Is the value of my business liable for Inheritance tax?

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This depends on the types of business you have. If the business is simply a trading business as are99% of all businesses and the shares are not publicly traded then Business Relief od 100% would apply on the death of a shareholder. i.e. no inheritance tax is payable. However be careful as the value would still be in your estate for probate purposes which if added to your personal assets the value exceeds£2 million you could lose  some or all of your residential nil rate band allowance.

If however the business is mainly an investment company (for example - a company which owns mainly rental properties) then Business relief would not apply and the whole value of the shares would be liable for inheritance tax.

If your company is both trading and holds investments the “ wholly and exclusively” rule would apply which is complex. Get advice and consider holding the investments separate from the trading company. This might be a good idea to protect the assets anyway.

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