The following Trusts and Inheritance Tax guidance note by Tolley in association with Peter Rayney of Peter Rayney Tax Consulting Ltd provides comprehensive and up to date tax information covering:
Business property relief (BPR) is a relief that reduces the taxable value of property on which inheritance tax is charged. The reduction will generally be available where a transfer of business property is made, or where a deceased estate contains business property.
The reduction will be at a rate of 50% or 100%, depending upon the type of business property concerned.
BPR is given automatically. It is not necessary to make a formal claim in order for BPR to apply. However, an intention to deduct BPR from the value of qualifying assets must be signalled on the inheritance tax account form IHT413 and the amount deducted needs to be shown.
Property qualifies as business property if it meets two conditions:
Types of business property that qualify for 100% BPR include:
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