Business Relief
Full IHT relief after two years (as long as held at date of death) by investing in BR qualifying companies
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Business Relief as an estate planning solution
Business Relief (formerly Business Property Relief) is an established relief from Inheritance Tax. By investing (purchasing shares) in a company that qualifies for Business Relief, you could potentially reduce your Inheritance Tax liability.
This is contingent on the type of business asset and how long you own the shares for. Shares in Business Relief qualifying companies, if held for a minimum of two years, and at time of death, should be eligible for 100% Inheritance Tax relief.
BR qualifying companies you could hold shares in
You can be a minority owner shareholder in a business and benefit from Business Relief
Unlisted companies
Shares in unlisted companies, which are not traded on a public stock exchange, often qualify for Business Relief
AIM-listed companies
Shares in AIM-listed companies, part of the Alternative Investment Market (AIM), can also qualify for Business Relief, providing a unique opportunity to invest in smaller publicly listed companies, with tax advantages
Why use Business Relief as an IHT solution?
100% IHT relief after two years while maintaining control of your assets
Faster tax benefits
Offers you eligibility for IHT relief after just two
years (as long as held at date of death)
Greater control
Allow you to retain access and control over your
assets (subject to liquidity)
Supporting UK business
By investing in Business Relief qualifying companies, you are directly supporting UK businesses, often these companies can be smaller or family-run enterprises
Business Relief investment solutions
Downing Estate Planning Service
The Downing Estate Planning Service looks to provide full IHT relief after two years by investing in Business Relief-qualifying businesses predominantly in two sectors: asset-backed trading businesses (such as care homes) and renewable energy & infrastructure.
Downing AIM Estate Planning Service
The Downing AIM Estate Planning Service looks to provide full IHT relief after two years. The Service looks to provide growth by investing in a diversified portfolio of 25-40 companies that are listed on the Alternative Investment Market (AIM).
Downing AIM ISA
The Downing AIM ISA Estate Planning Service looks to provide full IHT relief after two years. The Service looks to provide growth by investing in a diversified portfolio of 25-40 companies that are listed on the Alternative Investment Market (AIM). This is held in an ISA wrapper for further tax benefits.
Frequently Asked Questions
Below are a series of questions to help you to understand our product offering. If you have any additional questions, please contact us.
IHT is levied on your estate's value upon death. The current IHT charge stands at 40% for estate values exceeding £325,000, encompassing property, liquid assets, and other holdings after debts, such as your mortgage, have been settled.
Several allowances can help you to mitigate your IHT liability:
- Nil Rate Band (NRB): £325,000 per individual. This threshold allows tax-free asset transfer. Unused NRB can be transferred between spouses or civil partners, subject to specific conditions.
- Residence Nil Rate Band (RNRB): £175,000 (2027/28 tax year). Applicable to primary residences bequeathed to direct descendants.
The government introduced business relief in 1976.
It was originally set up to allow business owners to pass down their businesses to the next generation, IHT-free.
Business Relief has since been updated to include minority shareholders in qualifying businesses. These shares must be in unlisted UK trading companies, i.e. those not on a main stock exchange, or can be listed on the Alternative Investment Market (AIM) or NEX Exchange Growth Market.
To qualify for IHT exemption the Business Relief qualifying shares must be held for two years and at the time of death.
Downing’s estate planning solutions offer you the chance to invest in businesses that we believe qualify for Business Relief, allowing you to get inheritance tax relief on your investment.
Investing in estate planning solutions carry risks and are not suitable for everyone.
It's crucial to understand that estate planning solutions are not a one-size-fits-all approach. The suitability of these investments depends on individual circumstances, risk tolerance, and financial goals.
You need to to be comfortable with the fact that there are inherent risks involved with investing in business relief and we strongly advise that you seek professional financial guidance before committing your capital to any estate planning strategy.
Investment risks
The value of your investment can fluctuate. Shares in smaller companies can be harder to sell than in larger companies that are quoted on the stock exchange, and may fluctuate more too.
It's important to remember that past performance is not a reliable indicator of future results.
Business Relief and IHT relief risks
Business Relief, while an attractive proposition for IHT mitigation, comes with its own set of challenges. To qualify, you must hold eligible shares for a minimum of two years and continue to hold them at the time of death. However, the qualification is not guaranteed, but depends upon the company maintaining its qualifying trade status.
This overview is just an introduction to the risks associated with IHT solutions. Please refer to the product literature to fully understand the risks involved before you invest.
How to invest
It is important that both advisers and investors understand our products thoroughly, paying attention to any risks involved before investing. Our dedicated team is always on hand to answer any questions you may have.
Find the right product
At Downing we are committed to ensuring our investors are matched with the right product for them and encourage them to read our product literature thoroughly to understand the risks. We recommend investors seek professional financial advice before investing.
Speak to an adviser
At Downing, we are not able to provide financial advice. Investors should consult their financial adviser before making any investment. A financial adviser can help you to plan properly towards your financial goals.
How to invest with Downing
When investors are ready to invest, they and their adviser should complete the appropriate application form, which will be found on the relevant product pages (see above).
£5.5 trillion will pass between generations over the next 30 years, and that wealth transfer is set to rise to £100 billion by 2025
Wealth Transfer in the UK, Kings Court Trust, 2017
We're here to help
If you are a financial adviser or discretionary fund manager, and you want to discuss our IHT products and solutions, call 020 7630 3319 or email us at sales@downing.co.uk
If you are a private investor call 020 7416 7780 or email customer@downing.co.uk