IHTM10692 | Investigating supplementary form: D38 - Business relief

This form is designed to obtain the information you need to establish whether 100% business relief (IHTM25021) is available in straightforward cases, and to establish the value of the business interest if 100% relief is not due. The information they contain may also be used to investigate a claim for business relief at 50%. The equivalent form for IHT400 is form IHT413 (IHTM25012).

Question 1

This states as to which type of business interest is involved.

Question 2

This identifies the business the claim relates to, also the amount and rate of relief being claimed.

Question 2a and 2b

These questions apply if the claim relates to a chargeable event on or after 30 October 2024. From that date, after the relief allowance is fully used, relief is limited to 50%.

Note that the ‘relief allowance’ is reduced by the total of any agricultural relief or business relief that has previously been used.

Question 3

This states if the business interest was owned for the two-year period required by the ownership test (IHTM25301).

If the answer to question 3 is no you should proceed as follows:

• If the business interest ticked at question 1 is a holding of unquoted shares, Shares and Assets Valuation (SAV) will investigate business relief and your referral should include any information the taxpayer has provided in the box at question 2.

• For other business interests, you should check the rules for the test (IHTM25301) as the 2-year ownership requirement is relaxed in certain circumstances.

Question 4

Business relief is not normally available for a business interest that is subject to a binding contract for sale (IHTM25291).

Question 5

Identifies the shares and securities on which the taxpayer has claimed business relief. You should refer to Shares, Assets and Valuation (SAV) and include the details provided in question 4.

Question 6

If the answer to this question is yes, you should include any details provided when you refer to SAV.

Question 7

This question asks for the value of the interest in a business or a partnership at the date of the chargeable event.

Question 8

This question pertains to the nature of the business activity and requests an explanation of how the value reported at Q7 was determined. Please include details regarding any valuations conducted and provide business accounts for the previous three years.

Question 9

This question asks for information relating to the value of a partnership interest.

The answers at questions 8 and 9 should provide information to establish whether the business interest is relevant business property (IHTM25141). This will tell you if it is the type of business interest which is capable of qualifying for business relief. If 100% business relief is not due, the information provided is needed in valuing the business interest.

Question 10 and 11

Provides information needed to value a business interest on which 50% business relief is claimed, and to investigate the claim for relief.

These questions ask about assets owned by the transferor/trustee and that are used by a business or company, and what the transferor/trustee interest in that business or company was. If there is no connection between the two, the assets will not be relevant business property.

Question 12

This question is to confirm that Business Relief would have been available at the date of the chargeable event had the trustees made a transfer of the property at that time.

Question 13

If this question has been answered yes, the chargeable event involves a settlement holding business or agricultural property on 30 October 2024 that would have qualified for relief at that time. This is known as a 'pre-commencement settlement'. There are special rules that apply in this circumstance (see IHTM25551).