Protecting your Business from Inheritance Tax for the Next Generation

When you die your estate could be subject to Inheritance Tax at a rate of 40%. For those people who own businesses in which friends and family work, it could mean that your nearest and dearest would be left without a livelihood if the business had to be sold to pay the Inheritance Tax bill.

Whether you are looking to sell the business on retirement or whether you wish to plan for future growth, our private client team are here to work closely with you to ensure your objectives are achieved in the most tax-efficient and straightforward way. Contact us today to arrange a chat to understand how inheritance tax could affect your business and how we can help you put strategies in place now to ensure that your business can thrive for many years to come. Call 0345 872 6666, or contact us via our enquiry form.


Inheritance Tax relief

If you own a business or assets that are used by a business that you are involved with then you may be able to claim relief from Inheritance Tax at either 50% or 100% on the value of the business or assets.

To qualify for the relief, the interest in the business:

  • must have been owned by you for at least 2 years;
  • the business must be an unquoted business that is "wholly or mainly" a trading business;
  • there must not be an automatic contract for sale on the death of a shareholder contained in the articles of association in relation to shares in the business.

If the relief is being claimed for an asset owned outside of the company but used by the company, for example if you own the building the business operates from in your own name:

  • the asset must be being used wholly or mainly for the purpose of an unquoted trading business;
  • the company must be controlled by the person owning the asset;

OR

  • the person owning the asset must be a partner in the business using the asset.

Unsure if this applies to you? Our team will help you understand where you stand and your options for reducing Inheritance Tax relating to your business.


Exceptions to Inheritance Tax relief

Not all companies qualify for the relief. The most common type of business that does not qualify under this definition is a business that runs a buy to let portfolio. 

If your business is partly trading and partly investment property relief from inheritance tax may be denied on the whole value so it is important to structure the business correctly to ensure that you do not lose what could be a 100% relief from Inheritance Tax.


Get in touch today

Contact our knowledgeable team today to arrange a chat to understand how inheritance tax could affect your business and how our team can help you put strategies in place now to ensure that your business can continue for many years into the future. Complete our contact form or call 0345 872 6666.

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