On 28 July, Octopus Investments temporarily paused applications and withdrawals across its Octopus Inheritance Tax Service, with an expected suspension of six to eight weeks. The stated reason is that Fern Trading, the unquoted company in which OITS investors hold shares, is progressing a transaction affecting part of its portfolio, and that until this settles a fair share price cannot be set.
On the surface this reads as routine, sensible investor protection. Look a little closer and it says something more important about how these Inheritance Tax Planning products work.
- The pause shows that Business Relief pricing is a valuation exercise, not a market price
Unlike an AIM-listed share, Fern Trading shares are not traded on any exchange. Their price is set periodically by Octopus itself, based on the value of the underlying businesses. Most of the time that produces welcome stability compared with volatile public markets. But it also means the price is only ever as reliable as the manager’s ability to value the business accurately at that moment. When a material transaction is in progress, that becomes impossible, and pricing must stop. This is not unique to Octopus. It is a structural feature of every unquoted Business Relief investment.
- How long really is “temporary” when it comes to a pause in withdrawals?
Six to eight weeks is Octopus’s honest estimate, and it may well prove accurate. But suspensions of this kind have a habit of outlasting their original timeframe, as anyone who held property funds through 2016 or 2020 will remember. Clients and advisers should plan around the possibility of a longer pause, not just the one initially quoted.
- This is precisely the liquidity gap we flagged a few weeks ago
Business Relief is often chosen because, after two years, it offers inheritance tax relief while remaining notionally more accessible than gifting or trusts. This pause is a useful, if unwelcome, illustration of the gap between accessible in principle and accessible when you need it.
An investor needing funds during this window, to meet an unrelated tax bill, care costs, or simply a change of plan, simply cannot get them, however flexible the product brochure made it sound. For clients who hold Business Relief investments as part of a wider estate plan, rather than as their only liquid asset, that gap may be manageable. For those who do not, it is not.
Final thought
None of this is a criticism of Octopus’s decision itself. Pausing dealing while price-sensitive information is unresolved would appear to be the responsible option. Arguably, this is better than allowing investors to buy or sell at a price nobody can currently stand behind.
The real message is broader. Every Business Relief investment carries some version of this illiquidity, and a sound estate plan built around it needs a genuine cash buffer sitting alongside, not a product that only looks liquid until the moment it matters.
Published on: 28.08.2026
Contact: Daniel Sperber at Coleshill Wealth Management
T: 01675 622 445
E: daniel@coleshillwealthmanagement.co.uk
The information contained in this blog is for information purposes only and does not constitute advice. Please seek financial advice before making any decisions. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is not a guide to future returns.
This content represents an opinion at the time of writing and should not be interpreted as financial advice. Rates, rules, and figures referenced may change over time and should be independently verified. Readers should seek personalised advice from an FCA-regulated adviser before acting on any information in this article.