What is Business Relief?
Business Relief, introduced by the UK government in 1976, is a relief that can reduce the value of a business or its assets when working out how much Inheritance Tax is payable on an estate. It is important to remember that any ownership of a business, or share of a business, must be included in the estate for Inheritance Tax purposes. Business Relief is also available to private investors who invest in qualifying businesses. Usually, any business assets need to have been held for a minimum of two years before death to qualify.
How much Business Relief can be claimed?
You can get 100% Business Relief on a business or interest in a business, as well as shares in an unlisted company. However, you can get 50% relief on:
How is Business Relief claimed?
When Inheritance Tax is due, the Executor or Administrator must complete form IHT400 (Inheritance Tax account). If the estate includes qualifying business assets, form IHT413 (Inheritance Tax: business and partnership interests and assets) must also be completed to claim Business Relief. These two forms are then submitted to HM Revenue & Customs as part of the estate valuation.
Please get in touch if you have any questions about Business Relief.
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