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Business Relief (BR) allows for certain investments to be left to beneficiaries inheritance tax free (IHT) after 2 years of holding them, provided the shares are held at the time of death. Unlike gifting the investor can retain control over the investment and the BR shares only need to be held for 2 years to qualify for IHT exemption.

The Problem

  • Simon is 49 and his father Lawrence is 78. Lawrence has accumulated £800,000 in liquid assets as well as the property and now has a significant IHT liability
  • Simon knows his father wants him to inherit so he can pay off his mortgage and help Lawrence’s grandchildren with school and University fees
  • However Simon is also aware that his father could live for a long time and does not want his father to give his assets away or lose control of his capital
  • Lawrence is fiercely independent and so Simon avoids discussing IHT given his concerns about his father’s future access to capital

The Solution

  • Lawrence has always invested in shares and has a large ISA Portfolio as well as a significant investment portfolio
  • Simon’s adviser discusses the IHT options with him and suggests BR assets could be utilised
  • Simon likes the idea as this merely involves switching/realigning some of his ISAs or Share Portfolio into BR qualifying shares. Simon initially gives his father an AIM ISA brochure and then arranges a meeting for Lawrence with his financial adviser
  • Lawrence is excited by the potential of AIM and is pleased he can maximise the inheritance for the benefit of his grandchildren and Simon. Lawrence is comfortable as he still owns the shares, has access and control over the the progress of his investments


For this tax planning idea, we assume that Lawrence’s Nil Rate Band of £325,000 has been used elsewhere.

Capital is at risk and the investor may not get back the amount invested   |   020 7071 3920   |

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Important Information
Issued by LGBR Capital Limited, Candlewick House, 120 Cannon Street, London EC4N 6AS. LGBR Capital Limited is an Appointed Representative of Mirabella Advisers LLP, which is authorised and regulated by the Financial Conduct Authority number 606792. This document should not be regarded as constituting advice in respect of legal, taxation, investment or other matters. This document is intended to be communicated solely to persons that fall within the FCA classification of ‘Professional Client’. LGBR Capital Limited operates as distributor of the investment products and strategies of other selected providers. LGBR Capital does not manufacture investment products itself. Past performance is not a guide to future performance; the value of an investment and income from it can go down as well as up. Contact the sender of this document if you would like further information about any of the funds, including charges, expenses and risk considerations. Prospective investors are advised to consult their own professional advisers before contemplating any investment. No representation or warranty expressed or implied is made or given by any person as to the accuracy or completeness of the information contained in this email and no responsibility or liability is accepted for any such information. This material may not be distributed, published or reproduced in whole or in part.

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