Understanding the basics of Business Relief
29th November 2021
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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:

  • shares which control 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 controlled or were a partner in
  • buildings, land or machinery used in a business and held in a Trust that it has the right to benefit from

 

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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Peter W

Member since: 2nd August 2019

Hastings & Rother Legal Services Ltd offer a diverse range of legal services including will writing, power of attorney, funeral plans, estate administration and more. To speak with us or if you have any...

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