Business Relief (“BR”), formally known as “Business Property Relief” was first brought into Inheritance Tax legislation in 1976. At that time, its primary objective was to ensure that family-owned businesses could continue operating as viable trading entities after the owner/s had passed away, without the need for them to be sold, broken up or refinanced in order to satisfy an inheritance tax obligation. Over time, successive UK governments have grown to value the importance of encouraging people to invest in such trading companies, whether or not they are running the company themselves. 

BR has become an established tax relief for more than 40 years.  

Investments that are made in shares that qualify for BR can be passed on free from inheritance tax upon the death of the investor, provided that the shares have been owned for at least two years at that time. 

Investors should be mindful that investments in trading companies can go down as well as up and investors may not get their initial investment back. It’s worth noting that the availability and/or advantages of Business Relief may vary over time as it is subject to review and amendment by the UK government. As such, it’s important to regularly review the current rules and regulations surrounding Business Relief to ensure that it remains a viable option for reducing IHT liability as the value of tax relief depends on your individual circumstances.