Protecting Your Company and Reducing Inheritance Tax
If you are a company director, partner, or sole trader, your Will must account for trading assets and how they will be passed on. With careful structuring, Business Property Relief (BPR) can reduce or even eliminate inheritance tax (IHT), ensuring your wealth transitions smoothly to family, successors, or business partners.
What is Business Property Relief?
Business Property Relief (BPR) is an inheritance tax relief introduced to prevent trading businesses being dismantled simply to pay tax. It allows certain qualifying assets to be passed on either free of inheritance tax or with significant reduction.
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100% relief is generally available for shares in an unquoted trading company, or a sole trader/partnership interest.
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50% relief may apply to land, property, or machinery used for trade.
However, not every asset qualifies. For example, rental property and purely investment-focused holdings typically do not benefit from BPR. Our solicitors review eligibility against the Business Property Relief HMRC Manual, ensuring your estate planning is fully compliant.
This is where a business will is critical — allowing you to secure relief on qualifying assets, protect company continuity, and provide certainty for successors.
Business Property Relief and Inheritance Tax Planning
Without the correct planning, company assets may be subject to a 40% inheritance tax charge. This can create significant problems for families or business partners trying to maintain operations after death.
Using BPR as part of a Will or estate plan enables you to:
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Transfer shares or trading assets to family members or successors tax efficiently
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Preserve the company’s liquidity by avoiding forced sales of shares or property
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Combine BPR with capital gains tax (CGT) relief for lifetime gifts or succession transfers
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Structure a plan that covers both first and second deaths, maintaining relief across generations
Recent business property relief changes in October 2024 tightened the qualification rules. Further reforms are expected in April 2026, potentially narrowing eligibility for some types of businesses. Planning early is essential to lock in current reliefs and avoid unexpected tax liabilities.
What Qualifies for Business Property Relief?
Typical business property relief examples include:
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Shares in an unquoted trading company
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Sole trader or partnership interests
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Land, property, or equipment used wholly for trade
Assets that typically do not qualify include:
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Investment-only companies and non-trading shares
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Business property relief on rental property held solely for income
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Excess cash reserves not applied to trading activity
To benefit, the asset must usually have been owned for at least two years before death. Where conditions are met, business property relief on death can remove the inheritance tax liability entirely.
Our solicitors advise on business property relief conditions in detail, providing practical solutions for succession planning, family protection, and tax efficiency. By understanding what qualifies for business property relief, you can safeguard both your company and your legacy.
Business Lasting Power of Attorney (LPA)
It’s equally important for business owners to consider a Business Lasting Power of Attorney (LPA). This ensures your business can continue operating if you lose mental capacity due to illness or accident.
At Vault, we advise sole traders, directors, LLP members, and partners on the importance of this planning tool. Without a Business LPA in place, bank accounts may be frozen, contracts delayed, wages unpaid, and the business reputation at risk. In many cases, this forces families or colleagues into a lengthy and expensive Court of Protection application, potentially placing your business in the hands of someone with no commercial experience.
A Business LPA allows you to appoint a trusted attorney to make business decisions temporarily if you’re unable to. It doesn’t interfere with your day-to-day control while you’re well — it simply acts as a safeguard.
We have significant experience preparing Business LPAs alongside Wills and can ensure both documents work in harmony. Visit our LPA page or contact us today for a no-obligation quote.
THE BEST IN THE BUSINESS.
Meet our expert team of wealth management specialists, dedicated to providing tailored advice and trusted support to help you protect your wealth and plan confidently for the future.
Russell Kaminski
Partner and Head of Private Client
Lucy Cresswell
Associate
Alison Rocca
Partner
Jason Stanley
Partner
Holly Greensmith
Solicitor
Matt Fleetwood
Group Chief Executive & Founder
Mark Dawson
Group Managing Director
Amanda McAlister
Head of Group Consumer Brands
Because we are here to help you.
Whether you want clarity on what business property relief is, understand how business property relief and inheritance tax interact, or draft a tailored business will, our private client team can help. We guide sole traders, entrepreneurs, and family companies through succession planning, ensuring your estate is protected under current and future legislation.
Protect your company’s legacy — contact our specialists today for expert advice on Business Property Relief and estate planning.
“We had a very good meeting yesterday with Lucy Cresswell. She set out their plan of action and both ### and I came away from your offices a lot happier.”
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