Business Relief for Inheritance Tax

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1. Overview

Business Relief reduces the value of a business or its assets when working out how much Inheritance Tax has to be paid.

Any ownership of a business, or share of a business, is included in the estate for Inheritance Tax purposes.

You can get Business Relief of either 50% or 100% on some of an estate바카라 사이트™s business assets, which can be passed on:

How to claim relief

As the executor of the will or administrator of the estate, you can claim Business Relief when you바카라 사이트™re valuing the estate.

You should fill in both:

You must use the market value of the business or asset when calculating relief at 50%.

You can claim relief on:

  • property and buildings
  • unlisted shares
  • machinery

2. What qualifies for Business Relief

You can get 100% Business Relief on:

  • a business or interest in a business
  • shares in an unlisted company

You can get 50% Business Relief 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

You can only get relief if the deceased owned the business or asset for at least 2 years before they died.

What doesn바카라 사이트™t qualify for Business Relief

You can바카라 사이트™t claim Business Relief if the company:

  • mainly deals with securities, stocks or shares, land or buildings, or in making or holding investments
  • is a not-for-profit organisation
  • is being sold, unless the sale is to a company that will carry on the business and the estate will be paid mainly in shares of that company
  • is being wound up, unless this is part of a process to allow the business of the company to carry on

You can바카라 사이트™t claim Business Relief on an asset if it:

  • also qualifies for Agricultural Relief
  • wasn바카라 사이트™t used mainly for business in the 2 years before it was either passed on as a gift or as part of the will
  • isn바카라 사이트™t needed for future use in the business

If part of a non-qualifying asset is used in the business, that part might qualify for Business Relief.

Example If you use one room in a building as a shop and the other rooms are used as your home, the shop will qualify for Business Relief but the rooms won바카라 사이트™t.

Relief for agricultural property

You may be able to get Business Relief on a transfer of agricultural property (eg farmland, buildings or farm equipment) which isn바카라 사이트™t eligible for agricultural relief.

3. Give away business property or assets

Someone can give away business property or assets while they바카라 사이트™re still alive and the estate can still get Business Relief on Inheritance Tax, as long as the property or assets qualify.

How to get Business Relief on a gift

If someone gives away business property or assets, the recipient must keep them as a going concern until the death of the donor if they want to keep the relief.

They can:

  • replace the property or assets - like machinery - with something of equal value if it바카라 사이트™s for use in the business
  • only get relief if the donor owned the business or asset for at least 2 years before the date it was given

When is a gift no longer liable for Inheritance Tax

Any gift made more than 7 years before the donor바카라 사이트™s death doesn바카라 사이트™t count towards their estate for Inheritance Tax purposes.

You may have to pay Capital Gains Tax or Income Tax if you sell, give away or exchange (바카라 사이트˜dispose of바카라 사이트™) an asset or property if it바카라 사이트™s gone up in value during the time you owned it.