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 on LexisPSL on 11/06/2018

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • 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?

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?

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 quoted shares or securities) and gave the transferor control of the company

Property is not relevant business property unless it was owned by the transferor

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