IHT—business property relief
Produced in partnership with Hayden Bailey and Gabrielle Dewes of Boodle Hatfield
IHT—business property relief

The following Private Client practice note produced in partnership with Hayden Bailey and Gabrielle Dewes of Boodle Hatfield provides comprehensive and up to date legal information covering:

  • IHT—business property relief
  • Categories of business property
  • Minimum period of ownership
  • Valuing a business
  • BPR is disapplied in a number of situations
  • Excepted assets
  • BPR and trustees
  • Guarantees and charges over non-business assets
  • Retaining BPR after retirement
  • General points concerning BPR
  • More...

IHT—business property relief

Business property relief (BPR) is an important relief for inheritance tax (IHT) purposes. The relief applies both to individuals and to trusts that hold qualifying property.

BPR applies to reduce the transfer of value for IHT purposes and is given before annual exemptions. BPR applies to both lifetime gifts and property passing on death. It also applies to charges arising on relevant property trusts under Chapter III of Part III of the Inheritance Tax Act 1984 (IHTA 1984).

In this context the word 'business' includes a business carried on in the exercise of a profession or vocation but does not include business carried on otherwise than for gain.

Categories of business property

Property that qualifies for BPR is called 'relevant business property'.

These are the following categories of relevant business property with the following levels of relief.

Types of reliefRate of relief
A business or interest in a business or share in a partnership (IHTA 1984, s 105(1)(a)) (note Nelson Dance decision).100%
Securities of a company which are
unquoted which, either by themselves or together with other such securities owned by the transferor, gave the transferor control of the company (IHTA 1984, s 105(1)(b)). Control is voting control and means the transferor must own more than 50% of the ordinary shares and related property (IHTA 1984, s 269(2)) is taken into account.
Any unquoted

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