RE: Delays (please)8 May 2020 14:50
Shareseeker10
Inheritance Tax (IHT) Relief:
Business Property Relief (BPR) was originally designed to enable family businesses to be passed on without creating an Inheritance Tax liability, whereby assets have to be sold to pay for the tax.
Notably, its use has since widened to cover unquoted shares – a status AIM-listed companies possess. As such, providing the shares have been held for two years, many AIM investments are able to benefit from BPR, meaning that they are 100% exempt from Inheritance Tax.
It is worth pointing out that the two-year qualifying period does not mean that one has to hold the shares of a specific company for two years, as the shares of one qualifying company can be replaced with the shares of another qualifying company.
But which companies qualify? Unfortunately there is no definitive list of which companies qualify for Business Property Relief, largely due to the qualification status of a company easily changing over time. For instance, non-qualification would apply to a company that is being sold or wound up, as well as a company with dual trading on a recognised overseas exchange. Non-qualification also applies to companies who mainly deal with securities, stocks or shares, land or buildings, or in making or holding investments.
To make matters more complicated, it is the company’s status at the date of death that dictates whether or not relief will be given. As such, it is advised that you contact the company directly for confirmation, and periodically check to ensure your investment remains eligible.
Better yet, there are now a large number of organisations that run AIM Inheritance Tax Portfolio services.
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