Q&As

What is the Business Property Relief position with regard to running a business on land owned personally by the sole shareholder?

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Produced in partnership with Ward Hadaway
Published on LexisPSL on 03/03/2016

The following Private Client Q&A produced in partnership with Ward Hadaway provides comprehensive and up to date legal information covering:

  • What is the Business Property Relief position with regard to running a business on land owned personally by the sole shareholder?
  • Business Property Relief (BPR)
  • Positon in relation to the shares in the company
  • The land occupied by A's company
  • Generally

What is the Business Property Relief position with regard to running a business on land owned personally by the sole shareholder?

Business Property Relief (BPR)

The legislation for BPR relief from Inheritance Tax (IHT) is to be found in sections 103–114 of the Inheritance Tax Act 1984 (IHTA 1984).

For BPR to apply, there must be a transfer of value for the purposed of IHT (see IHTA 1984, s 103).

There are a number of conditions which have to be met regarding the nature of the company and its ownership so that it is relevant property for the purposes of BPR.

In addition to the conditions which need to be met, the rate of BPR relief available will be either 50% or 100% of the value of the assets concerned. The rate of the relief will depend on what the assets are.

Positon in relation to the shares in the company

For the shares in the company to be relevant property in order to attract BPR at a rate of 100% the following criteria must be met:

  1. the company must be a trading company in accordance with the statutory definition contained broadly in IHTA 1984, s 105 (1)(bb) and IHTA 1984, s 105(3)

  2. A must have held the shares in the company for a minimum of two years (IHTA 1984, s 106)

If the

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