I7.111 BPR for sole traders and partnerships generally
The rate of relief in this category is 100% in relation to transfers of value made, and other events occurring, after 9 March 19921.
In HMRC's view2 the 100% rate applies to pre-10 March 1992 lifetime transfers when it comes to determining the IHT or additional IHT (if any) payable in respect of such transfers on the death of the transferor after 9 March 1992. However, it does not apply when determining such a lifetime transfer's contribution to the transferor's cumulation of previous chargeable transfers.
The net value of a business, or the transferor's share of it, qualifying for relief in this category (in the absence of any clawback — see I7.191), is not taxed at all. For the interaction of BPR and partial exemption see I4.240.
'Business' is not defined except that it is stated that it includes 'a business carried on in the exercise of a profession or vocation, but does not include a business carried on otherwise than for gain'3. Subject to the exceptions mentioned below 'business' has a wider meaning than 'trade'4.
So far as professions or vocations are concerned, the IHT definition treats a profession or vocation as a business5.
In order to fall within the IHT definition the business must be carried on for gain6. For an example of consistently loss-making enterprises being held not to qualify for BPR because of (among other reasons) being carried on otherwise than for gain see Grimwood-Taylor v