Tax planning: IHT: Business Relief on AIM shares

An interest in a business, or unquoted shares in a company carrying on a business, may qualify for relief from Inheritance Tax (IHT).  The same can apply to certain other business-related assets.  A major category of property that can qualify for relief is a holding of shares in a company that is traded on the Alternative Investment Market (AIM).

This is a large and specialised subject, and readers are recommended to consult ‘Business and Agricultural Property Relief’, published by Bloomsbury, for more detail.  Suffice it to say that, used properly, this relief can help families to save IHT over a period of only two years.

However, the use of this relief may be threatened if the government ever decides to implement the recommendations of the recent Report of the Office of Tax Simplification.  This is described in my article ‘Inheritance Tax update‘. For the moment, it seems that we need expect no changes but wise families will look at what is proposed and may wish to take advantage of the present rules while they still can.

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