Keep Business Relief working on your holding company shares.

They can. Shares don't normally qualify if a company's business is wholly or mainly making or holding investments, and a holding company could look like an investment company. But the inheritance tax rules make an exception for a company whose business is wholly or mainly being the holding company of companies that trade. So where your subsidiaries carry on a trade, shares in the holding company can qualify, subject to the excepted assets rules.

Normally not. Business Relief needs the shares to have been owned for two years, but where new holding company shares are treated as the same asset as your old trading company shares under the capital gains share exchange rules, your period of owning the old shares counts. So a properly structured share-for-share exchange carries your ownership history across. If the exchange is not treated that way, for example because cash was paid, the position needs checking.

From 6 April 2026, 100% Business Relief and Agricultural Relief apply to the first £2.5m of combined qualifying property per person. Qualifying value above £2.5m gets 50% relief, which means an effective inheritance tax rate of 20% on the excess. The allowance is due to be increased with inflation from April 2031. Originally announced as £1m, it was raised to £2.5m in December 2025, so older guidance may show the lower figure.

Yes. From 6 April 2026, any unused part of the £2.5m allowance for 100% relief can be transferred to a surviving spouse or civil partner, in a similar way to the nil-rate band. A married couple can therefore shelter up to £5m of qualifying business property at 100% between them, if the planning and wills are right. How shares are left on the first death affects how much allowance is available on the second.

An asset escapes the excepted assets rule if it is required at the time of the gift or death for future use in the business. For cash, that means money genuinely earmarked for something the group will do, such as a planned acquisition, new premises, equipment or known liabilities, rather than general reserves. Board minutes, budgets and plans made at the time are the best evidence. Cash with no identified purpose risks being excluded from relief.

Yes. For the excepted assets rules, use by another member of the same group counts as use for the business. So a property owned by the holding company and occupied by the trading subsidiary is not an excepted asset just because the holding company itself doesn't trade. That makes it possible to hold the trading premises at the top of the group without losing relief on that part of the value.

It can. Where one company in a group mainly holds investments, the holding company's shares are valued for Business Relief as if that company were not in the group. In practice, the value of a let property or investment subsidiary gets no relief, even if the rest of the group trades. There is an exception for a company mainly holding land or buildings occupied by trading group members, such as a company owning the group's own premises.

Then the holding company shares may not qualify at all. Relief is not available if the business consists wholly or mainly of making or holding investments, and a holding company only escapes that rule where its subsidiaries mainly trade. If property or investments make up most of the value, relief can be lost on everything, not just the investment part. Separating the investments, for example through a demerger, can protect relief on the trading shares.

It's often worth considering. Investment property usually doesn't qualify for Business Relief whether it sits inside or outside the group, but leaving it inside can restrict relief on the trading shares or put the whole group's relief at risk. Moving it into a separate company owned side by side can make the trading shares' position clearer. The property company itself will still be in your estate, so other planning may be needed for it.

Usually, yes, once there is a binding contract for sale. Shares subject to a binding contract at the time of death or a gift are not treated as relevant business property, because the value is about to become cash. There are exceptions for sales in exchange for shares as part of a reconstruction or amalgamation. Shareholder agreements should be checked too: HMRC treat options to buy differently from agreements that amount to a binding contract for sale.

A gift to an individual is a potentially exempt transfer, so there is no inheritance tax if you survive seven years. If you die within seven years, Business Relief can still reduce the value, but only if your child has kept the shares from the gift until your death and they still qualify for relief at that point. If your child sells the shares, or the company changes character, before then, the relief can fall away.

Usually a gift is treated as a sale at market value, so a capital gains tax charge can arise even though nothing is paid. Gift holdover relief can defer the gain for shares in an unlisted trading company or the holding company of a trading group, with the recipient taking over your base cost. The relief can be restricted where the group holds non-business assets such as investment property, so the group's make-up matters here too.

There's a trade-off. A lifetime gift can take future growth out of your estate, but may involve capital gains tax unless holdover relief applies, and the seven-year survival period. Shares held until death are uplifted to market value for capital gains tax, so your heirs inherit at today's value. With 100% Business Relief now capped at £2.5m per person, many families are revisiting the balance between gifts and inheritance.

You can. A transfer into a discretionary trust is a chargeable transfer, with 20% inheritance tax on value above the available nil-rate band, but Business Relief can reduce the value transferred where the shares qualify. Trusts also face ten-year and exit charges of up to 6%. A separate £2.5m allowance for 100% relief applies to relievable property held in trusts. Trusts can keep control with the family while value passes down.

Rarely. Business Relief is claimed after a death or a chargeable gift, and HMRC review the company's activities and assets at that point. HMRC's non-statutory clearance service only deals with genuine uncertainty about how the law applies, not with matters of fact or tax planning, and whether a group is mainly trading is largely a question of fact. The best protection is a well-documented structure and regular reviews while you are alive.

Your will should be written with the Business Relief rules in mind. Leaving qualifying shares to a spouse is exempt anyway, which can waste relief unless the unused allowance passes across. Leaving them to children or a trust may use relief on the first death. The articles of the holding company, any shareholder agreement and your will should all point the same way, so that shares end up with the right people without triggering a sale.

Yes. From 6 April 2027, most unused pension funds and death benefits will come into the estate for inheritance tax, with personal representatives responsible for reporting and paying. For business owners who have built up pension savings alongside their companies, that changes the overall estate value and how the £2.5m Business Relief allowance, the nil-rate band and gifts should be planned. It's worth reviewing the whole picture together.

Whenever the group changes shape, and at least every few years. Inserting a holding company, building up cash, buying property, adding an investment subsidiary or agreeing a sale can all change the Business Relief position. The April 2026 changes mean many owners with groups worth more than £2.5m now have a real inheritance tax exposure for the first time, so a review now is sensible even if nothing else has changed.