Business Relief and Beneficiaries: Can my family get my Essex business? Laura Richardson sets out the extent to which it is possible for Business Relief to be claimed upon a given business . . .

Any business or interest in a business that you own when you die becomes part of your Estate and, therefore, may be liable for Inheritance Tax. With Inheritance Tax set at a standard rate of 40%, it is clear to see why you may wish to ensure that your beneficiaries receive any tax reliefs that may be available to them! Thankfully, subject to meeting certain criteria your company, or interest thereof, may qualify for Business Relief from Inheritance Tax.

There are two categories of Business Relief, either 100% Business Relief meaning that there is no Inheritance Tax liability, or 50% Business Relief which means that the asset is only charged 50% of the Inheritance that would have been due without the Relief.

There are strict rules surrounding both categories of Business Relief however, in a nutshell, 100% Business Relief can be applied to qualifying unlisted companies, or shares thereof, that have been owned by the deceased for more than 2 years prior to their death.

In order to be a qualifying business for 100% Business Relief the business or shares thereof must abide by the following:

  • The business must be unlisted, meaning that it cannot be listed on any stock exchange.
  • The business must not deal primarily in stocks or shares, land or buildings, or in investment management.
  • The business cannot be a not-for-profit company.
  • The business is not being sold or wound up.

Providing these criteria are met, then under the current tax laws, your company can be passed on to your beneficiaries without any liability for Inheritance Tax because of the relationship between Business Relief and beneficiaries.

The regulations that govern the lower rate of 50% Business Relief are more wide-ranging. Dependent upon further strict criteria, this lower rate can apply to the inheriting of business equipment, machinery, and other business-related assets, as well as shares and ownership of listed companies.

Whether you believe your assets would be eligible for 100% Business Relief or 50% Business Relief, due to the complex nature of Business Relief regulations it is always advisable to discuss your personal situation with a specialist in this field of Law, such Andrew Douglas Wills & Legal Services. By consulting with one of our experienced experts, you can rest assured that your beneficiaries will receive the most possible inheritance from your Estate because we have an understanding of the relationship between Business Relief and beneficiaries. What’s more, at Andrew Douglas Wills & Legal Services we offer a free initial consultation, whether in Colchester or the surrounding areas of Essex, so why not call today?

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