Business Relief (BR)* provides relief from Inheritance Tax (IHT) on the transfer of relevant business assets at a rate of 50% or 100%.

Because standalone BR investments are not part of HMRC’s Venture Capital Schemes (such as EIS, VCT etc), there is generally no upfront tax relief for investing in such schemes, nor any tax-free dividends/capital gains. Often (although not always) any returns from the investment are structured as returns of capital, and are subject to CGT accordingly. Unless “replacement business property”, any relevant property must be held for at least two years in order to qualify for relief.

*now termed Business Relief, but still commonly referred to as Business Property Relief (BPR)

Relevant Business Property	Rate of relief
A business or an interest in a business	100%
Unquoted securities which on their own or combined with other unquoted shares or securities give control of an unquoted company	100%
Unquoted shares	100%
Quoted shares which give control of the company	50%
Land or buildings, machinery or plant used wholly or mainly for the purposes of the business carried on by a company or partnership	50%
Land or buildings, machinery or plant available under a life interest and used in a business carried on by the individual	50%

The above tax incentives across all schemes often enhance the returns and help to reduce risk to investors’ capital.  However, investors must consider the investment risks and opportunities before they decide to invest and should seek suitable professional advice.

This is an overview for potential investors. It does not cover all the detailed rules, so investors should not proceed solely on the basis of the information in it, and should seek expert professional advice. MICAP does not give tax advice and nothing in this information should be construed as such.

For further details of the investment risks please see the Key Risks section of this website. Tax treatment is dependent on the circumstances of each individual and may be subject to change in the future.