Commentary

I5.273A BPR and QIIPs — business or interest in a business

IHT, trusts and estates

I5.273A BPR and QIIPs — business or interest in a business

I5.273A BPR and QIIPs — business or interest in a business

The main category of property which attracts BPR is one of:

  1.  

    •     a business or interest in a business (100% relief)1

  2.  

    •     any land or building, machinery or plant which, immediately before the transfer, was used wholly or mainly for the purpose of a business carried on by the transferor and was settled property in which he was then entitled to a qualifying interest in possession (QIIP) (50% relief)2 Note that before 22 March 2006 there is no requirement that the interest in possession be a qualifying one

Business or interest in a business

An interest in a business here refers to a partnership share, although it might also refer to a case where a sole trader assigned a proportionate share of a business carried on by him as a sole trader. A partnership share is a share of assets less liabilities where the assets and the liabilities in question are defined by the agreement of the partners. There may be dispute in some cases as to whether a particular asset is a partnership asset or the separate property of a partner, but at least there is a clear distinction in law between the two.

In the case of a sole trader the only thing which distinguishes his business assets and liabilities from his other assets and liabilities is the use to which they are put or the purpose for which they are incurred. In Fetherstonaugh v

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