RE: Business Property relief for IHT ?12 Mar 2025 11:22
Not heard if that before…
AI response below, don’t know if it helps or not:
Business Property Relief (BPR) is a relief from Inheritance Tax (IHT) in the UK, designed to encourage investment in trading businesses. It allows certain business assets to be passed on either during a lifetime or upon death at a reduced or even zero IHT rate.
Key Points About BPR:
1. Relief Rates:
• 100% Relief: Applies to:
• A sole trader business or a partnership interest.
• Shares in an unlisted trading company (including AIM-listed shares).
• 50% Relief: Applies to:
• Controlling shareholdings (over 50%) in a listed trading company.
• Land, buildings, or plant & machinery used in a business not owned by the deceased but used by their partnership or a company they controlled.
2. Ownership Requirement:
• The deceased must have owned the business asset for at least two years before death or transfer.
3. Exclusions from BPR:
• Businesses dealing mainly in:
• Investment activities (e.g., property letting, investment companies).
• Dealing in stocks, securities, or land.
• Excepted Assets: Assets not used for business purposes within the last two years, such as surplus cash not needed for business operations.
4. How It Works:
• If eligible for 100% BPR, the asset is exempt from IHT.
• If eligible for 50% BPR, only the remaining value is subject to IHT at 40% (if above the nil-rate band).
BPR is widely used in estate planning to reduce IHT liabilities, especially through investing in AIM-listed shares or gifting shares in a trading business.
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