SME owners that plan to bequest their firms to relatives rather than sell them on will find that inheritance tax (IHT) provisions are "fairly generous" one expert believes.
Andrew Hubbard, vice president of the Chartered Institute of Taxation and technical director of the Tenon Group, explained that as many SMEs were passed on to relatives, capital gains tax was less of an issue than IHT for these firms.
Mr Hubbard said: "Currently we still have the fairly generous Inheritance Tax provisions, where you can pass it down a generation free of charge. I think we would all be very surprised to see any changes there."
However, he warned that any non-domiciled SME owners might want to review their positions as recently taxation changes affecting this group could cause them problems.
Under current rules shareholdings in firms that are not listed on stock markets attract a 100 per cent rate of relief on IHT, meaning small firms can usually be passed on with out any tax being levied.
