Reliefs

Business or agricultural property may be eligible for IHT relief. The relief takes the form of a discount in the value becoming chargeable to IHT either on a lifetime transfer or on death. Availability of the relief is dependant on the property satisfying the definition of business or agricultural property and on having been owned for the necessary minimum period. The nature of the property will determine the rate of relief which will be either 100% or 50%. The rules are detailed and complex but we provide in the box right a brief summary of the requirements for the relief. In cases where 100% relief is available there is little incentive, from an IHT point of view, to make lifetime transfers of such assets. Additionally, no capital gains tax will be payable where the asset is included in the estate on death.

What will happen to any business or agricultural property included in your estate on death? Leaving it to your spouse will waste the relief. Consider where possible leaving such property to someone else - perhaps even a discretionary trust of which your spouse is one of the beneficiaries.