What are the benefits and risks of Business Property Relief?

When considering Inheritance Tax (IHT) mitigation and reduction Business Property Relief (BPR) may be useful to some clients. BPR reduces the value of a business or its assets when working out how much IHT has to be paid. It is a valuable relief for business owners whether making a lifetime transfer or on death. Business owners may receive relief at either 100% or 50%, dependent on circumstances, and it is available after an ownership period of two years. Relief is available for business property anywhere in the world.

Property consisting of a business or interest in a business: 100% reliefLand, buildings, machinery or plant used by a company controlled by the transferor or by a partnership of which the transferor was a member: 50% reliefSettled land, buildings, machinery or plant in which the transferor had an interest in possession and used in his business (This applies to lifetime transfers only): 50% relief

BPR is a well-established relief dating back 40 years and  I have only given a couple of examples above of the amount of relief which is available. There are many more possibilities depending on the type of business and the transferor’s circumstances. Tax rules may change in the future, and the value to the individual  will depend on their  own personal circumstances. Also, not every interest in a business will qualify for BPR.  So it’s best if you call me on +44 7831 379562 (UK) or +34  622 374 738 (Spain), or email me at help@sallyherdman.com to arrange a confidential chat, and we can talk about your business circumstances and how to best reduce IHT.