There are several types of reliefs from Inheritance Tax (IHT), one of which is IHT Business Relief. This can be a significant tax benefit for those with business interests, potentially offering either 50% or 100% relief from IHT on the value of business assets if certain criteria are met.
• 100% Business Relief can be claimed for a business, an interest in a business, or on shares in an unlisted company.
• 50% Business Relief is available for:
- Shares with more than 50% of the voting rights in a listed company.
- Land, buildings, or machinery owned by the deceased and used in a business they were involved with or controlled by.
- Land, buildings, or machinery used in a business and held in a trust benefiting from it.
This relief only applies if the deceased owned the business or asset for at least two years prior to their death.
However, there are limitations, for example, if the company primarily deals in securities, stocks, shares, land, buildings, or investments. In some situations, partial Business Relief might be possible.
Given its complexity, it is crucial to assess whether IHT Business Relief applies based on your specific circumstances. Our trusts and estates tax manager Matthew Hill is on hand to help, email him to discuss further.