Avoid Tax on your Business

It is very galling to think that the business you have spent years creating might be destroyed by the operation of Inheritance Tax at 40%. Fortunately a properly written Will can let you pass on your family business without the impact of the tax - and with the potential to save tax on other parts of your estate too.

Currently a qualifying business asset can be passed on with 100% relief from Inheritance Tax. This is normally referred to as Business Property Relief (BPR), or Agricultural Property Relief (APR) for farming assets.

If a business is simply passed to a spouse it wastes the benefit of this relief (since spouses can inherit everything without paying tax), and may be liable to the tax as and when the spouse dies later. However, by leaving the business to a suitable Trust your estate gains the advantage of the tax relief whilst continuing to make the income of the business available to your spouse and other beneficiaries

Some assets currently only receive 50% relief, but the benefit of this can also be exploited in a properly written Will. However, which assets qualify for 100%, 50% or no relief may be affected by actions that you are just about to take - so take advice from InHouse Wills & Probate now, before you do anything else.

Two Bites of the Cherry

In certain situations a couple can exploit the benefit of BPR twice-over. This might allow you to pass on all of a large joint estate whilst paying little Inheritance Tax - and maybe even paying none at all. This needs careful planning, with input from InHouse and other qualified professionals - contact us for a detailed discussion of your personal situation.