Is this inheritance tax break under threat after Philip Hammond's NI fiasco?

Philip Hammond
Philip Hammond Credit: JUSTIN TALLIS/AFP/Getty Images

One of investors’ favourite ways to avoid inheritance tax could be scrapped – as a perverse side effect of the Chancellor’s about-turn on National Insurance.

Philip Hammond needs to raise taxes somehow to replace the abandoned increase in NI. He may decide that the self-employed should still be the victims and simply find a new way to tax them that does not break a Tory manifesto commitment.

One tax break that is currently enjoyed by many entrepreneurs is called business property relief. The perk is designed to prevent the founders of family businesses facing an inheritance tax bill when they die.

But it also can also be enjoyed by outside investors in start-up businesses, who include holders of Aim-listed shares. Investors who put money into many (not all) Aim companies will avoid inheritance tax on the shares if they own them for two years or more.

If Mr Hammond believes that the self-employed...

To continue reading this Premium article

Register for free and access one Premium article per week

Enjoy unlimited access to Premium articles with a subscription

  • Subscriber-only events and experiences
  • Access Premium articles on our mobile app

30-day free trial

then only £2 per week

Unlock all Premium articles for 24 hours. Only £1.