Estate Planning - Is there any inheritance tax relief for businesses and their assets?
10th September 2013
Business property relief
More than £3 billion in inheritance tax (IHT) was paid in 2012/13, the largest in five years.
If your assets exceed £325,000, your legacy could be diminished by a 40 per cent tax charge.
How is the limit affected by your business assets?
Business property relief (which is not limited to bricks and mortar) applies to the assets of a sole proprietor’s business, the share of a partnership business, or equity in a company which is unquoted (including AIM listed companies). This means the assets will ordinarily be excluded from the calculation of your estate. The important distinction is that it cannot be primarily an investment business.
UK legislation also offers significant reliefs for agricultural property - even if it is farmed by others.
Both agricultural property and business assets can potentially be gifted tax-free if they have been owned for at least seven years.
If you are unsure if your business assets will qualify for Business Property Relief or if you think you will still exceed the limit, please discuss this with us.
Did you know an investment bond can be an excellent vehicle for bequeathing money almost tax-free?
For a wider overview of safeguarding your estate, please see our factsheet.
Don't forget to book your free advice session
We are offering free 45 minute advice sessions to anybody who is starting out in business and looking for some guidance.
This one day Business Surgery will be held at Preston Park House on Friday 13th September between 9.00am and 4.45pm.
For more information, click here.
If you or someone you know would like to arrange a session with us, please book here, but hurry, spaces are limited.