The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Business property relief (BPR) is a relief that reduces the value of property on which IHT is charged. The reduction will generally be available where a transfer of business property is made.
The reduction will be at a rate of 50% or 100%, depending upon the type of business property concerned.
BPR is given automatically and 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 indicated on the inheritance tax account form IHT413.
Property qualifies as business property if it meets three conditions:
the property must have been owned for at least two years continuously before the transfer (which could be on death)
the property must be ‘relevant business property’
the business must be mainly trading (see below)
The types of business property that potentially qualify for 100% BPR include:
property consisting of a business. This is typically a sole proprietorship. The business property includes the value of the assets used in the business (premises, machinery, equipment, intellectual property and working capital) and is reduced by the liabilities of the business
property consisting of an interest in a business. This is typically a partner’s share in a partnership
loan notes in an unquoted company. The notes must give the transferor control of the company immediately before the transfer or before his death. This could be alone or in conjunction with other unquoted loan notes or unquoted shares of the company that the transferor owns
unquoted shares in a company. Unquoted shares are those that are not listed on a recognised stock exchange. Shares listed on the Alternative Investment Market (AIM) are considered unquoted for this purpose
The types of business property that potentially qualify for 50% BPR are:
land or buildings, machinery or plant used by a company. The asset must have been used for business purposes by a
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
Maintenance payments are payments made by a taxpayer to their former or separated spouse for the maintenance of that former spouse or their children. To obtain any tax relief for maintenance payments, one of the couple must have been born before 5 April 1935 and the payments must be made by virtue
Time for paymentTwo statutory rules apply on death:•tax is ‘due’ six months after the end of the month of death and carries interest from the ‘due’ date until paidThere is a possibility of payment by instalments, but this applies to certain types of property only ― see the ‘Availability of
Expenditure of a capital nature is not allowed as a deduction when calculating trading profits. Expenditure of a revenue nature is allowable, provided there is no specific statutory rule prohibiting a deduction and the expenditure also satisfies the wholly and exclusively test. See the Wholly and
Class 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met before Class 1A NIC is
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.