Business Relief (BR) is one of the most valuable Inheritance Tax reliefs available, potentially reducing the IHT liability on qualifying business assets by up to 100%. For business owners, understanding and planning for BR is essential.
In 2026, the relief rates are: 100% for a business or interest in a business (including partnership shares), 100% for unquoted company shares, and 50% for shares controlling more than 50% of a quoted company, or land/buildings/machinery used by a partnership or company you control.
To qualify, you must have owned the business asset for at least two years before death. The business must be a trading business — investment businesses, including property investment, generally don't qualify.
The government has signalled potential reforms to Business Relief in future Budgets. While no changes have been implemented in 2026, it's important to keep your estate plan under review.
If your business qualifies for BR, it can be incredibly powerful. A trading company worth £500,000 could pass to your beneficiaries completely free of IHT — saving £200,000 in tax.
However, BR planning needs to be coordinated with your Will and wider estate plan. For example, leaving business assets to someone who then sells them may trigger clawback of the relief.
At Castle Family Legal, we work with business owners to ensure their estate plans maximise available reliefs. Contact us for specialist advice.
