Business Owners9 min read
Business Relief: Passing Your Company on Tax-Free
•By WePlan.Money
Entrepreneurs can often hand down shares with 0% IHT – if they meet two crucial HMRC tests.
What is Business Property Relief (BPR)?
BPR reduces the value of qualifying business assets for IHT by 50% or 100%.
The two-year ownership rule
You must have owned the shares for 24 months and the company must be a trading business (80% trading test).
Planning checklist before a sale
- Reinvest sale proceeds into another BPR-qualifying investment within three years to keep relief alive.
- Avoid holding > 20% excess cash; move surplus into working capital or BPR-friendly assets.
- Consider an Employee Ownership Trust – can retain BPR status.
⚠️ Warning: HMRC scrutiny has tightened – keep board minutes and management accounts demonstrating active trading.
Need Professional IHT Advice?
Our expert advisers can help you implement the strategies discussed in this article and develop a comprehensive inheritance tax plan tailored to your specific circumstances.