Alan has owned a small business for many years and would like to retire, but is reluctant to do so as he sees the business as his children’s inheritance and fears losing the IHT relief in relation to the business. However, he can see that as he puts less time into the business, it is losing value, as much as 20% per year.
Alan fears his business will lose value
HE SEEKS HELP FROM AN ACCOUNTANT WHO
REFERS HIM TO A FINANCIAL ADVISER
ALAN IS ADVISED TO SELL THE BUSINESS* AND INVEST THE
PROCEEDS INTO A PORTFOLIO OF BR QUALIFYING INVESTMENTS
As Alan’s business already qualified for BR, the replacement property rule applies and therefore he just needs to ensure that the reinvestment happens within three years of the original sale.
The new BR portfolio is 100% IHT exempt as soon as the assets are acquired. Alan can exit his business and retire without sacrificing the IHT relief he had earned, and still expect some growth in this part of his estate which can be passed to his children.