Inheritance Tax Act 1984 section 110

Value of business

Section 110 defines how the value of a business or an interest in a business is calculated for the purposes of business property relief under Chapter 1 of Part 5 of the Inheritance Tax Act 1984.

• The value of a business or an interest in a business is taken to be its net value for business property relief purposes.
• Net value is calculated by taking the value of all assets used in the business (including goodwill) and deducting the total of any liabilities incurred for the purposes of the business.
• When valuing an interest in a business (such as a partnership share), only the assets and liabilities that would be relevant to the net value of the entire business are taken into account.
• Liabilities not incurred for the purposes of the business, such as a partner's personal income tax on their share of profits, are excluded from the net value calculation.