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Inheritance Tax Planning

Is my business factored into my estate for IHT purposes?

Q. I am the owner of a small but successful business and I expect that if I were to die shortly that my estate, including the value of my business, might be worth over the Inheritance Tax Threshold of £325,000. Am I right that the value of the business will be included in my estate for working out the value for Inheritance Tax purposes?

A. The answer to this depends on a number of factors concerning the business at the time of your death. If you can meet certain conditions, Business Property Relief (BPR) (which is a relief against the Inheritance Tax that would otherwise be due on the value of the Business) may be available at either 100% or 50%.

Broadly speaking, if you have owned the business or shares in the business for at least two years prior to your death then BPR will be available. There are however certain types of business activities and investments that are excluded from BPR, such as businesses that mainly deal in securities, stocks or shares, land or buildings or making or holding investments. It would be sensible to take some specialist advice about the position in your estate so that you can make provisions accordingly

If you would like further advice, please contact Andrea Beesley-Hewitt at Hegarty Solicitors on 01780 750952 or email andrea.beesley-hewitt@hegarty.co.uk

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