Business Property Relief: Reducing Inheritance Tax on Business Assets

Business Property Relief: Reducing Inheritance Tax on Business Assets

Business Property Relief (BPR) can be a lifeline for business owners in England and Wales, offering the chance to reduce Inheritance Tax by up to 100% on certain business assets. With the right planning, you can help ensure your business legacy is protected for the next generation.

What Qualifies for BPR?

BPR is available on a range of business interests, including unquoted shares in private companies, shares listed on AIM, land and buildings used in a business, and assets held by sole traders or partnerships. To qualify, you must have owned the asset for at least two years, and the business must be actively trading—not simply holding investments.

How Much Relief Can You Get?

• 100% relief is available for unquoted shares and partnership interests.

• 50% relief may apply to certain quoted shares and to land, buildings, or plant used in the business.

Common Pitfalls

It’s important to be aware that not all business assets will qualify. If your business holds too much cash or focuses on investment activities, you could lose out on relief. Different share classes can also affect eligibility, and let property may only attract partial relief.

Planning for the Future

To make the most of BPR, start planning early. Review your business structure and assets regularly, and consider using trusts as part of your succession plan. Keeping clear records and staying up to date with the rules will help you secure the best outcome for your estate.

BPR rules can be detailed and do change over time, so regular reviews are essential to keep your plans on track and your business protected.

Feel less anxious and more confident:
Caira is your new bestie! 👱🏼‍♀️🌸 Get answers and drafts in seconds for public, family, probate, conveyancing, criminal, employment, medical negligence, commercial and public law. All backed by 10,000 legal documents for England and Wales.

Upload documents, screenshots and photos for even more relevant responses. Free 14 days trial in 1min – no credit card required, afterwards just £15/month on our website. Continue chatting now. https://www.unwildered.co.uk

Disclaimer: This blog post provides general information for educational purposes only. It is not legal advice. Outcomes can vary based on your personal circumstances.