When it comes to selling up or transferring on a business to the next generation, entrepreneurs and family business owners are usually encouraged to take measures to reduce the level of Capital Gains Tax payable on the disposal of the business. Far fewer entrepreneurs are advised to consider their Inheritance Tax (IHT) planning, though, and yet failure to consider the IHT aspects of a sale can cost families dearly in the long term, when 40% IHT is levied on the proceeds of the business sale in due course.Many think of IHT as a tax which only afflicts family wealth if the business owner is still holding the proceeds of the business sale on their death. However, IHT is a complex tax, affecting lifetime gifts as well as assets held on death. Successful IHT planning is not just about being caught with the proceeds ‘when the music stops’ (i.e. on death!). It is not the tax equivalent of a game of musical chairs!