Q&As

Are shares in a self-storage company likely to qualify for business property relief from inheritance tax under sections 103-114 of the Inheritance Tax Act 1984?

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Published by a LexisNexis Private Client expert
Published on: 11 June 2018
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Business property relief (BPR) is an extremely important relief for inheritance tax (IHT) purposes. The scope and extent of the relief has been widened over the years. The relief applies both to individuals and to trusts that hold qualifying property.

Property that qualifies for BPR is called 'relevant business property'. There are several categories of relevant business property. Those most likely to be relevant when considering shares in a self-storage company are:

  1. •

    property consisting of a business or interest in a business (section 105(1)(a) of the Inheritance Tax Act 1984 (IHTA 1984)) (note Nelson Dance decision)

  2. •

    any unquoted shares in a company (IHTA 1984, s 105(1)(bb))

In which case, BPR would apply at 100%.

It is possible but less likely that the following category would apply (and in which case, BPR would only be available at 50%):

  1. •

    shares in or securities of a company which are quoted (either by themselves or with other

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Jurisdiction(s):
United Kingdom
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Key definition:
Shares definition
What does Shares mean?

The CA 2006 merely provides that a share is a share in the company's share capital. A company's share capital comprises the number of shares issued by it to investors either on or after incorporation. Those investors then become the shareholders in the company. A shareholder’s shares are their personal property. By contrast, the assets of a company are owned by the company itself. Owning shares does not entitle a shareholder to any property rights in the company's assets.

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