BPR

By Tolley in association with Peter Rayney of Peter Rayney Tax Consulting Ltd

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:

BPR
Business property that qualifies for BPR
Business property that cannot qualify for BPR
Valuation issues
Withdrawal of business property relief

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.

IHTA 1984, s 104

Business property that qualifies for BPR

Property qualifies as business property if it meets two conditions:

•the transferor must have owned the property for at least two years continuously before he transfers it or before he dies
•the property must fall into one of the qualifying classes (see below)

The qualifying classes of business property (relevant business property)

Types of business property that qualify for 100% BPR include: