SVM111100 | IHT Business Property Relief: Restrictions on relief - introduction

Part V, Chapter 1 of IHTA 1984 denies relief to property in certain circumstances.

Under section 103(3) IHTA 1984 unquoted shares or securities in a company will only qualify for relief if the company carries on a business for gain. See this chapter at SVM111110.

Under section 113 IHTA 1984, property will not qualify for relief if it is subject to a binding contract for sale at the relevant time. See this chapter at SVM111120.

Under section 105(5) IHTA 1984, shares or securities in a company do not qualify if the company is being wound up or is “otherwise” in process of liquidation. See this chapter at SVM111130.

Under section 105(3) IHTA 1984, if a company’s business consists wholly or mainly of making or holding investments and so on, shares or securities in it will not qualify for relief. See this chapter at SVM111140 onwards.

Under section 112 IHTA 1984, relief is denied to the extent that the value of the shares, securities and so on is attributable to excepted assets - see this chapter at SVM111210 onwards.

Under sections 113A and 113B IHTA 1984, if there is a Potentially Exempt Transfer (PET) or chargeable lifetime transfer, the tax or additional tax chargeable on the transferor’s death will be charged on the basis that relief is not due, unless certain additional conditions are satisfied. See this chapter at SVM111260 onwards.

Under Sch 12 FA 2026 With effect for deaths and other transfers from 6 April 2026 (and including transfers made within 7 years of a death on or after 6 April 2026 if they were made on or after 30 October 2024) the highest rate of relief (100%) will be available on the combined value of qualifying agricultural and/or business property up to £2.5 million, or up to £5m if unused allowance can be transferred from a pre-deceased spouse or civil partner. This will only be due on the chargeable value of relievable property and will not apply to exempt transfers of relievable property. Any value in respect of total relievable property which exceeds the allowance will qualify for relief at 50%. See IHTM25500.

Additionally, shares in companies listed on a market that does not meet the definition of ‘listed’ for HM Revenue and Customs (HMRC) purposes (such as Alternative Investment Market (AIM)) and shares that are traded on a foreign stock exchange that is not a recognised stock exchange, can now only qualify for 50% relief.

Additional Guidance: SVM150000