Since the introduction of Business Property Relief in the 1976 Finance Act, hundreds of thousands of family-run businesses have been passed on to descendants free of inheritance tax.
Now simply called Business Relief (BR), this facility allows qualifying business assets to be passed to beneficiaries with either 50% or 100% relief from inheritance tax.
Qualifying assets include all trading businesses, commercial forestry and farming, and certain companies quoted on AiM.
Tax Efficient Legacy Planning
Alongside Business Relief, our services utilise other aspects of primary legislation which can help to defer or reduce capital gains tax liabilities. The careful design of our services allows investors to not only benefit from tax efficiency, but also to enjoy the growth and income potential of the underlying investments – providing flexibility and choice, while keeping control of their capital.
Business Asset Rollover Relief (BARR)
Business Asset Rollover Relief enables someone to defer any Capital Gains Tax liability arising from the disposal of a business or trading asset. If the proceeds are used to acquire other assets costing the same as, or more than, the amount received on a disposal of the old assets, the relief allows the individual to postpone paying Capital Gains Tax until the disposal of those new assets.
If new assets are acquired for less than the amount received on the disposal of the old assets, partial relief will be available.
You must acquire the new assets, or enter into an unconditional contract for the acquisition of the new assets, in the period twelve months before, and three years after the disposal of the old assets.
Replacement Provisions
When selling a trading business, if the proceeds are invested in Business Relief qualifying assets within three years then full inheritance tax relief can be maintained, with no two-year qualifying period.
Entrepreneurs’ Relief
Entrepreneurs’ Relief is available to sole traders or partners who are selling or giving away part or all of their business. It is available to company directors and employees owning 5% or more shareholding. This means capital gains tax reduces to 10% on all gains on qualifying assets.