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.

How to Claim Inheritance Tax Relief

IHT is charged at a rate of 40%, which can have a substantial impact on a business. However, if you own a business or assets that are used by a business that you are involved in, you may be able to claim relief from IHT at either 50% of 100% on the value of the business or assets. To qualify for the relief:

  • The business must have been owned by you, or had interest from you, for at least two years
  • The business must be an unquoted business that is wholly or mainly a trading business
  • There must not be an automatic contact for sale on the death of a shareholder contained in the articles associated with shares of 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, then the asset must be or partially be an unquoted trading business and must be controlled by the person owning the asset or be a partner in the business.

For information on IHT relief for a property, please visit our dedicated page.

Our team will help you understand where you stand and your options for reducing IHT for 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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