New research finds IHT bills to reduce by 12 percent through investing in unlisted companies

13/08/2018 News Team

Taxpayers are expected to reduce their inheritance tax (IHT) bills by 12 percent over the next year, or a record £710 million in 2017/18, through investments made in unlisted companies and other business assets, according to 2018 eprivateclient Top Accountancy Firm UHY Hacker Young.

Taxpayers paid £5.3 billion in inheritance tax in the last year to February 28 2018, an increase from £4.7 billion in 2016/17, according to statistics from HMRC.

UHY Hacker Young suggests that HMRC forecasts show the Business Property Relief’s (BPR) value is expected to rise by eight percent in 2017/18, from £655 million in 2016/17.

Investments in qualifying AIM listed companies, Enterprise Investment Schemes (EIS) and other private companies have grown in popularity recently, as these assets are often exempt from IHT.

BPR allows those who inherit shares in qualifying unlisted companies to exclude the value of those assets from their IHT bill and taxpayers can claim 100 percent relief on the value of these unlisted shares after two years, provided the investments are still held at the time of death.

Mark Giddens, partner at UHY Hacker Young, said: “The Government has reduced the scope of legitimate tax planning opportunities over the years especially for higher earners – so the few that are left are increasingly popular.

“Encouraging investment in AIM shares and other unlisted companies is good for the broader economy as they create growth and jobs. High inheritance tax bills have become a concern but there are steps that can be taken to cut the tax bill.”

UHY Hacker Young has 110 partners and more than 620 professional staff working from 22 locations around the UK.


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