Valuing businesses and partnerships: What is a business?
The meaning of ‘business’ is not defined for Inheritance Tax purposes, so it has its ordinary meaning which is a trade or profession carried on for gain.
IHTA84/S103(3) says that businesses ‘includes a business carried on in the exercise of a profession or vocation, but does not include a business carried on otherwise than for gain’.
There is more detail in the Shares and Assets Valuation Manual at SVM111110.
Where the description of the deceased’s occupation on page 2 of the IHT400, or something else such as a bequest in a Will, indicates that the deceased was in business but no business is disclosed amongst the assets, you should query the position. Do not do this, however, if it is clear that the deceased had retired from business or was in fact only an employee.