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John, a haulier with a 10-truck business, died in May
Page 35
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2008. His shares in the company were valued at E1 million, and the remainder of his estate was worth £2 million. He left his shares to his adult son (who took over the business), £500,000
to his daughter, and .5 million to his wife. John had made no gifts in the seven years before he died.
Assuming all conditions for BPR are met, 100% relief will apply to the shares, and no IHT will be payable on those. The residue of £1.5 million passing to John's wife is covered by the spouse exemption, but some IHT will be due on the bequest to his daughter. The amount on which IHT is charged is 2188,000 (£500,000 less the nil rate band of £312,000), and the IHT due, at 40%, is 275,200. 41.500k is left to his wife. This is covered by the spouse exemption so is exempt from IHT.