LF quick comment from advisers on Octopus Investments suspending Octopus Inheritance Tax Service

Suspending withdrawals from an inheritance tax planning product is not a comfortable message to send to investors who are, by the nature of the product, often elderly and time sensitive. Octopus is making the right call because trading while a potentially price sensitive transaction is in progress would be worse, but this episode exposes the liquidity assumption at the heart of all Business Property Relief products. They are inherently illiquid investments sold as an IHT solution, and when the market pauses, there is no secondary market to fall back on. Anyone affected should review their wider estate planning position now and not bank on the eight week timeline holding. Transactions have a habit of taking longer than the press release suggests.

This is not evidence that Fern has failed, but it is a sharp reminder that an unquoted investment is not a bank account. Investors needing cash now cannot withdraw from OITS while the pause remains in place, currently expected to last up to six to eight weeks, creating real pressure for anyone without sufficient cash reserves elsewhere.

In principle, pausing is the responsible move. Allowing investors to buy or sell using a valuation that may shortly prove wrong could unfairly benefit one group at another’s expense. However, the transaction could move Fern’s valuation either up or down, so investors should not assume this is merely administrative.

The wider consequence is a suitability and liquidity wake-up call. Business Relief may remain unaffected, but access is never guaranteed. Advisers should identify clients with planned withdrawals, explain the uncertainty clearly and review whether too much of their wealth depends on assets that cannot always be sold on demand.