What is Business Property Relief?

 

A tax relief or discount that can be used to reduce how much inheritance tax is due on a deceased person’s estate. You or your executors may be able to claim business property relief on the value of a business or its assets, reducing them by either 100% or 50%, so long as the deceased held the business or asset for more than two years.

Business property relief can be claimed when assets are transferred during your lifetime or under your will. The business must be “wholly or mainly” trading to qualify.

It has been established that at least 50% of the businesses assets must involve trading, in determining this turnover, profits and asset base may be considered individually, but the business will be assessed as a whole.

Business Property Relief can be claimed at 100% on:

– a business or interest in a business
– shares in an unlisted company

Business Property Relief can be claimed at 50% on:

– shares controlling more than 50% of the voting rights in a listed company
– land, buildings or machinery owned by the deceased and used in a business they were a partner in or controlled
– land, buildings or machinery used in the business and held in a trust that it has the right to benefit from

There are some types of business and business circumstances that do not qualify for business property relief.

 

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