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Business interests are among the most complex assets to value for probate. The valuation must be defensible to HMRC and must also take into account the significant relief potentially available through Business Property Relief (BPR). This guide covers valuation methods, BPR eligibility, and how to report business interests in IHT400. For an overview of all assets requiring valuation, see our executor first steps guide.
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The type of business interest dictates the valuation approach. Common categories include:
| Business Type | What to Value | BPR Rate |
|---|---|---|
| Sole trader business | Net business assets plus goodwill, minus business liabilities | 100% |
| Partnership interest | Deceased's capital account plus share of goodwill | 100% |
| Shares in unquoted company (>50% control) | Pro-rata value of company, discounted for minority interest | 100% |
| Shares in unquoted company (minority) | Market value of minority shareholding with minority discount | 100% |
| AIM-listed shares | Quarter-up rule (listed share valuation method) | 100% if qualifying |
| Farmland and farm buildings | Agricultural value (Agricultural Property Relief may apply) | 50% or 100% (APR) |
BPR is one of the most generous IHT reliefs available. It can reduce the taxable value of qualifying business property by up to 100%, effectively making the business interest IHT-free.
Qualifying conditions for 100% BPR:
50% BPR applies to: Shares in a quoted controlling company (over 50% of votes), and certain land, buildings, or machinery used in a business owned by a partnership or company in which the deceased had an interest.
BPR does not apply to: Investment companies, property rental businesses, or businesses that are mainly investment in nature. If the business holds significant investment assets (shares, cash) alongside its trading activities, HMRC may restrict BPR using the "excepted assets" rules.
A qualified business valuer will choose the most appropriate method. The main approaches are:
For most small businesses, a combination of NAV and earnings multiple will be used. HMRC may challenge the method and/or assumptions — a well-documented report from a qualified valuer is essential.
Instruct a chartered accountant with business valuation experience, or a specialist business valuation firm. The report should:
Business interests are reported in:
BPR claims are made in Schedule IHT413. For a full guide to IHT400, see our IHT400 form guide. For the overall IHT position, see our inheritance tax guide for 2026–27. Start your estate administration with our free estate administration tool.
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