Inheritance tax is often named as one of the UK’s most hated taxes. While there are a number of ways to reduce your eventual tax bill, many people are unaware of business property relief.
Business property relief allows relief from inheritance tax at a rate of 50% or 100% on certain business assets.
You can get 100% business relief on a business or interest in a business, while 50% relief is available on:
- shares controlling 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 were a partner in or controlled;
- land, buildings or machinery used in the business and held in a Trust that it has the right to benefit from.
It’s important to remember that you can only get this relief if the person who has died owned the business or asset for at least two years before they passed away. You also can’t claim business relief if the asset is not needed for future use in the business.
What’s more, business assets can actually be given away while the owner is still alive and qualify for business relief. However, certain criteria needs to be met – for example, the recipient must keep them as a going concern until the death of the donor.
Clearly, timing is extremely important when it comes to business property relief, so plans should ensure it’s available at the relevant time.
Jim Emsley from E.L.M Legal Services said: “Business property relief can make a huge difference to the eventual inheritance tax bill of your loved ones and can also help with succession planning. But it requires careful planning in order to ensure it is available when you need it. Dictating exactly what happens to your assets after you die is incredibly important, whether you own a business or not, and a Will is the best way to do that. It is a terrific way to reduce the uncertainty and upset your loved ones face after you pass away.”
Make A Free, No Obligation Enquiry Now
To speak with one of our specialist Wills & Probate Lawyers, please call us now on 0117 952 0698 or Make A Free Will Enquiry and we will discuss your current circumstances with you and explain all available options available to you.