Business Relief (BR) for Inheritance Tax (IHT) is available for individuals holding shares in unquoted trading companies and the rate of relief is currently 100 per cent.
There were significant changes to business relief announced in last year’s Autumn Budget, which will take effect from 6 April 2026, including a £1 million cap on 100 per cent relief for qualifying business assets and 50 per cent relief on the balance above the cap.
This £1 million cap is available per individual.
For married couples and civil partners, the transfer of assets between them is IHT free and on the second death, the Executors can transfer the unused spouse or civil partner’s IHT nil rate bands and utilise them.
However, any unused BR is not transferable, and if no action is taken to secure the deceased spouse or civil partner’s £1 million relief at 100 per cent, it will be lost.
In order to secure the £2 million of BR at 100 per cent, you can structure the Will to ensure £1 million of business assets qualifying for 100 per cent BR are transferred into a trust or other beneficiaries on the first death.
Please get in touch with us to ensure the correct share structure is in place and a Will is drafted to ensure up to £2 million of business assets are free of IHT.
