1. Business assets must have been owned by the donor for two years to qualify for Business Relief. The business in respect of which a claim is made must also be wholly or mainly a trading company.
2. Investment companies and businesses dealing in shares, stocks, securities, lands or buildings do not qualify for Business Relief.
3. As a small business owner, the current law particularly benefits small businesses that are family owned trading companies. They will be most likely to qualify for Business Relief and make the most of the possible IHT saving.

• Business Relief can provide 100% relief from IHT on a sole trader’s business or partnership interests and can apply to shares in trading companies that are not quoted on a recognised stock exchange.
• There is no limit to the value of Business Relief which can be claimed.
• Shares quoted on the Alternative Investment Market can also be eligible for 100% Business Relief.
• Business Relief is also available on land, machinery, plant and buildings used for business purposes.

As a business owner with your own business assets value, you should be aware that inheritance tax (IHT) treated on your business is different from personal property. If you have a rental property business it will NOT qualify for Business Relief.

Trading companies normally get 100% Business relief while investment companies ( companies that hold rental properties) do not get any BR and the value of the assets are included in the shareholders estate for IHT.

There are several issues to consider and expert advice is essential when undertaking IHT planning with regard to business assets, especially in the context of a family run business. Points to consder are :

• It may be preferable for a donor to leave IHT-exempt assets to a Beneficiary, such as a Trust, other than their spouse or civil partner.
• There are no savings if business assets are passed to a Beneficiary who would not be liable for IHT. For example, a transfer of business assets qualifying for Business Relief to a spouse would achieve no IHT saving on that transfer because transfers between spouses are normally exempt from IHT in any event.
• No Business Relief is available where there is a binding contract for the sale of a business. This might occur where there are a small number of Shareholders who have a shareholders’ agreement which requires that, should one of them die, their Executors will sell his or her holding to the remaining shareholders, who are required to buy it.