Case study: Maximising business property relief and securing wealth for business owners

A common scenario

A client comes to us for inheritance tax planning. He is:

• The majority shareholder in a successful trading company
• The sole owner of a commercial property from which the company operates, and
• Dependent on the rental income from that property for his personal living expenses

The client wants to reduce the value of his estate for IHT purposes but needs to maintain control of the business and retain his current income levels.

What we can do

Our Private Client team is uniquely placed to advise on integrated legal and tax solutions that involve estate planning, corporate structuring, and collaboration with accountants and financial advisers.

Here’s how we would approach a scenario like this:

Step 1: Strategic corporate restructure

We can advise on the creation of a new holding company to sit above the trading company. Using a share-for-share exchange, the client would swap his shares in the trading company for shares in the holding company, thus, maintaining full ownership and control. Our Corporate team are well placed to assist with the incorporation and share-for-share exchange, including dealing with all necessary Companies House formalities. 

We can work with the client’s accountants to ensure Holdover Relief is available for Capital Gains Tax (CGT) under s127-s131 TCGA 1992 on the disposal of shares, meaning no immediate tax liability arises.

Step 2: Transferring the commercial property

The client’s personally owned commercial property can be transferred into the new holding company. The business continues to occupy it, with a new lease being put in place, now between the holding company and trading company.

We can again work with the accountants to ensure Holdover Relief under s165 TCGA 1992 is claimed for the disposal of property, as this is a business asset transferred to a company the client controls. Furthermore, the Stamp Duty Land Tax exposure would be minimal, as the transaction involves a share-based transfer with no chargeable consideration.

Step 3: Preserving income

Before restructuring:

• The trading company shares would likely qualify for 100% Business Property Relief (BR)
• But the personally owned commercial property (used by the business) would only qualify for 50% BR

After restructuring:

• The client’s shares in the holding company would represent both the business and the property, resulting in 100% BR on the entire value

This structure could result in significant inheritance tax savings.

Financial planning & protection

We don’t just stop at legal advice. In collaboration with our clients' accountants and financial advisers, we look at the full picture, including:

• Using life insurance policies (written in trust) to cover any residual inheritance tax liability
• Planning tax-efficient income and succession routes for family members
• Coordinating with tax advisers to ensure full HMRC compliance

Why this matters

This type of planning is not routine. It requires detailed knowledge of:

• Corporate structuring and share exchanges
• Inheritance Tax and Business Relief regulations
• CGT and SDLT implications
• Cross-disciplinary coordination with other advisers

At Thackray Williams, we have the expertise and experience to lead this process from start to finish — helping clients protect wealth, preserve income, and achieve peace of mind. Speak to a member of the Private Client team for further information.

Important Budget update: New BPR cap from April 2026

As announced in the 2024 Autumn Budget, from 6 April 2026, the availability of Business Relief has been capped at £2.5 million per individual.

• Business assets over that value will qualify for only 50% relief, leading to a 20% IHT charge on the excess
• For clients with high-value companies or business properties, it’s important that action is taken to maximise these allowances