Reducing Inheritance Tax Tip with Business Property Relief

You may not know this but if you own a business, or an interest in a business, your estate may be entitled to relief from Inheritance Tax (IHT).

This form of tax relief reduces the value of a business or business assets in the calculation of your IHT liability. If you’re claiming after someone’s death, BPR can be claimed by the executor of the Will or administrator of the estate when working out its value.

Here are the steps you’ll need to follow:

• Work out the value of the business and/or its assets.
• Decide whether the business qualifies for 50% or 100% BPR. If you’re not sure, your solicitor, accountant or a financial adviser should be able to assist.
• If the estate qualifies for 100% BPR, you don’t need to do anything else.
• If the business and/or assets qualify for 50% BPR, you’ll need to get your inheritance tax reference number from HMRC, either by applying online or by post. You’ll need this three weeks before making a payment.
• Fill in both a form IHT400 and schedule IHT413 and submit them to HMRC.
• Pay any inheritance tax owed within six months of the death.

Talk to My Estate Online and we can put you in touch with a professional who can advise on Business Property Relief