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Business Relief (BR) investment services can provide a way for suitable clients to undertake inheritance tax (IHT) planning while retaining ownership of their capital.
While the potential tax relief is an important part of the proposition, it is only one part of the decision. BR services can differ considerably in where they invest, how they seek to generate returns, the risks clients take and how easily capital can be accessed.
For advisers comparing the market, there are several questions that can help get beneath the headline proposition and understand what a client is actually investing in.
1. Where will the client's money be invested?
One of the first things to understand is what sits underneath the BR service.
Some managers invest across a broad range of trading companies, while others focus on particular sectors or investment strategies. This can affect everything from the risks a client is taking to the way returns are generated.
Looking at the underlying businesses can therefore help advisers understand what is expected to drive performance, how exposed the investment is to individual sectors or economic conditions and whether the strategy is appropriate for the client.
2. How does the service aim to generate returns?
BR is a tax relief, but the client is still making an investment. Understanding where returns are expected to come from is therefore important.
That means looking beyond a target return and considering what needs to happen within the underlying businesses for that return to be achieved. Depending on the service, returns might come from business growth, interest on lending, income generated by assets or a combination of different sources.
It is also useful to look at how the service has performed over time, while recognising that past performance is not a reliable indicator of future results.
3. Who is managing the investments?
Clients may remain invested in a BR service for many years, making the experience of the people responsible for managing their capital an important part of the assessment.
Advisers may want to consider the manager's experience of investing in unquoted companies, how potential investments are assessed and how the portfolio is monitored once capital has been deployed.
For BR specifically, there is another layer to consider. The underlying companies need to continue meeting the relevant qualifying conditions for relief to be available, so advisers should understand how qualification is monitored throughout the life of the investment.
4. What happens if the client needs their money back?
The ability to retain ownership is one of the features that can make BR investments relevant to estate planning, but ownership should not be confused with immediate access to capital.
BR services invest in unquoted companies, so there is no liquid public market through which shares can simply be sold. Advisers should therefore understand how a service handles withdrawal requests, where the money to meet them is expected to come from and what could cause a withdrawal to take longer than anticipated.
This is particularly important where a client may need capital later in life. A client's circumstances can change, and an investment that is intended to be held until death may ultimately need to be accessed earlier.
5. What are the risks?
The potential IHT benefit should not overshadow the risks of the investment itself.
BR services invest in unquoted companies, which can carry greater risk than investments in larger companies listed on a main stock exchange. Capital can fall in value, liquidity can be limited and the underlying companies may not perform as expected.
There is also no guarantee that an investment will ultimately qualify for BR. The underlying companies must continue to meet the relevant qualifying conditions, while tax treatment depends on the individual circumstances of each client and may be subject to change in future.
Looking at these risks alongside the investment strategy, expected return and potential IHT benefit gives advisers a fuller picture of what the client is taking on.
Looking beyond the headline tax benefit
Two BR services may aim to achieve the same estate planning outcome while investing clients' money in very different ways.
Understanding the underlying strategy, how returns are generated, who is responsible for managing the investments, how withdrawals work and what could go wrong can help advisers make a more meaningful comparison between services.
The starting point is therefore not simply whether an investment is expected to qualify for BR, but whether the investment itself is appropriate for the client's objectives, risk profile and wider estate plan.
For more on how BR works, including the changes introduced in April 2026, read our Introduction to Business Relief. You can also read our Guide to Estate Planning for a broader look at the options available to clients.
To learn more about the Estate Planning Service managed by Beringea, please visit this page.
Important Notice
For professional advisers only.
This document is for information purposes only and does not constitute investment, tax, financial or legal advice. It does not constitute an offer to buy or sell an investment or solicit any such invitation.
The information is believed to be accurate at the date of publication, but no representation or warranty, stated or implied, is made or given by any person as to its accuracy or completeness and no responsibility or liability is accepted for any such information or opinion. Tax treatment depends on individual circumstances, and tax rules may change.
Issued by Beringea LLP of Charter House, 55 Drury Lane, London, England WC2B 5SQ. Registered in England and Wales under number OC342919. Authorised and regulated by the Financial Conduct Authority under number 496358.
