Reducing an inheritance tax liability

Case study
Insights

Business Relief is a useful form of inheritance tax relief that can help you pass on more of your wealth to loved ones.

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You’re never too far away from a significant life event. Whether it’s buying a new home or investment property, welcoming a new addition to the family or preparing for retirement, it pays to be prepared.

Having a wealth plan that is built around your needs and life goals, and adapts as life changes, can help you achieve your personal and financial ambitions with confidence.

But what does this look like in practice?

Below is an example of how RBC Wealth Management helped a client, who was recently widowed, reduce her inheritance tax liability (IHT) by up to £1.2 million, enabling her to pass on more of her wealth to her children with peace of mind.

In practice: Business Relief

Our client:

  • Widowed individual who is a beneficiary of her late partner’s estate
  • Total net worth of £7.5 million
  • Their long-term relationship with RBC Wealth Management has grown to include multiple generations of the family

Their needs:

  • Aged 74 with a potential IHT liability of £2.7 million
  • Wanted a simple solution to potentially reduce the IHT bill for the beneficiaries of the estate, ensuring they benefitted to the maximum extent in the event of her death
  • Wanted to retain access and control of assets while she adjusted to her change in circumstance
  • Wanted a solution that could reduce her IHT exposure quicker than traditional gifting or trust planning

Our solution:

  • RBC Wealth Management used cashflow modelling to demonstrate the client’s current IHT exposure; how this would worsen over time without any action; and compared the timing and extent of IHT savings with various planning scenarios such as gifting, investing in Business Relief (BR) portfolios, and trust planning
  • The client invested £3 million in a non-alternative investment market (AIM) BR portfolio designed to provide a consistent, low volatility return of three percent per annum
  • Invested in asset-backed companies with steady, predictable cashflows via three non-AIM BR specialist managers on the RBC panel
  • The client retains full access to the portfolio and can draw down with average 10-day liquidity
  • Investments need to be held for two years to achieve BR qualifying status, with the status only tested on death. Subject to successful qualification, our client may reduce their IHT liability by £1.2 million

Why choose Business Relief?

As the case study above demonstrates, making investments that qualify for BR is a valuable estate planning strategy, enabling you to minimise your inheritance tax bill and pass on more to your loved ones.

By investing in companies that qualify for BR, you don’t have to gift your money away; can grow your inheritance pot; and free it of inheritance tax more quickly than gifting or using a trust.

RBC Wealth Management and its chartered Wealth Planning team works closely with third-party providers of non-AIM BR investments to provide clients with access to non-AIM BR portfolios. This enables clients to invest in portfolios with a social value, such as renewable energy, health care, and care homes.

Learn more about how to create a wealth plan here.


Business Relief investments are higher risk investments. They are only suitable for UK resident taxpayers who can tolerate higher risk and have a suitable timeframe for investment. Investments may fluctuate in value significantly and be more difficult to sell than shares listed on the main market. Tax relief cannot be guaranteed and tax rules are subject to change. This case study does not constitute personal advice and tax advice should be obtained from a personal tax advisor.

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