Utilising Business Property Relief

Published: 6th December 2021
Area: Family

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12 Days of Christmas - Day 6: Six geese a laying

What is Business Property Relief?

Business Property Relief (BPR) is a form of tax relief that allows you to claim relief on any business assets owned, which can include shares in a qualifying business.

How does BPR work?

If you are a business owner or have an interest in a business, your estate, upon your death, may be entitled to claim relief from Inheritance Tax (IHT).  This form of tax relief reduces the value of a business or business assets in the calculation of any inheritance liability.

To receive BPR, the business or business assets must have been owned for at least two years prior to death. There is one exception to this rule - if the asset is inherited from a spouse and they too have owned it for less than two years this scenario is added to that of your late spouse. If the combined period of ownership exceeds two years, then BPR relief should be available.

What businesses qualify for Business Property Relief?

Typically, BPR is available for:

  • A qualifying trading business or an interest in one
  • Shares in an unlisted qualifying company, including a minority holding
  • Shares in a qualifying AIM listed company

How much BPR is available?

Depending on the type of business, 50% or 100% relief is available.

Business Property Relief is a powerful form of tax relief and all options should be explored as it can provide relief of up to 100% after you pass away. You should ensure your goose that lays the golden egg can continue to do so for the benefit of your family following your death.

As with all areas of taxation, however, Business Property Relief is a complex area and expert advice should be sought on estate planning.

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