The tax benefits of private company investing depend on your personal circumstances and on compliance with the relevant rules, all of which could change, removing benefits that were expected.
What is Business Relief?
Business Relief (BR) is a UK tax relief that is designed to exempt certain types of business assets from Inheritance Tax (IHT). BR is intended to help ensure that wealth can be passed down from one generation to the next without being subject to a significant tax burden. Among other things, BR applies to shares in unlisted companies and provides relief on the value of the shares held by an individual at the time of their death. To qualify for BR, the shares must have been owned by the individual for a minimum of two years and the company must be wholly or mainly involved in trading as opposed to investment. In addition, there are various restrictions and conditions that must be met. From 6 April 2026, the first £1m of qualifying assets are completely exempt from inheritance tax, whilst any qualifying assets over £1m are 50% exempt, effectively resulting in a reduced 20% rate of inheritance tax.