Commentary

I7.160A BPR and buy and sell agreements

IHT, trusts and estates

I7.160A BPR and buy and sell agreements

I7.160A BPR and buy and sell agreements

Members of partnerships and director shareholders sometimes enter into 'buy and sell' agreements. These provide that in the event of the death before retirement of any partner or director, the deceased's personal representatives are obliged to sell, and the surviving partners or directors are obliged to buy, the deceased's interest in the partnership. The funds for the purchase are often provided for by means of a life assurance policy. See I6.212.

In HMRC's view such an agreement is a binding contract for sale as it imposes a legal obligation and not merely an option

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