and Islamic Finance collaboration could be major revenue boost for sustainable investment: report (responsible-investor.com)

See also:

  • my blog about the ‘Keystone Structure’ use the search on the blog to find:  http://blog.wealthplanning.tv/?p=102