What is business property relief
Business Property Relief: Inheritance Tax Planning in the UK, using Business Property Relief by Nigel Beynon
Business Property Relief (BPR)
Once BPR-qualifying shares have been owned for at least two years, they can be passed on free from inheritance tax on the death of the shareholder. BPR is a well-established relief dating back 40 years, however, you should keep in mind that the value of an investment may go down as well as up and you may not get back what you originally put in. Tax rules may change in the future, and the value of tax reliefs depends on your own personal circumstances. Not every interest in a business will qualify for BPR. Broadly speaking, investments in the following kinds of businesses that carry on a trade rather that investment activities could qualify for BPR, including:. Investing in the shares of BPR-qualifying companies can be beneficial if you fit into one of these categories:. Click or tap this pink button to confirm you belong here and you have read the information above.
Mark McLaughlin highlights a selection of potential pitfalls for business owners seeking inheritance tax business property relief. This article outlines a selection of traps and pitfalls, which could result in a loss of BPR. The list is by no means exhaustive, and the BPR requirements should be considered carefully in every case. A business or business interest and unquoted company shares are not eligible for BPR if the business or the business carried on by the company consists wholly or mainly of dealing in securities, stocks or shares, land or buildings or making or holding investments IHTA , s 3. These BPR exclusions are subject to relatively limited exceptions, such as in relation to group holding companies see s 4 , 4A. The exception from BPR for businesses wholly or mainly of making or holding investments means that for example the shareholders of a family or owner-managed company operating a rental property business and nothing else would generally not be eligible for BPR in respect of their shares.
The good news for many business owners, is that businesses and their assets are often exempt from Inheritance Tax because of Business Property Relief. It can be a bit of a minefield, but this quick and easy guide will help you work out where you stand.
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How to claim relief
Property Tax. International Tax. Expanding Overseas. Planning an Exit. Capital Allowances.